Texas has thawed out after an Arctic freeze last month threw the state into a power crisis. But the financial turmoil from power grid shock is just starting to take shape.
Why it matters: In total, electricity companies are billions of dollars short on the post-storm payments they now owe to the state's grid operator. There's no clear path for how they will pay — something being watched closely across the country as extreme weather events become more common.
Catch up quick: There was a "cascading failure of infrastructures" in the wake of the statewide cold front, says Josh Rhodes, a research fellow at the University of Texas at Austin's Webber Energy Group.
- "Our gas, electricity and water grids failed," while millions went without power and water. Officials are still tallying how many died.
- One example of the massive money effect: Wholesale power prices rose from roughly $50 per megawatt hour to $9,000. As the costs for electric companies rose, resident bills also soared.
What's happening: Electricity providers can't pay the Electric Reliability Council of Texas (ERCOT), which operates the state's power grid, for the power they used.
- So ERCOT is now short on what it has to pay power generators.
- Think of the ERCOT like a clearinghouse. It collects money from electricity providers. It then pays the companies that produce power.
The domino-effect fallout from the massive price spike is still taking shape. Just this week ... ...
- Brazos Electric Power — the state's oldest and largest power company — couldn't pay $1.8 billion of its ERCOT bill and filed