Griddy is obviously insolvent since its members are, so far with you. But many other providers are also defaulting. Why are they forcing only Griddy to shut down? Conspiracy theory: putting them into bankruptcy with no hope of recovery has a good chance of making all those huge bills you have read about in the press go away.
This strikes to me as a typical American solution to peoples crass financial ignorance: socialize the debts. Here is what happens next:
> If buyers are not able to cover their bills, Ercot will pay the generator and the charges will ultimately be spread out to other market participants, including other generators and traders, as permitted by regulations.
To be clear, today's decision actually is your quoted statement -- there was a $2.1B shortfall, so ERCOT is requiring payments from its transmitters to cover the payments it already made to the producers. Griddy is unable to cover its portion of this payment, so is exiting the business instead. There are other resellers in deficit, but none that I know of in default -- Green Mountain, Reliant, Encor, Vital, NEC and so on will simply pay their portion of the assessed shortfall and continue business as usual.
Further I don't think Griddy was actually a generator. I believe they fundamentally operated as broker/transmitters at best. I.e. futures trading. Everyone else had the capacity to meet demand, and Griddy served as the buyer to connect client demand to supplier generation capacity. Most of the other utilities have privately owned electrical infrastructure in play. That's part of the reason why Griddy got away for so long running as cash lean as they were. No infra upkeep, no maintenance to coordinate or hedge, just price discovery and arbitrage.
When all their customers were in a position, however, where they needed electricity from Griddy, but no one had any to sell... Well... That's why spot buying can leave you with your arse out in the cold.
I do feel sympathy for those caught out, but I also understand what Griddy's intent was, even if I think the position and business model they chose was unwise. It goes good when its all good, but when things go bad, you have a responsibility to have been planning for that eventuality.
It sucks. It feels wrong that it should end up happening that way. That's kinda jow life rolls though. At least, has been for me.
This strikes to me as a typical American solution to peoples crass financial ignorance: socialize the debts. Here is what happens next:
> If buyers are not able to cover their bills, Ercot will pay the generator and the charges will ultimately be spread out to other market participants, including other generators and traders, as permitted by regulations.