Texas Regulator Resigns as Financial Fallout Continues

March 17, 2021

Texas Monthly:

While many Texans last week were worried about sky-high electric bills from February’s winter storms, the state’s sole utility commissioner was privately reassuring out-of-state investors who profited from the crisis that he was working to keep their windfall safe.

Texas Monthly has obtained a recording of a 48-minute call on March 9 in which Texas Public Utility Commission chairman Arthur D’Andrea discussed the fallout from the February power crisis with investors. During that call, which was hosted by Bank of America Securities and closed to the public and news media, D’Andrea took pains to ease investors’ concerns that electricity trades, transacted at the highest prices the market allows, might be reversed, potentially costing trading firms and publicly traded generating companies millions of dollars.

“I apologize for the uncertainty,” D’Andrea said, promising to put “the weight of the commission” behind efforts to keep billions of dollars from being returned to utilities that were forced—thanks to decisions by the PUC—to buy power at sky-high prices, even after the worst of the blackout had passed.

Billed as “Learning the Texas Two Step: A Chat with the PUCT,” the call originally was scheduled for early February but was postponed until after the winter storm. The conversation shows a coziness between a top Texas regulator and some of the biggest players in the electricity market at a time when the PUC’s oversight is under fire from lawmakers. At one point, during a discussion about whether natural gas, which also saw huge price spikes during the crisis, would be “repriced,” D’Andrea said no, adding that most legislators understand that gas is priced by global markets and is out of their purview. “But I’ll let you know if I hear anything crazy on it,” D’Andrea said.

Update: On Tuesday night, PUC chairman Arthur D’Andrea, who was appointed chairman by Governor Greg Abbott less than two weeks ago, has resigned. In a statement, Abbott said, “Tonight, I asked for and accepted the resignation of PUC Commissioner Arthur D’Andrea. I will be naming a replacement in the coming days who will have the responsibility of charting a new and fresh course for the agency. Texans deserve to have trust and confidence in the Public Utility Commission, and this action is one of many steps that will be taken to achieve that goal.”

ABC News:

Griddy Energy has filed for Chapter 11 bankruptcy protection in the aftermath of the severe winter weather that hit Texas last month and triggered an energy crisis.

The wholesale electricity provider came under fire after many of its customers reported being hit with exorbitant bills during what is now dubbed Winter Storm Uri. The storm temporarily knocked out power for millions of Texans.

“Our bankruptcy plan, if confirmed, provides relief for our former customers who were unable to pay their electricity bills resulting from the unprecedented prices,” Griddy Chief Executive Officer Michael Fallquist said in a statement announcing the bankruptcy proceedings.

Fallquist said that prior to Uri, Griddy was a “thriving business” and blamed the operators of the state’s power grid, the Electric Reliability Council of Texas, for hurting its business and causing financial harm to customers.

Griddy said that it did not profit from the winter storm crisis and provided access to customers of real-time wholesale electricity prices. Griddy added that it neither influences nor controls the price of electricity and the prices are passed directly to customers without markup.

Finally, the company said that it earns the same $9.99 monthly fee regardless of the fluctuations in the price of electricity.

Griddy’s co-founder Gregory Craig added that “no retail energy provider or consumer should have to forecast and protect against such extreme and unforeseeable circumstances.”

The company disclosed that it had estimated assets of between $1 million and $10 million and estimated liabilities of between $10 million and $50 million, according to a bankruptcy petition filed Monday in the Southern District of Texas.

Earlier this month, Texas Attorney General Ken Paxton filed a lawsuit against Griddy, accusing it of misleading customers and deceptive business practices. The attorney general’s office said in court filings that it received more than 400 customer complaints against Griddy in less than two weeks.

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