How URECC is Paying the Debts for the 2021 Winter Storm URI
After the Storm
Current Debt Update
Amount of bill URECC received for power for the week of URI = $30 million+
Amount of loan obtained by URECC for payment of bill = $29 million
Years Financed = 7 years
Balance of loan still owed as of February 2023 = $23 million
Winter storm Uri caused a disaster for the State of Texas. Record breaking low temperatures and ice enveloped the state for a week. The president's restriction of the use of coal, forced the state to look to other means to generate enough electricity. Wind and solar were virtually useless, as the wind turbines froze, and the overcast skies limited the output of solar energy. The state turned to natural gas. Many of the gas wells froze. This left a minimal amount of gas to generate an incredible amount of power to supply the state. The grid neared collapsing, a collapse that could have left the entire state without power for weeks.
The limited amount of power available and the statewide demand caused gas prices to soar astronomically. When those power bills for that month were delivered to the electric companies and cooperatives that buy power for their customers, the amounts were simply devastating.
URECC's bill for all its members on an average month is in the ballpark of $8 million. The URECC power bill for the one week of the storm - $30 million. Being a non-profit, stand-alone business that does not receive government funding, the URECC Board of Directors and executive staff faced two options: 1. Send out outrageous bills for thousands of dollars to every URECC member, or 2. Borrow the money and finance it over the longest term possible. Option 2 was the obvious choice.
URECC borrowed $29 million to be financed over a 7 year period. There is a small addition to each member's monthly bill to repay this loan. Once again, there was no government assistance available to offset this bill, leaving the entire debt of the loan to URECC members who received power from URECC during Winter Storm URI.
***Note to members. The amount added to bills for payback is NOT Power Cost Recovery Factor (PCRF).
PCRF is a direct reflection of the fluctuation of the cost of electricity purchased by URECC. Read about PCRF here.
Winter Storm Uri
March 25, 2021
Texas’ Electric Cooperatives Remain Strong, Committed to Powering Co-op Country
February’s unprecedented polar vortex challenged Texas’ electrical grids, but Upshur Rural Electric Cooperative continues to deliver the safe and reliable electric service it has provided for more than 80 years.
“Electric cooperatives were born out of hardship and have weathered storms and other challenges for eight decades,” said Mike Williams, president and CEO of Texas Electric Cooperatives, the statewide association for distribution and generation cooperatives. “The co-op family remains strong and firmly committed to powering members and communities across our great state. We’re here to stay.”
Upshur Rural Electric Cooperative is a member-owned and member-led cooperative that exists only to serve its members, not to make a profit. In fact, revenues earned beyond the cost of the co-op’s operations are returned to members in the form of capital credits. Electric bills from the co-op are tied directly to the amount of electricity each member uses, and the cost of that power. The co-op never charges members for electricity when their power is off.
Electric cooperatives have a long history of working with Texas’ leaders to ensure your electricity remains safe, reliable and affordable. We don’t yet know all the impacts of the recent storm, but we remain focused on protecting our co-op’s members and employees from devastating effects. The expenses with power during the winter storm were extreme, and URECC’s efforts are to minimize the expenses our members will have to pay presently. Electric cooperatives and electric companies in Texas will be paying long-term for years for the extremities of the winter storm. Our goal at URECC is to spread those expenses out over a long length of time, reducing the economic impact on our members. The Board of Directors and upper management are working hard daily for you, our member, to find solutions to the winter storm economic impact on URECC and its members.
We will continue to work diligently on behalf of our members and employees as we learn from this event. Throughout this assessment and learning process, we pledge to keep our members and the general public informed every step of the way. At URECC, we remain focused on our primary mission: providing safe and reliable energy solutions to our members at a fair price—a commitment that has guided our business for more than 80 years.