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Financial fallout from winter storm blackout unfolding
As the investigation continues into what happened during the winter storm blackout in Texas, we're learning about how bad the financial fallout will be.
HOUSTON - The financial fallout from the Texas Winter blackout continues to unfold in brutal fashion and it appears increasingly likely everyday Texans will be left holding the bag.
Forbes is reporting a state rescue of the troubled power grid is "inevitable" and much of the cost of the multi-billion bailout "will be borne by rate payers; and in particular low and middle-income Texans."
"I am hearing we may see a cascade of bankruptcy filings and company failures as a result of what happened during the week of February 14th," said Chrysta Castaneda, an energy industry attorney and former candidate for Texas Railroad Commission.
"The price of electricity shot through the roof, in part, because the Public Utility Commission allowed the price to float hoping to get more generated capacity on line and now at $9,000 a gigawatt hour there are companies that can't afford to clear their accounts because of that pricing mechanism. It's a debacle," said Castaneda.
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At the peak of the crisis generators who had power to spare, sold their energy at astronomical rates and contend they are entitled to the revenue.
It was an argument that was made today during testimony before state senators.
"There are always winners and losers....Is there more value for what you are getting in a peak an extreme operating event? Yes. Should there be a cost associated with that value? Yes." said Randa Stephenson of the Lower Colorado River Authority.
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The dispute over those huge payments is expected to end up in the courts.
In the meantime, it appears increasingly likely that Texas ratepayers and taxpayers will ultimately fund the financial rehabilitation of an unregulated electric grid that's deep in the red.
"It's the holes in our system that are going to put the pain of not only lost lives and lost property, but lost money in future bills and taxes, on Texans," said Castaneda.
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