ERCOT and Brazos Electric Power Cooperative agreed last week to enter mediation over the amount of money the bankrupt cooperative owes the Texas grid operator’s market.
The agreement paused a two-week proceeding in Houston before the U.S. Bankruptcy Court for the Southern District of Texas and followed testimony Thursday by Kenan Ögelman, ERCOT’s vice president of commercial operations.
Ögelman explained to the presiding judge that ERCOT is a nonprofit, “invoice-in, payment-out” manager of the state’s electric market. Defaults on any power purchases would be uplifted to its participants, he said.
“How does ERCOT pay? They’re a clearinghouse. What assets do they have?” Chuck Gibbs, an attorney representing Brazos’ largest member, said last month during an Infocast ERCOT Market Summit. (See ERCOT’s Legal Issues Continue to Mount.)
U.S. Bankruptcy Judge David Jones suggested the two sides reach an agreement over their differences “to make this all work. ERCOT … [is] a lifeblood for everybody that lives in this state.”
ERCOT and Brazos will mediate their dispute before Judge Marvin Isgur, the court’s other presiding judge. The bankruptcy proceeding is expected to resume in April.
At issue is $1.9 billion in market charges ERCOT assigned to Brazos during last February’s winter storm, when regulators ordered prices be kept at $9,000/MWh over four days. The cooperative is not disputing how much energy it bought to compensate for its own plants that did not run, but it argues it should owe about $800 million (21-03863).
