Electricity retailer Griddy Energy LLC on Monday became the third Texas power company to file for Chapter 11 bankruptcy over enormous bills for electricity during last month's deep freeze.
Frigid temperatures knocked out nearly half of the state's power plants during a cold snap that killed at least 56 and upended its power market. Power prices soared by about 400 times as demand skyrocketed and generators fell offline.
Griddy owes Texas grid operator, Electric Reliability Council of Texas (ERCOT), $29 million for power, according to its filing in U.S. Bankruptcy Court in Houston. The filing lists debts of up to $50 million and assets of less than $10 million.
Among its top creditors, Griddy owes transmission line operators CenterPoint Energy (CNP.N)and Oncor Electric Delivery Co about $1.2 million apiece, and electronic payments company Stripe Inc more than $1 million.
Last month, ERCOT revoked Griddy's access to the state's gridfor overdue bills and shifted its customers to other utilities. Two other power marketers, Entrust Energy Inc and Power of Texas Holdings, also had their access revoked and customers transferred by ERCOT for nonpayment.
On Friday, ERCOT said it is owed more than $3 billion by grid users that missed payment deadlines. Unpaid bills are reallocated to remaining grid users, threatening a cascade of bankruptcy, officials have said.
ERCOT bills earlier drove Just Energy Group Inc (JE.TO) and Brazos Electric Power Cooperative Inc to seek bankruptcy protection. Brazos owned ERCOT $1.8 billion.
Griddy said it was seeking court authority to release its former customers from their outstanding bills, blaming ERCOT for its financial woes.
"The actions of ERCOT destroyed our business and caused financial harm to our customers," Griddy Chief Executive Officer Michael Fallquist said in a statement.
ERCOT raised power prices to $9,000 per megawatt hour (MWh) and kept it at that level for five days hoping to induce more generation and battle widespread blackouts. The $9,000 per MWh compares with an average price of $22 per MWh in 2020.
Texas lawmakers and the state's market adviser have said the final 32 hours of that pricing and some fees were errors that should be corrected. On Monday, state senators passed a bill directing ERCOT and the Public Utility Commission to reduce some $5.1 billion in charges. read more
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