Winter Storm Uri Update

From GM Billy Marricle

Wednesday, March 3, 2021 - I wanted to give everyone a quick update on the Winter Storm Uri and ERCOT market situation. I know you all are looking for answers and quite frankly, so am I. What I do know is that we still have not received our final bill from our QSE (qualified scheduling entity), Garland Power and Light.
To buy and sell electricity in the ERCOT market, you must either be or have a QSE and we chose Garland to be ours. We have been assured that the final numbers will be in our hands by the end of week and we will then know what we face.

I’ve seen posts on social media about why should we have to pay the bill and I am honestly looking into the ramifications if we don’t. Others have noticed that Brazos Electric Power Cooperative filed for bankruptcy and are wondering why we don’t do the same.
The answer is relative to both. If we fail to pay our bill or if we file bankruptcy, we may be locked out from future financing, as we then become a “bad risk” from our lender’s perspective. We utilize our lenders very often because capital is needed to pay our larger construction and vegetation management bills, as well as short term lines of credit to cover our power bills. We simply don’t keep tons of cash on hand.

We’ve been asked whether or not SBEC was fully exposed to the market prices during this event. The short answer to that is no, we were not fully exposed to the market prices of the event. Our wholesale power contracts, based upon historical load predictions covered a considerable amount of our load and only a portion was exposed to the full market price due to a record-breaking load demand caused by Winter Storm Uri.

We’ve been engaged in discussions with the legislative representatives, at the State and National level, for the SBEC territory, this week and have more planned for next week. They are very aware of the situation and are investigating the situation and possible solutions. It is important that they hear from you, the consumer, with any concerns that you may have. The State Finance and Business committee is holding a hearing on Thursday, 03/04/2021. The purpose of this hearing is to examine the financial impacts to the electric grid and market participants resulting from the extreme cold weather outages over February 14, 2021 to February 19, 2021. We have been told that they plan to grill the owners and operators of both the generation plants and the gas suppliers. Texas Senate Notice of Public Hearing: https://capitol.texas.gov/.../pdf/C5102021030409001.PDF If interested, you are able to view a live video feed of the hearing from the Texas Senate website: https://senate.texas.gov/ under the News & Media tab. While I do not expect immediate solutions from them, we will continue to investigate all possibilities.

Regardless of any outcome or relief that may or may not come months down the road, your board has to make some very tough decisions on the best way to mitigate the anticipated increase to our wholesale power from this event. Please keep in mind that the SBEC board and staff does not expect any increase to your bill immediately.
Rest assured, your bills will not be anything near what the local media or social media has led many to believe. Yes - your usage most likely increased due to the extreme cold weather and your bill will reflect the higher usage but, we are not implementing a change in the Generation & Transmission (G&T) portion of your billing at this time.

SBEC members are our friends, neighbors and family members. We aren’t just keeping electricity flowing to homes and business—we’re powering our community. That’s why we are deeply committed to providing safe and reliable energy solutions to our members—a commitment that has guided our business for more than 80 years. We welcome your input and are available to answer your questions by calling our office at 1-800-364-3171 during normal business hours Monday - Friday 8am to 5pm.