ICE COLD

Wall Street Profited While Texans Shivered in the Dark

Bank of America made hundreds of millions in trading revenue when the Lone Star state’s electric grid failed in February.

When the Texas electric grid failed in February, plunging 4.5 million residents and businesses into the dark for several days, Bank of America made hundreds of millions in trading revenue. The bank’s energy trading group in Houston held several electricity contracts during the outage, which sent power prices up by nearly 10,000 percent. By the third week of February, wholesale power in Texas was selling for $9,000 a megawatt-hour. Banks have been relatively mum about their trading activity during the outage, but Bank of America’s revenue increase highlights how Wall Street saw an upside to the state’s misfortune. The Australian bank Macquarie, one of the few banks to disclose their profits so far, reported a $234 million gain (A$300 million) from natural gas trading–or a 5 to 10 percent increase in annual group profit.