Bloomberg: “The largest power generation and transmission cooperative in Texas filed for bankruptcy in the wake of power outages that caused an energy crisis during the winter freeze last month. Brazos Electric Power Cooperative filed for Chapter 11 in the Texas after racking up an estimated $2.1 billion in charges over seven days of the freeze. Last year, it cost cooperative members $774 million for power for all of 2020. The magnitude of the charges ‘could not have been reasonably anticipated or modeled’ and far exceeds Brazos highest liquidity levels in recent years, Executive Vice President Clifton Karnei said in a bankruptcy court declaration. The cooperative on Feb. 25 told state grid operator the Electric Reliability Council of Texas that it wouldn’t pay the $2.1 billion sum, and Karnei resigned from Ercot’s board of directors, court papers show.”

“Brazos had ‘no choice’ but to file for bankruptcy, Karnei said. Chapter 11 protection lets Brazos keep operating while it works out a plan to repay creditors. The cooperative listed assets and liabilities of as much as $10 billion each. ‘Brazos Electric suddenly finds itself caught in a liquidity trap that it cannot solve with its current balance sheet,’ Karnei wrote in the declaration. Aside from its power bills, the cooperative has more than $2 billion of debt outstanding, spread across $1.56 billion of secured notes and about $480 million under a credit line administered by Bank of America Corp., court papers show. Brazos had A+ credit grade from Fitch Ratings and an A from S&P Global Ratings prior to the bankruptcy.”