Texas Attorney General Ken Paxton wipes out $ 29.1 million in Griddy clients’ electricity bills

Griddy Energy customers are off the hook for their outrageous electric bills for February, according to Ken Paxton, Texas’ attorney general.

The Attorney General’s Office has 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 since the week of freezing temperatures in Texas last month.

The action Paxton took was to free Griddy’s former customers from Griddy’s bankruptcy, for which he applied in Houston on Monday. Texas will not pursue its lawsuit and investigation, and “Griddy will work in good faith to resolve these issues,” the attorney general said.

Paxton’s office also said it wanted to get some ‘relief’ from Griddy for people who had already paid their bills, some of which were thousands of dollars each.

“Griddy and my office are engaged in ongoing good faith negotiations to address additional relief for Griddy customers who have already paid their storm-related energy bills,” Paxton said in a statement.

Griddy sold electrical plans at rates linked to the visible price of power on the Texas network, and it was allowed to rise to a maximum price of $ 9,000 per megawatt hour during the winter storm, at about $ 25 or $ 30 under normal circumstances. Customers could not switch to another firm from another company fast enough and eventually got unprecedented electric bills.

Customers faced by huge bills say they are happy to get on with their lives.

Dallas resident D’Andre Upshaw still owed Griddy $ 7,100 for February after paying $ 900 via automatic payments from his checking account.

“That would be great,” he said of his state-sponsored bill. He was not employed during the storm and last week got a new job as a digital marking strategist working remotely for a business in Denver.

“I’m glad I do not have to pay the money and move on,” he said.

Upshaw stopped his bank with the automatic withdrawals he had previously set up to pay his bill when withdrawals reached $ 900 within hours.

Griddy’s electricity plan differed from the monthly fixed rate bills most residential customers in Texas have. Griddy would pre-empt $ 25 or $ 100 increases customers had previously chosen as they reached the amount of power consumption. Its customers could see their use in real time through a telephone program or computer. This enabled them to adjust their usage as they wished.

“It’s great,” said Misti Jackson of Lindale about the state’s actions. She still owes Griddy $ 1,400 on a $ 2,500 February account.

‘I was not opposed to paying, but it was excessive. It needed some kind of reasonable cap, ‘she said, adding that she was actually’ sorry to see Griddy go. ‘

Jackson now has a fixed rate plan with Reliant costing more than her Griddy bills before the winter storm.

‘We never had a problem [with Griddy] before, ”she said. Other customers also said they like Griddy’s format because they could monitor their energy consumption and help control the price.

Griddy said in his bankruptcy file that he “had no customers and little or no incoming payments” for outstanding accounts after the ERCOT network company announced on February 26 that he was in default and a large exodus of Griddy’s customers forced other suppliers.

Before the storm, Griddy said, it was a thriving business with more than 29,000 customers saving more than $ 17 million. on their electric bills since 2017.

Griddy did not benefit from the winter storm crisis, CEO Michael Fallquist said. ‘ERCOT exacerbated a bad situation for our customers by continuing to set prices at $ 9,000 per megawatt-hour long after the load shedding instructions ceased. During this period, our customers paid 300 times more than the normal price for electricity. ”

Wholesale electricity prices were set at $ 9,000 per megawatt-hour for nearly 88 hours during the February energy crisis, including extensive power outages for 4 million Texans.

Griddy owed $ 29 million and ERCOT sent him a $ 29 million bill. At the time, the company said it was “left in a position where it had no choice but to file this Chapter 11.”

Filing for bankruptcy is a liquidation, not a reorganization. Any assets would be used to pay Griddy’s creditors “while balancing the desire to relieve its former customers of the uncertainty of being subject to collection actions due to the extreme wholesale prices for electricity.”

Griddy works out of a small office building in Houston with 30 employees. It fired half of its staff after ERCOT closed it.

Griddy listed assets of more than $ 1 million and less than $ 10 million in his bankruptcy filing. Its biggest creditor is ERCOT for the $ 29 million that wipes out the attorney general’s agreement. Other significant debts include $ 1.23 million in transportation costs to CenterPoint Energy and $ 1.16 million to Oncor.

Twitter: @MariaHalkias