Electricity is a commodity often taken for granted by many people around the world. Power outages quickly remind one of how many things are powered by and how much one relies on electricity. Texas has lately been dealing with multiple issues regarding the use of electricity throughout the state. Discussions about the problems have lost much of their prominence after new studies were released, but a recent bankruptcy filing may revive the importance of the topic.
A certain amount of extra power is necessary to avoid straining the power supply and causing outages. This surplus has been decreasing steadily as Texas consumers’ electricity use has drastically increased. Several of the generators are attempting to create a system in which they would be paid to make electricity available in the future, therefore increasing the desire to build more power plants. However, many key people are opposed to this idea.
Contrary to the beliefs of many of the opposition, the costs difference between this new market system and the one currently in place would be minute. At the same time, the predicted amount of growth in electricity use in the future is much smaller than it has been over the last couple of years. If the market does not change, new plants are unlikely and more power generators, like Optim Energy LLC, will file bankruptcy because of depressed conditions resulting in continued financial losses. This bankruptcy filing may be the push lawmakers need to come to the best solution for the economy.
The importance of electricity in Texas and in the rest of the world cannot be ignored. One of the most prominent power suppliers had to file for bankruptcy because of financial losses that their debtors could not overcome. Fortunately, this bankruptcy filing allows the company to restructure its debt and forces the organization responsible for electrical market reform to look at the issues once again.
Source: Reuters, Gates-led power-unit bankruptcy may revive Texas electric debate, No author, Feb. 12, 2014