By Tyler Durden
We’re starting to get a better understanding of the Texas credit crisis involving power companies operating on the state’s power grid following the Arctic blast and severe winter storms that pounded the area last month, resulting in wholesale electricity prices soaring to more than 9,000 a megawatt-hour.
Earlier this week, court documents showed Brazos Electric Power Cooperative, the largest generation and transmission co-op in the Lone Star State, filed for Chapter 11 in the U.S. Bankruptcy Court for the Southern District of Texas. The company said it could not pay a $1.8 billion bill to the state’s grid operator, ERCOT.
Now, power retailer, Entrust Energy Inc. is the second electricity seller “barred from Texas’s power market for failing to make payments,” said Bloomberg. Entrust is short $234 million in payments to generators and others.
ERCOT on Wednesday outlined electricity providers who are short $2.217 billion in payments.
Brazos, who tops the list, said in the filing that the magnitude of the charges “could not have been reasonably anticipated or modeled” and surpassed its highest liquidity levels in years. The company “finds itself caught in a liquidity trap that it cannot solve with its current balance sheet.”
It wasn’t just power companies slapped with massive power bills – customers also had bills that were considerably high:
Readers may recall, we were one of the first to uncover the “mind-blowing” power bills some Texans were slapped with. Some people, who opted into variable power bills, were charged as much as $17k for power. We even did that math and said it would cost $900 to charge a Tesla in Texas during the energy crisis.
Kenan Ogelman, ERCOT’s vice-president of commercial operations, was right days ago when he warned about “defaults are possible.”
Yes, Ogelman, defaults are possible, and that’s what we’re seeing today… The Texas credit crisis is not over.
Source: Zero Hedge
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