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Illustration: Annelise Capossela/Axios

Texas has thawed out after an Arctic freeze last month threw the state into a power crisis. But the financial turmoil from power grid shock is just starting to take shape.

Why it matters: In total, electricity companies are billions of dollars short on the post-storm payments they now owe to the state's grid operator. There's no clear path for how they will pay — something being watched closely across the country as extreme weather events become more common.

Catch up quick: There was a "cascading failure of infrastructures" in the wake of the statewide cold front, says Josh Rhodes, a research fellow at the University of Texas at Austin's Webber Energy Group.

  • "Our gas, electricity and water grids failed," while millions went without power and water. Officials are still tallying how many died.
  • One example of the massive money effect: Wholesale power prices rose from roughly $50 per megawatt hour to $9,000. As the costs for electric companies rose, resident bills also soared.

What's happening: Electricity providers can't pay the Electric Reliability Council of Texas (ERCOT), which operates the state's power grid, for the power they used.

  • So ERCOT is now short on what it has to pay power generators.
  • Think of the ERCOT like a clearinghouse. It collects money from electricity providers. It then pays the companies that produce power.

The domino-effect fallout from the massive price spike is still taking shape. Just this week ...

  • Brazos Electric Power — the state's oldest and largest power company — couldn't pay $1.8 billion of its ERCOT bill and filed for bankruptcy, the first to come as a direct result of the crisis.
  • Entrust Energy became the second electricity provider to be barred from Texas' power market by ERCOT. It can't pay its bill, either.
  • Another — Energy Monger — is preparing for the same fate and started offloading customers this week, per Bloomberg.
  • The unpaid bills to ERCOT, in total: over $2.2 billion.

Also this week: Heads started to roll at the top decision-making bodies.

  • The chair of the state's top energy regulator Public Utility Council, which oversees ERCOT, is out. So is the head of ERCOT.

Between the lines: Regulators said today they aren't going to retroactively reprice electricity costs — even though a watchdog said they overcharged companies by as much as $16 billion, the Texas Tribune reported.

What to watch ... The worst-case scenario: Residents on the hook for decades.

  • The cost could be passed along to Texas customers as a surcharge. But current laws limit how much utilities can charge you extra per month.
  • "With billions of dollars in short pay, you're talking decades to clean that up," Rhodes says.

Go deeper

Ben Geman, author of Generate
Mar 4, 2021 - Energy & Environment

Texas power grid operator fires CEO following deadly outages

Former ERCOT CEO Bill Magness. Photo: Aaron M. Sprecher/Bloomberg via Getty Images

Electric Reliability Council of Texas CEO Bill Magness, who heads the independent nonprofit entity that operates and manages the electricity grid for much of Texas, was fired Wednesday night, the Texas Tribune reports.

Why it matters: It's the latest fallout from last month's fatal power outages after extremely low temperatures that caused multiple types of generation to fail.

36 mins ago - World

Two years of COVID-19

Expand chart
Data: Our World in Data; Chart: Axios Visuals

Two years ago Wednesday, the first case of a mysterious new respiratory disease was discovered in Wuhan, China. Now, the Omicron variant has deepened concerns about just how much longer the coronavirus pandemic will last.

The big picture: More than 5 million people have died since that first case. Most people on earth have lived through some form of lockdown. 54% of the global population has had at least one vaccination, though the shots have been distributed unevenly.

Updated 13 hours ago - Politics & Policy

U.S. sounds alarm on Ukraine

Conscripts line up at a Russian railway station yesterday before departing for Army service. Photo: Sergei Malgavko/TASS via Getty Images

The Biden administration is "deeply concerned" by new intelligence — detailed for Axios and other outlets — showing Russia stepping up preparations to invade Ukraine as soon as early 2022.

Why it matters: Most of this was known from public sources and satellite imagery, but the administration is sending a stronger signal by releasing specific details from the intelligence community.