Posted: 3/1/2021 4:39:51 PM EDT
[#15]
Quote History Quoted: ERCOT billed them $9,000/MWh for days, when it was normally around $250, give or take. They didn't have that kind of scratch in reserve, and couldn't pay their bill (I want to say that ERCOT expects payment from an REP in 72 hours).
It should also be noted (it's my understanding, anyway) that the PUC ordered ERCOT to hike the price to the statutory max, regardless of what it was actually trading at. The whole thing is kinda fucked.
It's why Griddy went away. They couldn't pay their ERCOT bill. Griddy only makes $10/mo from each customer, and simply passes what ERCOT charges straight through to the customer, and automatically charges whatever card they have on file. Well...over half their customers flat out called their banks and put stops on the transactions, because they couldn't afford to pay $500+ a day, and they were getting wiped out.
ERCOT is short something like $2B, last I heard. A lot of REPs straight up can't pay it, and (since most of their customers are on flat rate contracts), they can't just immediately pass it through to their customers. Nobody was expecting the price to be that high, for that long. It's never happened before. Not like this. View Quote View All Quotes View All Quotes Quote History Quoted:Quoted:https://www.kbtx.com/2021/03/01/brazos-electric-files-for-bankruptcy-after-winter-storm-cannot-and-will-not-pass-ercot-prices-to-consumers/
WACO, Texas (KBTX) - Brazos Electric Power Cooperative has filed for bankruptcy in a Houston federal court, citing assets and liabilities between $1 billion and $10 billion. Monday's filing begins a financial restructuring process for the co-op.
Brazos Electric is the wholesale power supplier for its 16 member-owner distribution cooperatives and one municipal system, including the Brazos Valley's Mid-South Synergy Navasota and Navasota Valley Electric Franklin. See the full member list here.
Brazos Electric cites the severe winter storms as the impetus for the filing: "Before the severe cold weather Brazos Electric was in all respects a financially robust, stable company As a result of the catastrophic failures due to the storm, Brazos Electric was presented with excessively high invoices by ERCOT for collateral and for purported cost of electric service, payment of which was required within days." The press release goes on to state that it "cannot and will not foist this catastrophic financial event" on power consumers.
I'm of two minds about it. Curious to know what "excessively high invoices" mean. ERCOT billed them $9,000/MWh for days, when it was normally around $250, give or take. They didn't have that kind of scratch in reserve, and couldn't pay their bill (I want to say that ERCOT expects payment from an REP in 72 hours). It should also be noted (it's my understanding, anyway) that the PUC ordered ERCOT to hike the price to the statutory max, regardless of what it was actually trading at. The whole thing is kinda fucked. It's why Griddy went away. They couldn't pay their ERCOT bill. Griddy only makes $10/mo from each customer, and simply passes what ERCOT charges straight through to the customer, and automatically charges whatever card they have on file. Well...over half their customers flat out called their banks and put stops on the transactions, because they couldn't afford to pay $500+ a day, and they were getting wiped out. ERCOT is short something like $2B, last I heard. A lot of REPs straight up can't pay it, and (since most of their customers are on flat rate contracts), they can't just immediately pass it through to their customers. Nobody was expecting the price to be that high, for that long. It's never happened before. Not like this. Yep some reps will go bankrupt, I had it happen to me a few years ago. The REPS are supposed to be using futures contracts to hedge their exposure..... I understand the market thinking behind hiking the rate but practically speaking that was stupid. Very few people had the ability to curtail their usage regardless of the rate hikes and with so many on fixed rate plans there was no incentive to do so. In short it was an effort in futility. The only way that rate hike makes sense is if the REPS who were exposed could have disconnected customers to reduce usage. Technically speaking it possible with a smart meter, but logistically it would be difficult and the legalities would be highly suspect.
|
|