The oldest and largest electricity cooperative in Texas has filed for bankruptcy, saying the state’s massive winter storm had resulted in a “catastrophic ‘black swan’ financial event.”

According to CBS News, Brazos Electric Power Cooperative’s Chapter 11 petition “is likely to be the first of many” stemming from the storm that devastated Texas between Feb. 13 and 19.

The filing “suggests that while the power blackouts in Texas are over, the process of settling massive bills stemming from the energy crisis is just beginning as the financial fallout spreads,” The Wall Street Journal said.

Brazos, which serves 16 distribution member co-ops that retail energy to consumers, said it was a “model of financial stability” until the storm left it in “a liquidity trap that it cannot solve with its current balance sheet.”

“Brazos Electric will not foist this catastrophic ‘black swan’ financial event onto its members and their consumers,” Clifton Karnei, the company’s general manager, said in a court declaration.

When power companies went down during the storm, ERCOT, which operates Texas’ power grid, set the maximum wholesale price for electricity at $9,000 per megawatt hour for more than four straight days and also imposed ancillary fees totaling more than $25,000 per MWh.

“The consequences of these prices were devastating,” Karnei said, as ERCOT presented Brazos with invoices amounting to more than $2.1 billion, including collateral calls, with payment required within days.

According to Karnei, the invoice was nearly three times as much as Brazos spent buying power for its cooperative members in all of 2020.

Brazos has more than 2,682 miles of electrical transmission lines and 385 substations, making it Texas’ sixth-largest transmission provider. It purchases power from a coal-fired plant, a solar power facility and a hydroelectric plant.

“We will probably see a whole bunch of electric providers go out of business, particularly those that offer fixed-rate plans to people,” Joshua Rhodes, a research associate at the University of Texas at Austin, said. “If you’re selling it for 10 cents a kilowatt-hour and paying $9 per kilowatt-hour, it doesn’t take long to mess up your balance sheet.”

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