Electric Company Files For Bankruptcy, Asks To Cancel Contracts
POSTED: Monday, June 9, 2008
UPDATED: 5:05 pm CDT June 9,2008
HOUSTON -- Your power company could be canceling your electric contract with the permission of a federal judge. Houston-based Riverway Power Company is the latest electric provider to fall into financial trouble, taking thousands of its customers down with it.Riverway Power Company is the fourth electric company in the past month to cancel or try to cancel contracts with its customers.Tuesday morning, in an emergency hearing, a federal bankruptcy judge will decide if nearly 5,000 customers will have to find new electric companies at much higher rates."Something is wrong when customers cannot depend, cannot trust their electric service provider to be in business," consumer advocate Randall Chapman told commissioners at a Public Utility Commission meeting last month.Days later, Riverway Power filed for Chapter 11 bankruptcy."This is hurting a lot of people," consumer Ronnie Miller said.The news is a double whammy for Miller. His power company, National Power, went out of business in late May. He chose Riverway Power for his disabled son."They need to make sure that the companies they're letting sell here are responsible companies and can back what they're doing," Miller said.In court documents Riverway wrote, "On or about May 19 and 24, there was an unexpected high spike in the power usage by Riverway's customers."The spike in usage meant Riverway had to pay ERCOT more money for the extra power -- money Riverway didn't have.The company filed Chapter 11 bankruptcy to protect it from creditors and prevent the state from transferring all of its customers to other electric providers.But then Riverway asked the bankruptcy judge permission to cancel its fixed rate contracts, writing, "in light of the unprecedented increases in the cost of electrical power, the contracts are no longer profitable."If you're a Riverway customer and you want to know if Riverway is trying to cancel your contract, you can search for your name in the court document listed below.More Information
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