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.
These high costs have led to two companies becoming bankrupt. Two other electric providers have been knocked off the power grid due to default payments. Paula Gold-Williams, Chief Executive of San Antonio’s municipal utility, CPS Energy, said, “We are fighting to protect our customers from the financial impacts of the systemic failure” of the state’s grid Operator.”
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.