After the storm: Texas electricity co-op declares bankruptcy | Business and economic news
Brazos said the Chapter 11 filing would protect the Texans he serves from the massive electricity bills racked up during the February freeze.
Texas’ largest and oldest electricity co-op is seeking Chapter 11 bankruptcy protection, citing last month’s winter storm that left millions of people without power.
Brazos Electric Power Cooperative, which serves 16 member distribution co-ops that serve more than 1.5 million Texans in 68 counties, from the Texas Panhandle to Houston, said Monday it was a “financially strong and stable business. Before the severe cold that hit Texas – the second largest state in the United States – between February 13 and February 19.
Much of Texas’ power grid collapsed, followed by its water systems. Tens of millions of people huddled in icy homes. Others fled for safety. The state, long suspicious of regulation and outside aid, had to seek help from other states and humanitarian groups when many of its 29 million people were prepared to survive.
Brazos said it received disproportionately high bills from the Electric Reliability Council of Texas (ERCOT) for warranties and for the supposed cost of electrical service. Bills had to be paid within days. As a cooperative, Brazos’ costs are passed on to its members and the retail consumers served by its members. Brazos has decided not to pass on the costs of ERCOT to its members or consumers.
“Let me stress that this action by Brazos Electric was necessary to protect its member co-ops and their more than 1.5 million retailers from unaffordable electricity bills as we continue to provide electrical service throughout the supervised process. by court, ”Clifton Karnei, executive vice president and general manager of Brazos, said in a prepared statement.
Brazos said he would continue to provide electricity to members while restructuring the cooperative under bankruptcy protection.
The bankruptcy filing comes on the same day that Texas Attorney General Ken Paxton said he was suing electricity supplier Griddy for sending massive bills to his customers during the winter storm in February. The lawsuit accuses Griddy of violating the Texas Deceptive Trade Practices Act and demands reimbursement from customers.
On Friday, ERCOT transferred around 10,000 Griddy customers to other utilities. Griddy stated that ERCOT “took our members and effectively shut down Griddy”.
“We have always been transparent and customer-centric at every step. We wanted to keep fighting to keep our members relieved and that hasn’t changed, ”said Griddy.