The largest power company in Texas filed for bankruptcy. What caused the bankruptcy?
According to CCTV News, Brazos Electric Power Cooperative Inc., the largest and longest-established electric cooperative company in Texas, on March 1, local time, Filed for bankruptcy protection in Houston, that state. It is reported that the reason is the $1.8 billion debt owed by the state's power grid operator.
Brazos Electric Power Cooperative Inc is one of dozens of electricity providers in Texas and provides electricity to more than 660,000 customers across the state. But last month, it faced a huge shortfall due to severe snowstorms. In mid-February 2021, unusually cold weather destroyed nearly half of the power plants in Texas, leaving 4.3 million people without power and heat for several days. Water pipes burst, causing losses to many homes and businesses. During this period, Brazos Electric Cooperative and other power providers were required to purchase alternative power at high prices and pay other related fees, resulting in high debts.
There are reports that some electricity users in Texas have received shockingly high bills. The phenomenon was caused by winter storms that wreaked havoc on the state's power grid, sending electricity prices soaring. Dallas resident DeAndre Upshaw said in an interview that his current electricity bill has reached nearly $7,000. He said that the high bills have caused many neighbors and friends to lose their savings and make them unable to pay their rent. .
Some experts pointed out that the heavy snowfall caused a surge in electricity load. About 60% of Texas residents used electric heating to keep warm. The extremely cold weather caused a sharp increase in the load on the state power grid. On February 14, 2020, Eastern Time, 8 Hours around 69.22 million kilowatts, a record high winter load. During the same period, the maximum power generation of the Texas power grid was only about 48 million kilowatts, resulting in a power supply gap of 20 million kilowatts.
Secondly, the harsh climate has led to a reduction in power supply capacity. More than 70% of Texas’ power supply comes from wind power and gas turbines. The blizzard caused the natural gas supply for power generation to be blocked, and wind turbines were unable to generate electricity due to ice.
In addition, the Texas power grid equipment has a long operating life and cannot withstand sudden natural disasters.