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Anec reduces forecast for Brazil soy exports in February to up to 6 million tons

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Texans would pay the costs of the energy crisis for decades

(Bloomberg) – Now that the power is back in Texas, the state must figure out who will pay for the energy crisis that plunged millions into darkness last week. It is likely to be borne by ordinary Texans, at $ 50.6 billion, spanning the cost of electricity sold from early Monday, when the blackouts began, to Friday morning, according to estimates by BloombergNEF. This contrasts with US $ 4.2 billion a week earlier. Some of these costs have already fallen on consumers, with electricity customers exposed to wholesale prices that have racked up energy bills of up to US $ 8,000 in the past week. Other customers don’t know what to expect when they receive their gas and electricity bills at the end of the month. Ultimately, the financial burden will likely be shared equally between public company customers and taxpayers, said Michael Webber, a professor at the University of Texas at Austin and director of science at French power company Engie SA. If past power market failures America’s guide, Texans will be tied up for decades. Californians, for example, have spent about 20 years paying for the Enron-era electricity crisis of 2000-2001 through surcharges on utility bills. CPS Energy, owned and operated by the City of San Antonio , said on Twitter that he was looking for ways to spread the week’s costs over the next 10 years. The suggestion was not to the liking of his clients, who criticized the company’s proposal during a board meeting Monday. “Spreading this cost over a decade is unacceptable,” said Aaron Argüello, organizer for Move Texas. “Customers are already in debt with student loans, mortgages, and other payments.” But companies that posted huge losses as the cost of electricity soared last week will inevitably try to recover through their customers, taxpayers, or bonds. How quickly Texans pay depends on who their supplier is. Gas companies typically pass the costs on to customers at the end of the monthly billing cycle, said Toby Shea, senior loan officer for Moody’s Investors Service. Municipal utilities, cooperatives, and regulated energy providers have the ability to spread costs over a longer term. “It’s very easy for a government to extend this for many years and even a few months,” he said. CPS CEO Paula Gold-Williams said last week that the company could also issue bonds to help pay for natural gas that bought at inflated prices. Some utilities are looking to raise hundreds of millions of dollars in liquidity to spread costs over 10 to 20 years, said Scott Sagen, associate director of U.S. public finance at S&P Global Ratings. of utilities companies are in talks with their banks to obtain liquidity to pay their current debts and to be able to obtain a bridge loan that they will convert into long-term bonds. “They are trying to smooth out these costs as much as possible and provide coverage for their customers,” Sagen said. But small retailers that tend to be less capitalized and less protected have limited options. One such company, Griddy, said last week that it would challenge the prices set by the network operator during the crisis, in an apparent attempt to recoup losses for itself and its customers. Another company, Octopus Energy, said Monday that it would forgive any energy bills that exceed the average price of electricity for the week and take on the resulting losses that could be in the millions of dollars. On Sunday, the state utility regulator barred Electricity vendors disconnect customers for non-payment, saying the governor and lawmakers need time to come up with a plan to address the bills first. In theory, the legislature could pass an emergency bill that covers the costs overcharged by generators during the crisis, said Julie Cohn, an energy historian with affiliations with the Rice University Center for Energy Studies and the University of Houston Center for Public History. “Another thing would be to say that you can have a competitive energy market, but prohibit the supplier from linking the price directly to the wholesale price, as Griddy does.” Original Note: Texans Will Pay for Decades as Crisis Tacks Billions Onto BillsFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source. © 2021 Bloomberg LP

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