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SW WI | Winter Storm Uri and Hedge Losses
Winter Storm Uri struck Texas severely in February 2021. Sub-freezing temperatures caused widespread outages and dramatically reduced wind generation statewide. Shannon Wind's turbines suffered significant blade icing, which impeded production during the critical period.
ERCOT and the PUCT raised electricity prices to the $9,000/MWh regulatory ceiling for approximately four days.
Unable to deliver electricity at the ~$26.20/MWh hedge price, the Company was liable to purchase replacement energy at $9,000/MWh—a loss of approximately $8,974/MWh of shortfall.
Shannon Wind issued force majeure notices to CEI; CEI rejected the claim.
In March 2021, CEI invoiced $39.5 million. The Company disputed the invoice but lacked funds to satisfy it. CEI issued notices of default.
Litigation with CEI
In April 2021, Shannon Wind and Shannon Wind Holdings sued CEI in Harris County District Court seeking declaratory judgments that: (i) the storm constituted force majeure; (ii) CEI's invoice was improperly calculated and unenforceable; (iii) no default had occurred; and (iv) CEI's default notice was invalid. The Company also asserted breach of contract.
The court granted a TRO but denied preliminary injunction. The litigation proceeded through 2022 but was ultimately dismissed in February 2023, leaving Shannon Wind fully liable for hedge losses.
https://bondoro.com/shannon-wind/
Edited by swtcorn wi 2/22/2026 22:40
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Wind Farm Bankruptcy
