Texas Power Market Shortfall Jumps to $2.5 Billion After Crisis

(Bloomberg) -- Texas's grid operator said it's short nearly $345 million in payments from retail power providers and others after electricity prices skyrocketed during last month's energy crisis.

That brings the total shortfall to nearly $2.5 billion, according to a market notice.

The Electric Reliability Council of Texas, known as Ercot, said it covered some of that debt by using $800 million in revenues from another market, but remains nearly $1.7 billion short.

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The shortfall comes after last month's Arctic blast knocked nearly half of the state's power generating capacity offline and left more than 4 million homes and businesses in the dark for days. Amid the crisis, Ercot set power prices at $9,000 a megawatt-hour in a failed bid to incentivize power producers to feed more electricity into the system.

Instead, the high prices put a financial strain on some utilities, power retailers and generators. On Sunday, Brazos Electric Power Cooperative, the largest power generation and transmission cooperative in Texas, filed for bankruptcy after racking up an estimated $2.1 billion in charges over seven days of the winter storm. The company owes Ercot a disputed $1.8 billion in collateral.

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If Ercot cannot come up with financing to cover the underpayments, the debt could end up being shared by everyone in the Texas market, including consumers. Amid the fallout, seven of Ercot's board members have resigned. The head of the Public Utility Commission of Texas resigned Monday.

The grid operator said in the notice Monday that, going forward, it would identify the identities of the companies that hadn't paid.

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