Texas Sues Power Company After Customers Received Sky-High Bills Amid Winter Storm

March 1, 2021 Updated: March 2, 2021

Texas attorney general Ken Paxton announced on Monday that it had sued an energy company for deceptive advertising after customers complained about exorbitant bills amid the state’s deep freeze.

Paxton’s office said the lawsuit seeks to prevent Griddy, LLC from further misrepresenting its energy prices and to recuperate costs for its customers who were billed hundreds of dollars, and in some cases thousands, for a few days of electricity during Texas’s winter storm.

“Griddy misled Texans and signed them up for services which, in a time of crisis, resulted in individual Texans each losing thousands of dollars. As Texans struggled to survive this winter storm, Griddy made the suffering even worse as it debited outrageous amounts each day,” Paxton said in a statement.

Griddy is a California-based based retail electric service provider that promotes itself as a more affordable alternative to traditional energy providers as it offers “wholesale” prices. It charges its customers a flat monthly rate of $9.99 and passes the price it purchased electricity onto the resident.

During times of low demand for power, the company is able to pass on savings to the customer. But during times of instability, customers face massive risks from the fluctuations in the market, the lawsuit said.

Paxton’s office alleged that Griddy has been persistently downplaying the nature and the extent of these risks.

During the February 2021 winter storm, Griddy’s customers were charged at “egregiously high price levels” and the company’s auto-billing system left many customer bank accounts overdrawn, many of whom were senior residents.

The lawsuit states that the division had received over 400 complaints about Griddy. One complainant said she was charged $4,677 in one week for electricity in her 800 square foot, one-bedroom apartment.

“Leaving these consumers especially vulnerable, Griddy used auto-debiting to withdraw hundreds, if not thousands, of dollars from consumers’ checking accounts in a period of days. These massive daily withdrawals resulted in some Texas consumers receiving overdraft charges from their bank,” the lawsuit alleged (pdf).

A Griddy spokesperson told The Epoch Times that they are aware of the lawsuit filed by Paxton. “We do not agree with the claims alleged in the complaint, and plan to vigorously defend against it. Until then the company has no further comment,” the statement said.

This is not the first time Griddy has charged its customers exorbitant prices, the lawsuit said. In August 2019, during a heatwave in Texas, Griddy also passed on increased energy costs to its customers due to higher demands on the grid.

“As a result, consumers in 2019 were surprised and angered at charges—up to $1,200 for three days—that were highly inconsistent with the advertising that had lured them to Griddy. At the time, Griddy’s response to the harm to its consumers was dismissive,” the lawsuit alleged.

The lawsuit argues that Griddy had violated the Texas Deceptive Trade Practices Act and seeks an injunction to force the company to be more truthful about its energy service in the future.

In a statement on its website, Griddy said that Texas’s grid operator, the Electric Reliability Council of Texas (ERCOT), “took our members and have effectively shut down Griddy” as it responded to the $2.1 billion shortfall left by the cold weather crisis.

“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,” the statement said.

Texas’s brutal cold snap and frozen infrastructure brought days of power and water shortages for residents across the state. It triggered rolling blackouts across the state leaving more than 4 million Texans without power. Meanwhile, a lack of power in water treatment facilities led to a water boil advisory for around 7 million Texans.

Article updated to include a statement from Griddy.

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