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UPDATE 3-Texas power retailer Griddy files for Chapter 11 bankruptcy protection

UPDATE 3-Texas power retailer Griddy files for Chapter 11 bankruptcy protection

· 03/15/2021 13:59
UPDATE 3-Texas power retailer Griddy files for Chapter 11 bankruptcy protection

Adds details from court filing, largest creditors

- 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 grid for 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. nPn257byja

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. nnL1N2LD1VA


(Reporting by Shariq Khan and Arundhati Sarkar in Bengaluru; additional reporting by Gary McWilliams; Editing by Marguerita Choy and Shinjini Ganguli)

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