Brazos Electric Power Cooperative Inc. yesterday largely defeated an effort by the Texas electric operator to dodge a lawsuit over a $2 billion energy bill stemming from the state's historic February storm that knocked out power for millions, Reuters reported. Bankruptcy Judge David Jones in Houston rejected arguments from the Electric Reliability Council of Texas (ERCOT) and Public Utilities Commission of Texas (PUCT) that the dispute should not be handled in bankruptcy court and that allowing it to continue would infringe upon the state’s sovereignty. ERCOT said in a response to a request for comment that it does not comment on pending litigation. Brazos, the largest and oldest electric co-op in Texas, filed for chapter 11 protection in March after it was hit with the massive bill. The bill for the seven days the storm lasted is nearly three times the co-op’s total power cost from 2020, which was $774 million, according to court papers. For several days during the storm, ERCOT set electricity prices at $9,000 per megawatt hour. In August, the co-op filed a complaint within its bankruptcy aiming to reject ERCOT's claim for the payment of the bill and substantially reduce the amount. It argues that the charges are constructively fraudulent and excessive. The Public Utilities Commission of Texas says Brazos is trying to re-price the market. Ruling in favor of the coop, Texas Assistant Attorney General Jason Binford argued at yesterday's hearing, could create a precedent that would lead to other electric providers seeking bankruptcy to offload their energy bills as well. Additionally, Binford said, Texas has a specific procedure for resolving this type of dispute. Handling the bill in bankruptcy court infringes upon the state’s sovereign immunity, he argued.
