Breeze Energy, the Dallas retail electric company with thousands of customers in Houston, was shut down by Texas regulators after the company defaulted on its financial obligations, leaving industry analysts to speculate that the anticipation of higher wholesale electricity prices this summer may have put the retail electric provider in a financial squeeze.

The closure marks the first time in four years that state regulators have shut down a retail electricity provider.

The Electric Reliability Council of Texas, the nonprofit group that runs the state's power grid, notified Breeze Energy's 9,800 customers in Texas earlier this week that they would be shifted to other retail electricity companies. Notices went out by email.

Retail power companies retailers must put up certain amount of collateral, based on market share, to ensure payment for the electricty they buy in wholesale markets. ERCOT would not say how much Breeze Energy owed.

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Breeze Energy could not be reached for comment. The company, which sold wind power plans, has been in business for six years, according to records from the Public Utility Commission.

Power industry analysts speculated that the demise of Breeze Energy may reflect the expectations of higher wholesale electricity prices, a consequence of rising summer temperatures, recent closure of several coal-fired power plants, and fewer power reserves to call on at times of peak electricity demand. Retail providers will likely have to pay more for electricity in the coming weeks, but they can't recover the costs from customers locked into fixed-rate contracts.

"I suspect other retailers are in a similar boat," said Fred Anders, the founder of Texas Power Guide in Houston, a website that calculates the cost of retail electricity plans.

Breeze Energy has been a low-cost leader in Houston for about the past 18 months, he said, referring to electricity sellers that offer low rates to attract customers.

But those low-priced teaser rates have largely disappeared as Texas regulators have sounded the alarm the tight reserves could mean spikes in wholesale power prices. Most of Texas, including the Houston area, has a 50 percent chance of higher than normal temperatures in June, July and August, according to the National Weather Service.

Already, Houston has set a record for May, logging 20 days of 90-plus degree heat. The last time May was so hot was in 2003 when Houston recorded 18 days of 90 or more degrees, according to the National Weather Service.

At the moment, wholesale electricity rates have held relatively steady and are about half what they were a year ago, according to ERCOT data. But it's anyone's guess when they'll start to increase. Or whether any other retail power companies will default on their collateral obligations

Reliant will take over about 30 percent of Breeze's customers in Houston, according to spokeswoman Pat Hammond. Other providers will also step in to provide power.

When electricity customers are involuntarily shifted to other providers, their electricity rates increase overnight because the new rates are market prices with no incentive pricing. Customers who are switched should shop for new plans, according to the Public Utility Commission, which encourages customers to use the website powertochoose.org to find more favorable rates.

Customers who are involuntarily switched do not have to pay cancellation fees to their previous provider, according to the utility commission.

The last time ERCOT shut down a retail electric provider was in 2014 when the license of Fort Worth-based Proton Energy was revoked by the Public Utility Commission after the regulator received more than 1,000 customer complaints about preventing customers from switching to other providers, disconnection of service and other consumer-related problems.