|
Brazos Electric Power Cooperative Inc is one of dozens of
electricity providers facing enormous charges stemming from a
severe cold snap last month. The fallout threatens utilities and
power marketers who collectively face billions of dollars in
blackout-related charges, executives said.
Unusually frigid temperatures knocked out nearly half of the
state's power plants in mid-February, leaving 4.3 million people
without heat or light for days and bursting water pipes that
damaged homes and businesses. Brazos and others that committed
to provide power to the grid and could not, were required to buy
replacement power at high rates and cover other firms' unpaid
fees.
The state's grid operator, Electric Reliability Council of Texas
(ERCOT), on Friday said $2.1 billion in initial bills went
unpaid, underscoring the financial stress on utilities and power
marketers. More providers likely will reject the bills in coming
days, executives said.
"The municipal power sector is in a real crisis," said Maulin
Patani, a founder of Volt Electricity Provider LP, an
independent power marketer that is not a member of the Brazos
coop. ERCOT should suspend the service charges to halt further
defaults, he said in an interview on Sunday.
The city of Denton, in north Texas, last week sued ERCOT in a
state court to prevent it from charging it for fees unpaid by
other users of the grid. Denton Electric could face tens of
millions of dollars for fees that were not collected from
others, the suit claimed.
Debt analyst Fitch Ratings last week also warned of potential
downgrades to all Texas municipal power firms that use the
state's grid. Costs from the storm "could exceed the liquidity
immediately available to these issuers," Fitch said.
ERCOT triggered the squeeze when it pushed up spot-market rates
to $9,000 per megawatt hour (mwh) over more than four days and
levied huge fees for services. The service fees were 500 times
the usual rate, according to industry executives.
Brazos Electric coop executive Clifton Karnei, who sat on
ERCOT's board of directors until last week, signed the Brazos
coop's bankruptcy submissions. Through its 16 utility company
members, Brazos provides electricity to more than 660,000
customers across the state of Texas.
(Reporting by Gary McWilliams; Editing by Christopher Cushing,
Stephen Coates and Louise Heavens)
[© 2021 Thomson Reuters. All rights
reserved.] Copyright 2021 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content.
|
|
