Texas power providers, regulators face legal fallout from freeze and blackouts
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Texas power providers, regulators face legal fallout from freeze and blackouts

The largest power company in Texas filed for bankruptcy Monday following a historic cold snap that caused week-long blackouts and left at least 4.3 million people without power across the state.

When temperatures in Texas dropped below freezing and caused power grids to fail, energy providers like Brazos Electric Power Cooperative had to purchase replacement power from the state grid operator. The Electric Reliability Council of Texas (ERCOT) imposed high prices on power purchasers in order to cover the cost of other power companies’ electricity use.

Brazos is now facing a $1.8 billion bill. The company claims to have filed for bankruptcy in order to liquidate some assets so they can cover the charges without shifting the costs to consumers. In a press release, Brazos vice president and general manager Clifton Karnei said that the move was necessary “to protect its Member cooperatives and their more than 1.5 million retail members from unaffordable electric bills” while allowing them to continue providing service to customers.

Other power providers and regulators in Texas are also facing legal fallout from the freeze. Houston-based power company Griddy, which provides energy to consumers at wholesale prices, is facing a class-action suit over accusations of price gouging after customers received bills upwards of $17,000. Texas Attorney General Ken Paxton filed another lawsuit against Griddy on Monday for misleading and deceptive marketing practices.

Florida-based law firm Morgan & Morgan sued ERCOT for failing to prepare providers for freezing temperatures despite warning and knowledge of the potential damage at risk. ERCOT is also under investigation by the Federal Energy Regulatory Commission. They are also facing a lawsuit from the city of Denton to prevent ERCOT from shifting the cost of unpaid bills to other providers including cities that maintain their own grids.