Texas’ Griddy Energy Files For Bankruptcy
Griddy Energy, the Texas energy company which was criticized for sending huge bills to customers during last month’s severe winter storm, has filed for Chapter 11 bankruptcy protection.
In its website, the troubled company cited the actions taken by the state’s electricity grid operator Electric Reliability Council of Texas or ERCOT during and after Winter Storm Uri for its financial challenges related to the electricity delivered to its customers.
In mid-February, majority of the state’s power plants were shut down following unusually frigid temperatures that affected around 4.3 million people without heat or light for days, and caused severe damages to houses and businesses.
In a filing with the United States Bankruptcy Court for the Southern District of Texas, Griddy said it has $1 million to $10 million in estimated assets and $10 million to $50 million in estimated liabilities. The company owes over $29 million to ERCOT.
On February 26, ERCOT commenced transitioning Griddy’s customers to the Provider of Last Resort or POLR.
Griddy said it is seeking bankruptcy protection, subject to Bankruptcy Court approval, to efficiently wind down for the benefit of its creditors. The company added that it hopes to give its former customers relief from the uncertainty of being subject to collection actions following the extreme wholesale electricity prices from the winter storm event.
A major feature in Griddy’s bankruptcy proposed plan is to exchange releases with former customers, including those with unpaid electricity bills. According to the company, the proposed chapter 11 plan provides customers the option to get releases from their unpaid electricity bills in exchange for releases of the company and certain other parties.
Griddy noted that many companies in the state have already reported or will report massive losses due to these extreme circumstances. In early March, Brazos Electric Power Cooperative Inc., the largest power generation and transmission cooperative in Texas, filed for Chapter 11 bankruptcy protection citing a huge bill from the state’s grid operator ERCOT following major outages amid the winter storm.
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