Brazos Electric Power Coopeative, the Texas electric co-op forced into bankruptcy after last year’s storms left it with a US$2bn wholesale power bill, has agreed to go to mediation in its legal dispute with the state grid operator.
The ice storm of February 2021 knocked out half of Texas’ power supply and sent wholesale electricity prices soaring to $9,000 per megawatt-hour – compared with pre-storm prices of less than $50 per megawatt hour.
Brazos, the state’s oldest and largest electric co-op, filed for chapter 11 bankruptcy in March 2021 to protect its members from the $2bn bill and has taken state grid operator ERCOT (Electric Reliability Council of Texas) to court, contesting the sum.
It accused ERCOT of violating the terms of their contract when it levied the peak $9,000 charge for much of the storm, which lasted for a week. The co-op has asked US bankruptcy judge David Jones, in Houston, to drastically reduce ERCOT’s claim.
Brazos, which had another $2bn in funded debt at the time it filed for bankruptcy, says the amount it owes ERCOT is closer to $770m. It adds that it cannot draw up a reorganisation plan until a final settlement amount is decided.
The case has gone to mediation after judge Jones said both parties should “sit in a room and understand what the options are”.
Related: Testing times for Texas electric co-ops a year on from knockout storm
