$1B Class-Action Suit Filed Against Texas Wholesale Electricity Provider, Griddy

$1B Class-Action Suit Filed Against Texas Wholesale Electricity Provider, Griddy

2021-02-24 00:09:20
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A resident of Chambers County, Texas, has filed a class-action lawsuit against electricity store Griddy, accusing the provider of price gouging customers during last week's freeze. She is seeking $ 1 billion in aid for affected customers.

Lisa Khoury's attorneys said in the lawsuit that her bill went up to $ 9,340 in the week of the storm, compared to her average monthly bills that range from $ 200 to $ 250. Griddy has made multiple payments from Khoury & # 39; s bank account and raised $ 1,200 before blocking further charges from her bank. She still owes thousands.

Griddy passes wholesale electricity prices directly to customers, who in turn pay the company $ 10 per month. This differs from fixed-rate electricity plans that offer a consistent rate regardless of market conditions.

But due to a price hike fueled by a shortage of supply and skyrocketing demand, some customers faced bills charging tens of thousands of dollars. While electricity bills are likely to rise across the board, Texans with variable rate plans faced immediate and alarmingly high prices.

The Abbott-appointed Texas Public Benefit Commission raised the wholesale market price of electricity to $ 9 per kilowatt hour – a 7,400% increase from the average 12 cents per kilowatt hour – in response to rising demand. The hope was that power generators would be tempted to produce more electricity.

"Energy prices should reflect the scarcity of supply," the order said.

Griddy's representatives were not immediately available for comment. The electricity retailer referred to its concerns about price increases on its website and pledged the blame to the Public Benefit Commission. The company states that it has not benefited from price increases.

“You basically pay the same price as a private energy supplier or utility company. No markings. No hidden costs. No contracts. That's it, & # 39; said the company.

Last week, Griddy warned his 29,000 customers of impending price increases and encouraged them to look for other electricity companies. The company offers customers a deferred payment plan to pay off the balances over a five-month period.

"At Griddy, transparency has always been our goal," the company said in a blog post explaining the price increase. & # 39; We know you're angry and so are we. In fact angry. "

Griddy has vowed to fight the price increases, saying, "The market is supposed to set prices, not the political appointees."

Gov. Greg Abbott has said scaling back the bills will be a top priority, and the state's utility commission took action on Sunday to temporarily prevent electricity companies from cutting power to customers who don't pay and to send bills and cost estimates.

Energy and policy experts said Texas's decision not to require equipment upgrades to better withstand extreme winter temperatures, and its choice to operate largely isolated from other U.S. grids, left the power system unprepared for the winter crisis. Credit: Jordan Vonderhaar for The Texas Tribune

This suit is part of the latest in a line of suits filed in connection with winter storm damage. On Tuesday, Morgan & Morgan – a national plaintiffs office with more than 700 attorneys – announced a class action lawsuit against the Texas Electric Reliability Council, alleging that the operator "had not made plans for the cold despite multiple clear warnings. weather".

Lawyers write that ERCOT refused to winterize equipment despite recommendations from both the Texas Public Utilities Commission and the Federal Energy Regulatory Commission after other storms in 1989 and 2011.

The lawsuit was filed in Harris County's 133rd District Court on behalf of “all retail customers in the ERCOT region who lost electricity or drinking water services in the week of February 14, 2021 as a result of ERCOT's failure to ensure sufficient generation capacity. . "

“This was not the first time that ERCOT failed to plan and prepare for cold weather. But instead of drawing lessons from past failures, ERCOT once again ignored its obligations to its customers, ”attorneys Mike Morgan and Rene Rocha said in a statement.

It appears to be the first class action lawsuit brought against the operator.

Last weekend, Houston attorney Tony Buzbee filed a lawsuit against ERCOT and energy provider Entergy for a total of $ 100 million on behalf of a family whose son died in forced outages last week. Buzbee said he plans to file several more lawsuits against ERCOT and electricity suppliers.

Proceedings against ERCOT could face hurdles as the Texas Supreme Court is expected to weigh in this year whether ERCOT has sovereign immunity that would protect it from some lawsuits.

Disclosure: Entergy has been a financial supporter of The Texas Tribune, a non-profit, non-partisan news organization funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no part in the Tribune's journalism. Find a full list here.

"A Texas woman who has received a $ 9,300 electricity bill is filing a class-action lawsuit against electricity supplier Griddy," it was first published on https://www.texastribune.org/2021/02/23/texas-electric-bill-griddy/ by The Texas Tribune.

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