RWE sees three-digit million profit hit from Texas' winter freeze

German power utility RWE AG (ETR:RWE) on Thursday warned that the ongoing extreme weather conditions in Texas will have an adverse impact on its earnings this year.

The negative effect on earnings before interest, tax, depreciation and amortisation (EBITDA) of the Onshore Wind/Solar segment is seen to be in the range of “low to medium three digit million” amount in Euro, the company said in a bourse filing. It explained that the blow will be taken as it was forced to buy electricity at “abnormal high pricing conditions” in order to meet its own delivery obligations.

The strong winter storm and freezing temperatures in Texas are causing power outages across the state and wind turbines are getting out of service, while electricity demand is on the rise with people staying home. The Public Utility Commission of Texas has ordered the Electric Reliability Council of Texas (ERCOT) to adjust the price of energy in order to reflect the scarcity of supply.

More than four million people in Texas are said to have suffered from the power shortages.

RWE said that the actual burden on its performance cannot be estimated at this point in time.

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