Texas energy crisis deepens as more businesses skip payments due to grid operator


HOUSTON – Texas power companies failed to pay another $ 345 million for electricity and other services incurred during last month’s cold snap, the state’s grid operator said Monday.

The state’s deregulated electricity market was shaken last month when 48% of its generating plants went offline, leading to spot rates of up to $ 9,000 per megawatt hour (mwh) and service fees of $ 25,000 per mwh. Those charges bankrupted a provider on Monday.

In total, electricity prices in the state’s wholesale market soared by $ 47 billion during the roughly five-day period when cold weather increased demand and generating plants failed, estimated Carrie Bivens, vice president of Potomac Economics, that monitors the Texas electricity market.ARCHIVES OF TEXAS ELECTRIC POWER COOPERATIVE INC ARMS BY BANKRUPTCY: REPORT

His figure does not include additional fees or payment defaults, which are significant and extend to all companies that use network services under ERCOT rules, he said.

“It’s a lot of zeros,” Bivens said of the additional fees.

HOUSTON, TEXAS – FEBRUARY 21: The United States and Texas flags fly in front of high voltage transmission towers on February 21, 2021 in Houston, Texas. Millions of Texans were without power when winter storm Uri hit the state, knocking out coal, natural gas and nuclear power.

In total, electricity providers skipped $ 2.46 billion in energy and service charges, said grid operator Electric Reliability Council of Texas (ERCOT). It applied $ 800 million of guarantees and other accounts to reduce the accumulated deficit to $ 1.66 billion.

ERCOT did not disclose which companies did not pay the bills, but said it will begin naming companies and the amounts they have not paid in the future.

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The state-supervised operator acts as a clearinghouse, collecting cash from traders who buy power and sending it to companies that supply electrons to its grid.

Texas could reduce about $ 2 billion of the burden faced by municipal utilities, traders and generators by cutting some rates, Bivens said. The governor could also apply a portion of the state emergency fund to cover some charges. On Monday, electricity supplier Brazos Electric Power Cooperative Inc., the state’s oldest and largest energy wholesale company, filed for bankruptcy citing $ 1.8 billion in debt owed to ERCOT. The presentation underscored the financial stress on energy traders and utilities due to price turmoil.

A spokeswoman for Gov. Greg Abbott declined to comment on Monday’s bankruptcy filing or on proposals that the state’s Public Utilities Commission lower rates that soared during the blackout.

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Abbott is monitoring the situation “as ERCOT and its financial advisers work to ensure that the ability to provide electricity is not disrupted,” said spokeswoman Renae Eze.

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