Texas-owned Utility Operator sued the state’s grid operator on Friday for levying excessive power prices during the February Deep Freeze. The company sought to bar the grid from issuing any default as it could affect its credit rating. Texas utilities faced about $47 billion in one-time costs due to the high prices of emergency fuel and power during the cold spell.
CPS has more than 820,000 electricity consumers charged an extraordinary $1 billion for natural gas and electricity during the five-day period of last month. The lawsuit alleges that the Electric Reliability Council of Texas (ERCOT) grid operator mismanaged the cold-weather crisis. The case says that this has caused overcharging CPS and other energy providers.
The lawsuit asks the Texas State court to prevent ERCOT from declaring it in default. It also asks that CPS not be overcharged due to other grid users’ defaults. As of Friday, more than $3 billion in charges that ERCOT issued to users were in default, according to a grid official.
Credit rating firms have cut their outlook on the utility’s debt. They have issued warnings as to further downgrades as the size of the costs becomes clearer. Fitch Ratings have lowered the ratings of some and have also placed a negative outlook on CPS Energy’s long-term debt.