RE:What can be the real impact to JE from Weather Event in TexaThose wholesale electricity prices in Texas jumped to mind boggling levels from Feb 14 to to Feb 19 according to the company's statement:
The financial impact of the Weather Event is not currently known due to challenges the Company is experiencing in obtaining accurate information regarding customers’ usage from the applicable utilities. However, unless there is corrective action by the Texas government, because of, among other things,
the sustained high prices from February 13, 2021 through February 19, 2021, during which real time market prices were artificially set at USD $9,000/MWh for much of the week, it is likely that the Weather Event has resulted in a substantial negative financial impact to the Company. Based on current information available to the Company as of the time of this press release, the Company estimates that the financial impact of the Weather Event on the Company could be a loss of approximately USD $250 million (approximately CAD $315 million), but the financial impact could change as additional information becomes available to the Company. Accordingly, the financial impact of the Weather Event on the Company once known, could be materially adverse to the Company’s liquidity and its ability to continue as a going concern. The Company is in discussions with its key stakeholders regarding the impact of the Weather Event and will provide an update as appropriate.
https://investors.justenergy.com/news-releases/news-release-details/just-energy-group-inc-announces-substantial-financial-impact Looking at the fixed rates plans on the company's site for Texas, obviously you can see that its going to be a problem if you're obligated to sell electricity at somewhere between 11 to 13 cents per KWH ($120 to $130 per MWH) , while the wholesale price you're buying at skyrockets to $9000/MWH...thats going to cause some serious financial pain...obviously you would expect the company to hedge some of their obligations.However, thus far, according to the new releases, it appears that their hedges were insufficient for this black swan event.
GaillardDeshaie wrote: Hello investors, this is not for speculators BTW. What can be the real impact to JE from Weather Event in Texas? Well, JE got around 1 million of customers mainly in North America, over 6 provinces in Canada and 14 states in USA. Without knowing how many customers only in Texas, if we estimated that from 1 millions customers between 20 business area, it will be an average of 50,000 customers per province/states. Let's say they have 75000 customers in Texas. From there, how many were on fix rate? Probably nearby 60%, your guess is as good as mine, so it is around 45000 customers. If the company announced earlier this week, they might have a lost of $230m that's mean the lost for each consumers will be over $5000!!! for 5 days of Weather event. Which is $1000 per day per consumers. For me, it make no sense. So, feel free to give me a good explanation of what can be else. IMHO. GLTA on Friday Q3 results and later news on the Weather Event. Gaillard