Sony will offer ‘Ratchet and Clank’ PS4 for free, no PS Plus required

Bloomberg

Texans will pay for decades as the crisis rallies with billions

(Bloomberg) – Now that the lights have come on again in Texas, the state must figure out who will pay for the energy crisis that plunged millions into the dark last week. They will probably be ordinary Texans. Price so far: $ 50.6 billion, the price of electricity sold from early Monday, when power outages began, to Friday morning, according to BloombergNEF estimates. That compares to $ 4.2 billion for the previous week. Some of those costs have already fallen on consumers as electricity buyers exposed to wholesale prices broke their electricity bills of as much as $ 8,000 last week. Other customers won’t know what they’re up to until they get their gas and electricity bills at the end of the month. Ultimately, the financial pain is likely to be shared by both taxpayers and taxpayers, said Michael Webber, a professor at the University of Texas at Austin and chief scientific officer of French power company Engie SA. If there have been any previous failures in the U.S. electricity market, Texans could be under attack for decades. Californians, for example, spent about 20 years paying for the 2000- to 2001-era Enron-era electricity crisis, paying extra for utility bills. CPS Energy, which is owned and operated by the city of San Antonio, announced on Twitter that it is exploring ways to allocate costs for the past week over the next 10 years. That didn’t sit well with customers who opposed the company’s proposal during Monday’s board meeting. “Spreading the cost of this event over a decade is unacceptable,” said Aaron Arguello, organizer of Move Texas. “Customers are already in debt with student loans, mortgages and other payments.” But companies that have suffered huge losses as electricity costs rose sharply last week will inevitably try to recoup them to their customers, taxpayers or bonds. How fast Texans pay depends on who their supplier is. Gas companies typically pass on costs to customers at the end of the monthly billing cycle, said Toby Shea, a senior loan officer at Moody’s Investors Service. Municipal utilities, cooperatives and regulated electricity suppliers have the option of allocating costs over a longer period of time. “It is very easy for the authorities to spread this for many years, even several months,” he said. CPS CEO Paula Gold-Williams said last week that the company might also issue bonds to help pay for the natural gas it bought. at inflated prices. Some utilities want to provide hundreds of millions of dollars in liquidity to spread costs over 10 to 20 years, said Scott Sagen, assistant director of U.S. public finance at S&P Global Ratings. For example, Rayburn Country Electric Cooperative Inc. took full advantage of a $ 250 million syndicated credit line and recently entered into a $ 300 million bilateral credit line with National Rural Utilities Cooperative Finance Corp. for a year, according to an S&P Monday report.Several utility companies are negotiating with their banks to get liquidity to repay their current debts so they can then take a bridge loan to convert into long-term bonds. “They are trying to equalize these costs as much as possible and provide coverage for their customers,” Sagen said. But small traders who are mostly thin-capped and less robustly protected have limited options. One such company, Griddy, said last week that it would challenge the prices set by the network operator during the crisis, with the apparent intention of making up for the losses for itself and its customers. Another company, Octopus Energy, said Monday it would forgive all energy bills that exceed the average electricity price for that week and eat up the losses incurred, which could be in the millions of dollars. The state regulator for utilities on Sunday blocked electricity sellers from shutting out customers. for non-payment, saying that the governor and legislators need time to first make a plan to settle the heavenly accounts. Lawmakers in Texas are likely to begin a debate on consumer benefits as part of a hearing of their committees on the crisis that will begin this week, a spokesman for the Texas Public Utilities Commission said. In theory, the legislature could pass an emergency law that could cover the exorbitant costs charged by generators during a crisis, said Julie Cohn, an energy historian with members of Rice University’s Center for Energy Studies and the University of Houston’s Center for Public History. “Another part would be to say that you can have a competitive electricity market that we have, but forbid the supplier to link the price directly to the wholesale price, as Griddy does.” That would be easier to do in a country taking more difficult regulatory access to its market. electricity, according to Webber. But Texas has decided to step down with its deregulated system, he said. “The question is where does the money come from?” Shea said. “Will Texas go and save certain customers? It is not their attitude towards the way they manage their market or manage the economy. For more articles like this, visit us at bloomberg.comReubscribe now to take advantage of the most trusted business news source. © 2021 Bloomberg LP

Source