Electric firm Griddy loses access to Texas grid, customers shifted to
rivals
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[February 27, 2021]
By Gary McWilliams
HOUSTON (Reuters) - Texas's grid operator
on Friday shut Griddy Energy LLC's access to the state's power network
for unpaid bills and shifted its 10,000 customers to other utilities, as
new signs of a financial crisis rose after a state-wide blackout.
Griddy was the power marketer that sold consumers electricity at
wholesale rates, which rose to $9,000 per megawatt hour as cold weather
struck the state last week. Unable to cope with demand, utilities cut
power to 4.3 million residents as temperatures fell below freezing.
Grid operator Electric Reliability Council of Texas (ERCOT) "effectively
shut down Griddy," the electricity marketer said in a statement on its
website. Requests for further comment were not returned.
ERCOT separately said $2.1 billion of its service bills went unpaid from
utility and other grid users on Friday, another sign of the devastation
from high electricity rates during the cold snap.
Griddy's statement said it accounted for "a tiny fraction" of ERCOT's
unpaid bills.
ERCOT was transferring about 10,100 Griddy customers to others on
Friday. Retail power providers that do not pay invoices within 72 hours
can have all their customers reassigned.
The grid operator's handling of the severe weather fueled a firestorm of
criticism from residents and state officials who blamed ERCOT for lack
of preparation for the severe cold. ERCOT called on utilities to cut
power to protect the grid, which left 4.3 million people without heat or
light and led to billions of dollars in damages.
ERCOT will likely face more shortfalls in coming days, said Patrick
Woodson, chief executive of power marketer Green Energy Exchange. His
firm is among nine companies protesting multimillion dollar blackout
fees levied by ERCOT.
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An electrical substation is seen after winter weather caused
electricity blackouts in Houston, Texas, U.S. February 20, 2021.
REUTERS/Go Nakamura
“The price of surviving the first wave of these high bills is you
get hit with additional costs in the second wave," said Woodson.
ERCOT spreads unpaid fees among remaining grid users.
The grid operator said it will cover $800 million of the shortfall
by borrowing from internal accounts, and will draw an undisclosed
amount from grid users with credit balances. An ERCOT spokeswoman
did not reply to requests for comment.
Vistra Corp., the largest retail electric provider in the United
States, said its TXU unit in Texas "volunteered to take on
significantly more customers" expecting a wave of transfers after
the outages.
"There often are opportunities to acquire retailers after events of
volatility. As always, we will continue to be opportunistic when
looking to purchase smaller customer books," spokeswoman Meranda
Cohn said in an email.
Seven of ERCOT's 15 directors resigned this week and a nominee
withdrew. Texas Governor Greg Abbott has said public anger was
justified and blamed ERCOT for not acting faster to keep generators
from going offline.
(Reporting by Gary McWilliams; Editing by Rosalba O'Brien, Grant
McCool, Daniel Wallis and William Mallard)
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