BURLESON—United Cooperative Services’ (United) wholesale power supplier, Brazos Electric Power Cooperative, Inc. (Brazos), filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of Texas. Brazos took this action to protect its 16 member cooperatives and their retail members from unaffordable electric bills as a result of astronomical wholesale electric market costs that occurred during the cold weather event Feb. 13-19.
Chapter 11 is a protective measure that will allow Brazos to maintain the stability and integrity of its entire electric cooperative system and allow the cooperative to continue to provide reliable power and transmission service to its member cooperatives—as it did prior to filing—while going through the bankruptcy process.
In a statement issued by Brazos, the organization “took this action because it determined that it cannot and will not foist this catastrophic financial event on its member cooperatives and their members.”
“Brazos Electric has been a strong, reliable, affordable generation and transmission cooperative for United for decades and we support their efforts to shield our members from the ERCOT market prices that hit $9,000/MWh during the February frigid weather event that required our members to endure four days of rotating outages,” said United CEO Cameron Smallwood. “While Brazos goes through the bankruptcy process, I want to assure our members that they will continue to receive reliable electric service.”
On Feb. 26, Smallwood had the opportunity to share before the Texas House of Representatives Committee on State Affairs and Energy Resources and Texas Senate Committee on Business and Commerce the cooperative members’ concerns regarding the ERCOT-mandated rotating outages.
Smallwood informed the committees that United is not a generation and transmission owner. United is a distribution cooperative that delivers electricity procured by Brazos Electric and there is concern about how much exposure Brazos and other power providers had to the highpriced wholesale power and how that will affect Texas consumers. Whereas lawmakers heard from other electricity providers during the two-day hearings that many of their customers experienced multi-day outages, Smallwood explained that United successfully executed its mandated rolling outages in 30 to 45-minute intervals.
Smallwood also alluded to the fact one of the biggest concerns that has been shared “very strongly with us, and obviously with the media,” were the well-documented instances where wholesale (electric) prices hit the ceiling and left market participants exposed——giving the appearance that price gouging was occurring at $9 per kWh when (United) charges $.084 per kWh. Smallwood relayed to the Senate Committee that members felt “the pricing was not fair and shouldn’t be passed on to the members.”
A major criticism of many Texas utilities was inadequate communications during the event. However, United was singled out and commended for leveraging a multi-pronged communications plan of social media, news media, website, email and texting.
United is a “bright spot in a very troubling and difficult couple of weeks we’ve had,” said Rep. Shelby Slawson (R-District 59). “I’m one of your members. We’ve heard a lot about the importance of communication with the public. I want to openly commend you and United Co-op for the way you handled that as a member [of the cooperative].”
United’s culture of communication is “something a lot of us could all learn from and is so important,” said Sen. Angela Paxton (R-District 8). “Teaching school, I had the opportunity to work with students on leadership…A lot of people think leadership is about having a title, but I always asked them to think of leadership as setting an example worth following and I think you’ve definitely set an example that’s worth following that we can all learn from,” she added.
Communications is “part of our DNA,” responded Smallwood. “Our understanding is that customers from other utilities were watching our social media and information because they were lacking information [from their providers],” he added.
About United Cooperative Services:
Established in 1938 and headquartered in Burleson, Texas, United Cooperative Services is an electric distribution cooperative serving 92,500 meters and more than 66,000 members. Maintaining 11,000 miles of energized line, United serves parts of Johnson, Erath, Hood, Bosque, Somervell, Palo Pinto, Coryell, Eastland, Comanche, Stephens, Young, Hamilton, Tarrant and Ellis counties.
