A Case Study - Retail Electric Provider Bankruptcies
Date Submitted: 09/09/2006 23:01:22
Category: / Society & Culture / Education
Length: 7 pages (1938 words)
Category: / Society & Culture / Education
Length: 7 pages (1938 words)
A Case Study - Retail Electric Provider Bankruptcies
Texas Commercial Energy (the "Company" or "TCE") filed for bankruptcy
protection on March 6, 2003 in the Southern District of Texas following a sudden and
dramatic rise in the price of wholesale electricity. TCE is a Retail Electric Provider
("REP") serving commercial and light industrial customers in the region of Texas
administered by the Electric Reliability Council of Texas ("ERCOT"). TCE acquires
electricity on the wholesale market and then …
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…start-up companies to become involved in the ERCOT market and to
further the goal of deregulation of the retail power market, there is certainly the risk that a
company will become vulnerable to market fluctuations if it lacks the financial ability to
become fully hedged. Letters of credit are one way to provide such credit support and
can be used effectively in a bankruptcy case to provide additional financing and equitytype
capital for a debtor.
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