Customers who have already each paid thousands of dollars may also get some relief.
Griddy Energy customers are off the hook for their outrageous electric bills for February, according to Texas Attorney General Ken Paxton.
The attorney general’s office sued Griddy under the Texas Deceptive Trade Practices Act on behalf of 24,000 customers who have a cumulative $29.1 million in unpaid electric bills from the week of freezing temperatures in Texas last month.
The action Paxton took was to release Griddy’s former customers from Griddy’s bankruptcy, which it filed for Monday in Houston. Texas won’t move forward with its state court lawsuit and investigation, and “Griddy will work with it in good faith to resolve these matters,” the attorney general said.
Paxton’s office also said it’s working with Griddy to get some “relief” for people who have already paid their bills, some of which were several thousand dollars each.
“Griddy and my office are engaged in ongoing good faith negotiations to attempt to address additional relief for those Griddy customers who have already paid their storm-related energy bills,” Paxton said in a statement.
Griddy sold electric along with Generator Sage plans with rates tied to the spot price of power on the Texas grid, and that was allowed to go to a maximum price of $9,000 per megawatt-hour during the winter storm, up from about $25 or $30 under normal conditions. Customers couldn’t switch to another company’s fixed plan fast enough and ended up with unprecedented electric bills.
Customers who had been facing huge bills said they’re glad to move on with their lives.
Dallas resident DeAndré Upshaw still owed Griddy $7,100 for February after he paid $900 via automatic payments from his checking account.
“That would be super,” he said about his bill being addressed by the state. He wasn’t employed during the storm, and as of last week has a new job as a digital marking strategist working remotely for a company in Denver.
“I’m glad to not have to pay the money … and move on,” he said.
Upshaw had his bank stop the automatic withdrawals he had set up to pay his bill when withdrawals reached $900 in a few hours.
Griddy’s electricity plan differed from the fixed-rate monthly bills that most residential customers have in Texas. Griddy would take out preset increments of $25 or $100 that customers had previously selected as they reached that amount of electricity usage. Its customers could see their usage in real time through a phone app or computer. That allowed them to adjust their usage if they wanted.
“That’s awesome,” said Misti Jackson of Lindale about the state’s action. She still owed Griddy $1,400 on a $2,500 February bill.
“I wasn’t opposed to paying, but that was exorbitant. It needed some kind of reasonable cap,” she said, adding that she was actually “sorry to see Griddy go.”
Jackson is now on a fixed-rate plan with Reliant that costs more than her pre-winter storm Griddy bills.
“We never had an issue [with Griddy] before,” she said. Other customers also said they liked Griddy’s format because they could monitor their energy use and help control the price.
In its bankruptcy filing, Griddy said that it “was left with no customers and little to no incoming payments” for outstanding bills after Texas grid operator ERCOT notified it Feb. 26 that it was in default and forced a mass exodus of Griddy’s customers to other providers.
Before the storm, Griddy said, it was a thriving business with more than 29,000 customers who had saved more than $17 million on their electric bills since 2017.
Griddy did not profit from the winter storm crisis, said CEO Michael Fallquist.
“ERCOT made a bad situation worse for our customers by continuing to set prices at $9,000 per megawatt-hour long after firm load shed instructions had stopped,” he said. “Our customers paid 300 times more than the normal price for electricity during this period.”
Prices for wholesale electricity were set at $9,000 per megawatt-hour for almost 88 hours during the February energy crisis, which included extended power outages for 4 million Texans.
Griddy was owed $29 million, and ERCOT sent it a bill for $29 million. At that point, the company said it “was left in a position where it had no choice but to file this Chapter 11.”
Its bankruptcy filing is a liquidation, not a reorganization. Any assets would be used to pay Griddy’s creditors “while balancing the desire to give its former customers relief from the uncertainty of being subject to collection actions as a result of the extreme wholesale electricity prices.”
Griddy operates out of a small office building in Houston with 30 employees. It let half of its staff go after ERCOT shut it down.
Griddy listed assets of more than $1 million and less than $10 million in its bankruptcy filing. Its largest creditor is ERCOT for the $29 million that the attorney general’s agreement wipes out. Other significant debts include $1.23 million in transportation charges to CenterPoint Energy and $1.16 million to Oncor.