Texas’s largest electric-power cooperative filed for bankruptcy, saying it is overwhelmed by the more than $2.1 billion in sudden bills stemming from the extreme winter weather that blanketed the state last month.
Brazos Electric Power Cooperative Inc. on Monday said it had “no choice” but to file for chapter 11 protection after receiving invoices from grid operator Electric Reliability Council of Texas to settle the cost of purchasing energy during the weeklong period when freezing temperatures knocked power plants offline and left millions of customers without electricity for days.
“Simply put, Brazos Electric suddenly finds itself caught in a liquidity trap that it cannot solve with its current balance sheet,” the company’s Executive Vice President and General Manager Clifton Karnei said in a sworn declaration.
The bankruptcy filing suggests that while the blackouts in Texas are over, the process of settling the massive bills stemming from the market failure is just beginning.
Mr. Karnei, who also sat on Ercot’s board of directors until resigning last week, said the notion that a financially stable cooperative like Brazos would face bankruptcy was “unfathomable.” Before the winter weather event and resulting blackouts, the cooperative maintained investment-grade ratings.
