AUSTIN (KXAN) — Texas’ attorney general is suing electricity provider Griddy for passing along massive bills to its customers during last month’s winter storm.
Attorney Ken Paxton says Griddy, LLC passed “skyrocketing energy costs to customers with little to no warning, resulting in consumers paying hundreds or even thousands of dollars each day for electricity.”
“As Texans struggled to survive this winter storm, Griddy made the suffering even worse as it debited outrageous amounts each day,” said Paxton.
The lawsuit accused Griddy of violating the Texas Deceptive Trade Practices Act and seeks refunds for customers. The unusually heavy winter storm blanketed much of Texas with snow, knocking out electricity to 4 million customers and leaving many struggling to find clean water.
Griddy’s pricing model charges customers a $10 subscription fee and then uses the wholesale price of electricity, rather than a retail price, to charge customers for power. The indexed pricing model led to enormous spikes in bills for customers as wholesale prices shot up more than 300 times above normal during the storms as supply weakened and demand spiked.
One Griddy customer outside Houston filed a class-action lawsuit against the company after she received a $9,300 electric bill and it was directly debited from her bank account.
The wholesale price of electricity was $9 per kilowatt-hour during the storms due to a Public Utility Commission of Texas directive, Griddy says. For a home that uses roughly 2,000 kilowatt-hours of energy per month, Griddy says that works out to a cost of about $640 per day for power.
Griddy says the PUCT should have taken its price directive off when power was restored and there was enough generation, but they didn’t.
Griddy was banned from the state’s electric grid Friday by the Electric Reliability Council of Texas, and a statement on the company’s website says ERCOT “took our members and have effectively shut down Griddy.”
The company’s website message says, in part, “We have always been transparent and customer-centric at every step. We wanted to continue the fight for our members to get relief and that hasn’t changed.”
Griddy says they’ve paused billing until they get more data on actual customer energy usage, and they plan to release final bills to customers within 60 days.
Paxton says the company violated the TDTPA through “false, misleading and deceptive advertising and marketing practices.” KXAN contacted Griddy for a response to the lawsuit, and we will update this story once we receive one.
The Associated Press contributed to this report.