Abacus Resources Energy Says Continued Operation Required to Pay Debt Accrued Under Default

April 19, 2011
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Abacus Resources Energy, LLC asked the PUCT to dismiss Staff's petition for a revocation of Abacus' REP certificate, due to its default on ERCOT obligations, claiming that its continued operation is essential for it to be able to repay some $1.2 million owed to ERCOT and the TDUs (39192).

Abacus said that its investor, "has arranged for additional funding, however that funding is not available after April, 2011 because if the company is forced to stay dormant for too long, it will be extremely difficult for Abacus to regain the momentum that it has developed with its Broker relationship that allows Abacus to obtain customers with no acquisition cost which allows Abacus to be profitable enough to pay back all the parties of this proceeding."

Abacus listed current monies owed as follows:
ERCOT: $731,419.61
Oncor: $235,136.22
CenterPoint: $21,547.94
AEP Central: $160,623.48
AEP North: $16,624.76
Texas-New Mexico Power: $46,290.24
Total: $1,211,642.25

Abacus said that, prior to the February 2-3 weather event, its normal load was 386 MWh per day with an average price of $47.00 per MWh, equaling a cost of $18,142. With balancing energy prices reaching $3,000 during the weather event, Abacus said that its bill for two days went to over $800,000, "which Abacus could not have anticipated thus cash reserves were not sufficient to cover this enormous increase in energy cost for those two days."

However, the TDUs have alleged numerous instances prior to the February weather event in which Abacus is alleged to have defaulted on its TDU obligations. In some cases these amounts were eventually paid, but in others, including monies owed prior to the February weather event, the bills remain outstanding.

Specifically, Oncor alleged that Abacus defaulted on its financial obligations to Oncor on about 64 occasions from January 05, 2011 through March 31, 2011.

CenterPoint alleged that, prior to February 2011, Abacus defaulted on its obligations to CenterPoint on four separate occasions, including as early as September 2010, though all of these earlier defaults were cured.

The AEP companies alleged that Abacus defaulted on its obligations to AEP on three separate occasions prior to the February event, including as early as July 2010. AEP alleged that Abacus has failed to pay any charges from AEP TCC since January 19, 2011 and has failed to pay any charges from AEP TNC since January 31, 2011.

Texas-New Mexico alleged that Abacus' last payment to TNMP was on January 7, 2011, and since then, Abacus has defaulted on its obligations to TNMP on at least eight separate occasions.

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