Just Energy, a Canadian power company headquartered in Houston, is at risk of going out of business after the freezing storm that hit Texas last week; company announced today that, due to the financial hit, it may go bankrupt.
Firstly, the company remarked it could lose about $250 million after the freezing storm; such hit in its financials “could be materially adverse to the Company’s liquidity and its ability to continue as a going concern.”
Secondly, after the freezing storm, Just Energy’s shares dropped more than 30% in the early trading on the Toronto Stock Exchange, reports local news media.
As we reported previously, electric and natural gas prices spiked during the cold. Just Energy noted that prices were selling at $9000 per megawatt hour last week. According to ERCOT, state’s grid operator, before the storm prices were around $50 per MWh.
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Just Energy financialy hit before the storm
Consequently, spike in prices left millions of customers with electric bills around the thousands of dollars; also, leaving off guard independent energy providers like Just Energy. Moreover, as the company accesses energy through the natural gas and electricity wholesale markets it couldn’t cap with the increase.
In addition, the company said it would delay its fourth-quarter financial statement, as it is still working on the impact the storm had on its financials. In fact, the company wasn’t at its best shape before the storm, as it faced massive debt since last summer.
This Monday morning, more than 15,700 people were still out of power across the state of Texas, according to poweroutage.us. However, predictions from experts said as for this Monday, February 21, power would be completely restored.
Finally, natural gas pipeline exports to Mexico restored to nearly 5,2 billions of cubic feet per day last Friday; as the freezing storm started to pass, refineries and oil wells prepared to restore their operations.