During an October 3 investor call, NRG Energy Chief Executive Officer David Crane said that he had expected a number of retail electric providers in Texas to go out of business due to the extreme heat and wholesale energy price shocks which strained retail providers during the entire month of August, and said that he anticipated significant "fallout" from the wholesale market price spikes which ate into retail electricity providers' profits and stressed their balance sheets.
"[I]t was a very, very difficult month to be a retailer in Texas," Crane said. NRG runs retail providers Reliant Energy, Green Mountain Energy, and Pennywise Power.
To date, there have been no public defaults by retail electric providers as a result of the challenging market environment, and while there have been one or two sales of retail providers, none were definitively linked to the extreme market conditions in August.
However, it's fair to say that many observers of the Texas electric market are waiting for the other shoe to drop when it comes to the impact from the extreme August heat on retail electric providers. As SaveOnEnergy.com noted recently, every other market "shock" in the Texas market, such as the aftermath of hurricanes Katrina and Rita in 2005-06, the congestion-related price spikes in 2008, and the February blackouts this year, have been followed by at least one default by a retail energy provider -- meaning these providers' customers were left stranded and stuck paying much higher electric rates to the Provider of Last Resort.
That's why customers need to make sure they're with a safe and stable retail electric provider. It's why customers shopping for a low electric rate can't just log onto the state-run price website, or do an internet search, because there's no way to know if the providers offering low rates on those sites will be around a month from now.