ERCOT revealded Griddy owes nearly $25 million.
BIC Magazine reported:
Texas’s grid operator on Friday shut Griddy Energy LLC’s access to the state’s power network for unpaid bills and shifted its 10,000 customers to other utilities, as new signs of a financial crisis rose after a state-wide blackout, as reported by Reuters.
Griddy was the power marketer that sold consumers electricity at wholesale rates, which rose to $9,000 per megawatt hour as cold weather struck the state last week. Unable to cope with demand, utilities cut power to 4.3 million residents as temperatures fell below freezing.
BIC Magazine did not mention Macquarie's recent investment in Griddy, announced in December:
Griddy Energy, the pioneer of direct-to-consumer wholesale electricity in Texas, appoints Michael Fallquist as Chief Executive Officer, Christian McArthur as Chief Operating Officer and Roop Bhullar as Chief Financial Officer and enters into an agreement with Macquarie Energy, a subsidiary of the Macquarie Group, to provide a wholesale supply facility and investment capital to support Griddy's growth and market expansion.
With this new leadership team, their main focus for the upcoming months will be:
- Solutions to combat price volatility, including a "price lock" feature for peak periods
- A network marketing program to rapidly grow the business in Texas and facilitate expansion into new markets
The news wasn't all bad for Macquarie, an Australian investment bank with numerous affiliates.
Australia’s Macquarie was one of the largest winners in the cold snap, benefiting from record U.S. natural gas prices. It could collect a $317 million profit from the weather-related gas binge, analysts said.Macquarie demanded Exxon cover the wholesaler’s $11.7 million in damages for missed deliveries. Exxon is suing to void the penalties.
The Texas legislature turned our electric system into a market that price gouged power to many as it left millions in the cold and dark. I was one of those Texans with no power for days..
In addition to energy trading, Macquarie owns controlling stakes in utilities and pipelines. Plus, it’s a major player in infrastructure privatization projects like highways, and could stand to benefit from a large-scale infrastructure bill being discussed in Congress. Macquarie is the next corporate giant we have to all learn about, and its recent history should not inspire confidence.While Macquarie sold its private equity division in 2014 the firm operates much like a PEU. It targets U.S. infrastructure and flips funds like PEUs flip affiliates.
Widespread suffering in Texas produced a profit guidance upgrade for Macquarie. Macquarie should change its name to "Greedy."
Update 2-11-23: Exxon will use its record profits to open a trading division in the "high risk, high reward world of energy derivatives." Is Jeff Skilling available for hire?
