An unsettling report predicting the imminent bankruptcy of the Dallas-based electricity titan, Energy Future Holdings (EFH), is sending shockwaves through the energy and investment industries this week.

The report, released Monday by Moody?s, one of the nation?s flagship credit rating agencies, projects such a filing will likely rank among the country’s top 10 “largest nonfinancial corporate bankruptcies since 1980.”

Notable neighbors in that short list include Chrysler, Enron and General Motors, among others.

Moody’s analysts point to the deluge of debt stemming from Energy Future?s $45 billion acquisition of TXU Corp back in 2007 as the probable culprit.

While EFH and its investors rolled the dice on projected peaks in natural gas prices for solvency during the past six years, the firm continued reporting quarterly losses throughout as natural gas prices frequently fell to record lows.

Further fueling the losing streak was the reliance on projected gains from cheap coal-fired power expected to yield profits as Texans cranked up the air conditioning to cope with an unusually scorching summer.

This would turn out to be another losing bet for EFH, as the Electricity Reliability Council of Texas (ERCOT) reported record low power consumption for May through July, even despite a state-wide population boom.

Even if Texas did experience one unseasonable summer, the pricing for power can?t be equivocally projected thusly, nor can one summer bolster a firm in the black, as former ERCOT chairman Mark Armentrout pointed out in a recent statement. “It’s unusually cool this summer, and some companies may have predicted higher levels of electricity volumes and price,” said Armentrout, “[EFH] is talking about the long term. One summer doesn’t change that.”

The most recent fiscal report from August 2 on the Energy Future website indicates net losses in the hundreds of millions.
In its current standings, EFH has amassed an estimated $41 billion deficit, meaning only first-lien lenders stand to see a fraction of their money again while the rest of the lenders are expected to take the proverbial bath on the investments.

No concerns exist regarding any consequence on the power grid, should Energy Future enter bankruptcy proceedings. Emergency restructuring plans for the bankruptcy have been in place since April of 2013, likely shifting ownership to subsidiaries Luminant and Oncor for the most part.