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Electric firm Griddy loses access to Texas grid, customers shifted to rivals

Stock MarketsFeb 27, 2021 12:20AM ET
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© Reuters. FILE PHOTO: Winter weather caused electricity blackouts in Houston

By Gary McWilliams

HOUSTON (Reuters) - Texas's grid operator on Friday shut Griddy Energy LLC's access to the state's power network for unpaid bills and shifted its 10,000 customers to other utilities, as new signs of a financial crisis rose after a state-wide blackout.

Griddy was the power marketer that sold consumers electricity at wholesale rates, which rose to $9,000 per megawatt hour as cold weather struck the state last week. Unable to cope with demand, utilities cut power to 4.3 million residents as temperatures fell below freezing.

Grid operator Electric Reliability Council of Texas (ERCOT) "effectively shut down Griddy," the electricity marketer said in a statement on its website. Requests for further comment were not returned.

ERCOT separately said $2.1 billion of its service bills went unpaid from utility and other grid users on Friday, another sign of the devastation from high electricity rates during the cold snap.

Griddy's statement said it accounted for "a tiny fraction" of ERCOT's unpaid bills.

ERCOT was transferring about 10,100 Griddy customers to others on Friday. Retail power providers that do not pay invoices within 72 hours can have all their customers reassigned.

The grid operator's handling of the severe weather fueled a firestorm of criticism from residents and state officials who blamed ERCOT for lack of preparation for the severe cold. ERCOT called on utilities to cut power to protect the grid, which left 4.3 million people without heat or light and led to billions of dollars in damages.

ERCOT will likely face more shortfalls in coming days, said Patrick Woodson, chief executive of power marketer Green Energy Exchange. His firm is among nine companies protesting multimillion dollar blackout fees levied by ERCOT.

“The price of surviving the first wave of these high bills is you get hit with additional costs in the second wave," said Woodson. ERCOT spreads unpaid fees among remaining grid users.

The grid operator said it will cover $800 million of the shortfall by borrowing from internal accounts, and will draw an undisclosed amount from grid users with credit balances. An ERCOT spokeswoman did not reply to requests for comment.

Vistra Corp., the largest retail electric provider in the United States, said its TXU unit in Texas "volunteered to take on significantly more customers" expecting a wave of transfers after the outages.

"There often are opportunities to acquire retailers after events of volatility. As always, we will continue to be opportunistic when looking to purchase smaller customer books," spokeswoman Meranda Cohn said in an email.

Seven of ERCOT's 15 directors resigned this week and a nominee withdrew. Texas Governor Greg Abbott has said public anger was justified and blamed ERCOT for not acting faster to keep generators from going offline.

Electric firm Griddy loses access to Texas grid, customers shifted to rivals
 

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Comments (4)
JOSE ONTIVEROS
JOSE ONTIVEROS Feb 27, 2021 2:55AM ET
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Why did these people resign. They need to give more details. They just anounce these news like its gonna solve something or should give people peice of mind there not there anymore. Nobody just resigns, if these people did something unlawful they need to be acounted for it. These people resigning makes me uncomfortable. What are they hiding???
Mark Henline
Mark Henline Feb 27, 2021 2:55AM ET
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people resigned because they dont like the way the companies run...now 15 at same time is pretty extreme...so I'm sure their was some Enron type stuff going on....truth be told prob 75 to 120 elected congressmen should resign.
Shane Gg
Shane Gg Feb 27, 2021 12:51AM ET
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The Texas storm cost me money but that's nothing compared to what the people of Texas experienced. I hope they better prepare for this before next winter and beyond. I heard thee were about a dozen deaths... I'd gladly lose all my money to keep things like that from happening.
Mairaj Haider
Mairaj Haider Feb 27, 2021 12:39AM ET
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Im in sugarland, texas right now. I see this *****and realize how backward texas can be in certain things. Ercot, why do you exist?!
David Bowie
Defcon2 Feb 27, 2021 12:39AM ET
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The existence of green energy, which isn't reliable, is what's backwards.
Mark Henline
Mark Henline Feb 27, 2021 12:39AM ET
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David Bowie someone suffers and someone wins
Mark Henline
Mark Henline Feb 27, 2021 12:39AM ET
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David Bowie world of supply and demand..apple cart tips
Mark Henline
Mark Henline Feb 27, 2021 12:39AM ET
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David Bowie we are all on the edge
Bill Melton
Bill Melton Feb 27, 2021 12:39AM ET
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You are right. For starters Rooter/Pravda conveniently doesn't report what has happened in California. California removed fossil fuels from their grid. Ask California how that is working. Now they have people calling customers to see if they are using high amperage items during peak times. In addition, they have rolling blackouts. Guess what wind turbines need to operate? Lubricants from fossel fuel. How do they get turbines into location? Trains, which use diesel. Large trucks and cranes that use diesel. The dirty secret on wind turbines is that they are made of steel. Most steel in the world is made in basic oxygen furnaces, & most of those furnaces use coal as their heat source. Most wind turbines are made in Germany & China. Don't forget tne ******of migratory birds. Interesting you don't hear dems and environmentalists mentioning that. There is a reason: they don't follow the science; they follow ideology.
Benjamin McIntire
Benjamin McIntire Feb 27, 2021 12:30AM ET
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What a mess
 
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