AP – The largest and oldest power cooperative in Texas is filing for bankruptcy protection, citing last month’s winter storm that left millions without power, and it is unlikely to be the last utility to seek shelter in the courts.
Brazos Electric Power Cooperative serves distributors that supply electricity to more than 1.5 million Texans in 68 counties from the Panhandle to Houston. Brazos said on Monday that it was a “financially robust, stable company” before the Arctic freeze that hit Texas between February 13 and 19. It said it received excessively high invoices from the Electric Reliability Council of Texas (ERCOT), which operates the state power grid, for collateral and the cost of electric service. The invoices were required to be paid within days.
As a cooperative, Brazos’ costs are passed through to its members and retail consumers served by its members. Brazos decided that it won’t pass on the ERCOT costs to its members or the consumers, so it filed for Chapter 11 protection, which indicates that the company plans to reorganise its debts rather than liquidate.
“Let me emphasise that this action by Brazos Electric was necessary to protect its member cooperatives and their more than 1.5 million retail members from unaffordable electric bills as we continue to provide electric service throughout the court-supervised process,” Executive Vice President and General Manager of Brazos Clifton Karnei said in a statement.