Genie Energy Estimates Preliminary Impact of Winter Storm Uri in Texas

Rhea-AI Summary

Genie Energy (NYSE: GNE, GNE.PRA) reported an estimated $12.5 million loss due to Winter Storm Uri, which disrupted Texas' electricity market in February 2021. The storm caused an unprecedented spike in electricity demand, leading to wholesale prices reaching maximum levels. Complete supply costs are not available yet, making the final loss uncertain. Genie Energy serves about 10,000 electricity meters in ERCOT's service area, representing 5% of its global customer base. Despite these challenges, the company maintains sufficient liquidity to manage its operations.

Positive

• Sufficient liquidity to manage operations during market disruptions.
• Continued service to approximately 10,000 electricity meters in Texas.

Negative

• Estimated loss of $12.5 million due to Winter Storm Uri.
• Uncertainty regarding final losses and ongoing disputes with regulatory agencies.

NEWARK, N.J., March 8, 2021 /PRNewswire/ -- Genie Energy (NYSE: GNE, GNEPRA) today provided additional information on the financial impact to the company of Winter Storm Uri, which disrupted the Texas electricity market in mid-February 2021. 

The unprecedented severity of the storm triggered an exceptional increase in electricity demand.  As a result, wholesale prices in the Electric Reliability Council of Texas ("ERCOT") service area reached or exceeded maximum allowed clearing prices for sustained periods.

Because complete supply costs are not yet available, Genie Energy is not yet able to fully quantify the financial impact of Winter Storm Uri.  However, invoices received to date as well as other costs incurred place the loss from the situation in the first quarter of 2021 at approximately $12.5 million.  The final amount of the losses is still unknown. 

The company plans to provide updates when it announces fourth quarter 2020 results on March 11^th and when it gains access to complete price and volume settlement data from its supplier.  Moreover, the results of formal disputes regarding pricing and volume settlement and corrective actions that Genie and other market participants are seeking from the State of Texas, ERCOT, the Public Utility Commission of Texas, and other regulatory agencies of jurisdiction may impact the final cost. 

The company serves approximately 10,000 electricity meters in ERCOT's service territory comprising approximately 21,000 residential customer equivalents, or approximately 5% of its global customer base. 

Despite the evolving impact of the Winter Storm Uri in Texas, Genie Energy has consistently maintained, and continues to maintain, sufficient liquidity to conduct its operations in the ordinary course of business and management remains confident that the company has the resources to address the ultimate impacts from this extraordinary event.

In this press release, all statements that are not purely about historical facts, including, but not limited to, those in which we use the words "believe," "anticipate," "expect," "plan," "intend," "estimate, "target" and similar expressions, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  While these forward-looking statements represent our current judgment of what may happen in the future, actual results may differ materially from the results expressed or implied by these statements due to numerous important factors, including, but not limited to, those described in our most recent report on SEC Form 10-K (under the headings "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations"), which may be revised or supplemented in subsequent reports on SEC Forms 10-Q and 8-K.  We are under no obligation, and expressly disclaim any obligation, to update the forward-looking statements in this press release, whether as a result of new information, future events or otherwise.

ABOUT GENIE ENERGY LTD:
Genie Energy Ltd. (NYSE: GNE, GNEPRA), is a global provider of energy services.  The Genie Retail Energy division supplies electricity, including electricity from renewable resources, and natural gas to residential and small business customers in the United States. The Genie Retail Energy International division supplies customers in Europe and Asia.  The Genie Energy Services division includes Diversegy, a commercial and industrial brokerage and consultative services company, and Genie Solar Energy and Prism Solar, which design, supply and install commercial solar solutions. For more information, visit Genie.com.

 

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SOURCE Genie Energy Ltd.

FAQ

What is the estimated financial impact of Winter Storm Uri on Genie Energy's operations?

Genie Energy estimates a preliminary loss of approximately $12.5 million due to Winter Storm Uri.

When will Genie Energy provide updates on the financial impact of Winter Storm Uri?

Genie Energy plans to provide updates during the announcement of its fourth quarter results on March 11, 2021.

How many customers does Genie Energy serve in Texas?

Genie Energy serves approximately 10,000 electricity meters in Texas, equating to about 21,000 residential customer equivalents.

What percentage of Genie Energy's global customer base does its Texas service represent?

The Texas service represents about 5% of Genie Energy's global customer base.

What factors may affect the final financial impact of Winter Storm Uri for Genie Energy?

The final financial impact will depend on complete price and volume settlement data and the outcomes of disputes with regulatory agencies.