Brazos Electric Power Cooperative Inc., the biggest electricity co-op in Texas, won bankruptcy-court approval to poll its creditors on a $1.4 billion compromise over allegedly exorbitant power purchases during the extreme winter storm that hit the state last year, WSJ Pro Bankruptcy reported. The proposed settlement would ease the burden on Brazos and its member cooperatives from the storm-related bills that drove it into chapter 11. Brazos has been fighting the nearly $1.9 billion invoice it received from the Electric Reliability Council of Texas, or Ercot, saying the Texas grid operator overcharged for electricity after winter storm Uri, which knocked out power to millions for days and spiked electricity prices. Power generators including Calpine Corp. and NRG Energy Inc. that sold electricity to Brazos would have two choices under the settlement plan. They could collect from Brazos in full over 30 years or opt for quicker payments by taking on average a discount of nearly 24 cents on the dollar on their invoices. Brazos would make up front payments totaling over $1.15 billion to Ercot, the state’s clearinghouse for buying and selling electricity, to distribute to generators still owed money from bills the co-op incurred during the winter storm. In addition Brazos would make 12 payments annually of up to $13.8 million each and hand over a portion of the $116 million in proceeds from the sale of its generation assets, according to court documents filed on Tuesday. Judge David Jones of the U.S. Bankruptcy Court in Houston will take up approval of the chapter 11 plan in November, he said at a court hearing. The judge on Tuesday authorized Brazos to solicit votes from creditors on the restructuring plan, and the plan is expected to become effective by Dec. 30 if approved.
