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UPDATE 1-Texas power retailer Griddy files for Chapter 11 bankruptcy

· 03/15/2021 13:59
UPDATE 1-Texas power retailer Griddy files for Chapter 11 bankruptcy

Adds background on Texas freeze

- Texas power retailer Griddy Energy LLC on Monday filed for Chapter 11 bankruptcy after the state grid operator cut off the company's access to customers for unpaid bills following a rare deep freeze in the state.

Griddy sold power to customers at market rates. When power prices spiked to $9,000 per megawatt hour (MWh) and remained at that lofty level for days during the extreme cold in February, some customers received monthly bills of over $10,000.

That compares with an average price for power of $22 per MWh in 2020 in the Electric Reliability Council of Texas (ERCOT), which operates the state's power grid.

ERCOT last month shut Griddy's access to the state's power network and shifted its 10,000 customers to other utilities, as new signs of a financial crisis rose after a state-wide blackout. nL1N2LA1TA

Griddy said on Monday it is seeking court authority to release its former customers from those outstanding bills.

"Prior to Winter Storm Uri, Griddy was a thriving business... The actions of ERCOT destroyed our business and caused financial harm to our customers," Griddy Chief Executive Officer Michael Fallquist said in a statement. nPn257byja

High gas and power bills from the Texas freeze have already forced two other firms to seek bankruptcy protection - Just Energy Group Inc JE.TO and Brazos Electric Power Cooperative Inc.

Griddy said Baker Botts LLP is representing it as legal counsel in the restructuring.

(Reporting by Shariq Khan and Arundhati Sarkar in Bengaluru; Editing by Shailesh Kuber)

((Shariq.Khan@thomsonreuters.com; Within U.S.+1 646 223 8780, outside U.S. +91 80 6182 2681; Twitter: @shariqrtrs;))