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The deep freeze in Texas that left most of the state without power and threw energy markets into turmoil last month has resulted in significant paper gains for Goldman Sachs Group, according to reports from Bloomberg.
If the investment bank collects, it could gain more than $200 million from both the physical sale of power and natural gas, and the financial hedges after spot prices surged, Bloomberg revealed.
But the potential gains remain in question, especially with energy companies at the brink of bankruptcy, pushing the government to intervene. Some executives told Bloomberg that they may not even realize half of the gains currently on paper.
Bank of America, another bank that stands to benefit from the crisis in the Lone Star State, reportedly gained hundreds of millions of dollars in trading revenue, according to the Financial Times.
The gains of both banks underscore the contrasting effect brought on by the event, upending living conditions for millions of Americans while Wall Street profited.
Bank of America's Houston-based energy trading group, the Financial Times reported, had electricity contracts that spiked when wholesale power prices jumped 10,000% during the third week of February.
While Bank of America declined to reveal the revenue it gained from the blackout, it told Financial Times that "revenue related to this activity will be offset by losses and reduced revenues related to investments in wind and other alternate power suppliers in Texas and other affected markets."
For both banks, the gains are dependent on a range of outcomes, from the future of gas suppliers and power generators to the policies state lawmakers will enact in the wake of the natural disaster.
In February, roughly half a million Texans were left without power as arctic weather pummeled the state, catching the country by surprise. The blackout was among the largest in US history.
