WACO, Texas — The largest electrical co-op in Texas is set to open its bankruptcy case Tuesday, stating it was overcharged hundreds of millions by the state's grid operator.
As reported by the Houston Chronicle, Brazos Electric is arguing that the Electric Reliability Council of Texas (ERCOT) violated market rules when it set power prices at $9,000 per megawatt-hour during last year's winter storm — over 300 times the normal market price.
By allowing these rates to last for over 30 hours, the Waco-based co-op says their power bills were increased by $1.6 billion.
U.S. Bankruptcy Judge David Jones will decide how much of their $1.9 billion debt from ERCOT bills will need to be paid back.
In a statement released last year, Clifton Karnei, executive vice president of Brazos Electric, said the bankruptcy case was needed to "protect its member cooperatives and their more than 1.5 million retail members from unaffordable electric bills.”
The co-op is also arguing that the rolling blackouts issued by ERCOT were not justifiable market interventions under rules regarding state power.
Fired ERCOT President Bill Magness, who managed the grid during the storm, is set to testify in the trial.
Also testifying will be DeAnn Walker and Arthur D’Andrea, both former commissioners of the Texas Public Utility Commission, which directed ERCOT to override the power market.
Legislation has since failed in the House to withdraw $4.2 billion in similar bills from ERCOT.
State House Speaker Dade Phelan, R-Beaumont, has stated these bills would have been an "extraordinary government intervention into the free market.”