Texas Retail Provider Files For Bankruptcy, Cites Impact From Disconnection Moratorium

Texas retail electric provider Pogo Energy, LLC has filed a Chapter 11 petition for bankruptcy

Through various motions for relief, Pogo Energy sought to continue serving existing customers.

Pogo alleged that "price manipulation", in the form of, "PUCT interference with market pricing during the storm," caused its wholesale power invoice to exceed its normal February amount by more than 30 times, a cost greater than $26 million

Pogo, which focuses on the prepaid market, also cited the impact from the disconnection moratorium. "The DNP suspension ultimately produced over $1.4 million in potential bad debt, and took an enormous toll on the cash available to run the business."

"When added to the unprecedented February invoice, Pogo’s financial situation increasingly became untenable," Pogo said

Luminant serves as supplier, credit provider, and QSE for Pogo

Pogo alleged in its Chapter 11 filing that, "Pogo has developed a good working rapport with Luminant over the first three and a half years of its operation. Luminant has been a critical partner for Pogo Energy and its success during this time. However, once the damage from the Storm Uri impacted Pogo’s performance, the relationship became strained, and devolved into an impasse regarding the best approach to resolve the outstanding amount due to Luminant, which is in excess of $26 million. Because Vistra does not offer a prepaid product from its retail brands (and thus does not compete for, or have a need for, Pogo’s customers), Pogo believed that the best solution for both parties was through a workout or payment plan to allow Pogo to continue in business while paying off debt it could afford or manage. Luminant, for its part, has expressed only middling interest in working with Pogo on a payment plan or workout strategy, and hopes for reaching an agreement with Luminant have faded as Pogo’s limited resources have become increasingly stretched."

Pogo noted that in 2020 it had been serving 15,000 customers.

Pogo listed estimated liabilities of $10 million to $50 million, and estimated assets of $1 million to $10 million