Electricity and gas provider Just Energy warned that the financial impact of the Texas winter storms could force it out of business.
Just Energy said Monday that it could lose about $250 million from Texas’ deep freeze that left millions without power last week. The hit “could be materially adverse to the Company’s liquidity and its ability to continue as a going concern,” it said in a press release.
Canada-based Just Energy (JE) shares dropped more that 30% in early trading on the Toronto Stock Exchange.
The massive spike in energy demand during Texas’ cold snap sent prices soaring. Just Energy noted that Texas energy prices were selling for as much as $9,000 per megawatt hour for much of last week — the cap Texas’ energy regulator imposed on the market. Prices had been around $50 a megawatt hour prior to the storm, according to Ercot, Texas’ electrical grid operator.
The price spike left many customers with electric bills in the thousands of dollars. Texas’ utility regulator, Public Utility Commission of Texas (PUCT), said it is investigating “the factors that combined with the devastating winter weather to disrupt the flow of power to millions of Texas homes.”
But rising prices also caught alternative energy providers like Just Energy off guard. The company accesses electricity and natural gas from wholesale markets, which were thrown out of whack during the Texas storms. As costs soared, Just Energy, which guarantees prices for some customers, wasn’t able to recoup its losses.
The company said it would delay the announcement of its fourth-quarter financial statement as it works to determine the financial impact of the Texas storms. The company wasn’t in great financial shape before the cold crisis — Just Energy shook up its board and restructured its massive debt last summer.
On Monday morning, more than 15,700 people were without power across the state, according to poweroutage.us. Texas Gov. Greg Abbott said Sunday he expected all power to be fully restored to every house by late Sunday or Monday.