Texas Attorney General Ken Paxton said Griddy Energy will forgive the more than $ 29 million owed by customers on unpaid accounts.
Paxton, who sued the energy company earlier this month, said he wanted to “hold them accountable” in last month’s historic winter storm, which left millions of Texans without power during sub-zero temperatures.
As people struggled to survive the storm, Griddy debited “huge amounts of customer accounts,” Paxton said in a statement on Tuesday. He had filed a lawsuit against the company under the Texas Deceptive Trade Practices Act, but dropped the case in exchange for the company that worked in “good faith” to resolve unpaid bills.
“I have ensured that the bankruptcy plan proposed by Griddy takes an important step in offering releases to approximately 24,000 former customers who owe $ 29.1 million in unpaid electricity bills,” said the attorney general.
“Griddy and my office are involved in ongoing good faith negotiations to try to offer additional relief to Griddy customers who have already paid their storm-related energy bills.”
Griddy – which provides wholesale prices to its customers for a monthly fee of $ 9.99 – said in an online statement on Monday that it filed for Chapter 11 bankruptcy, placing the blame on the Electric Reliability Council of Texas , or ERCOT.
ERCOT manages the energy of about 90% of the state’s electrical charge, and when the winter storm hit, energy use skyrocketed. ERCOT has set prices at $ 9,000 per megawatt-hour, according to Griddy, while the seasonal average is $ 50 per megawatt-hour.
The price increase has left many Griddy customers with accounts totaling hundreds, and sometimes thousands, of dollars.
“ERCOT’s actions destroyed our business and caused financial losses for our customers,” said Griddy CEO Michael Fallquist in a statement. “ERCOT worsened the situation for our customers by continuing to set prices at $ 9,000 per megawatt-hour long after … the instructions stopped. Our customers paid 300 times more than the normal price for electricity during this period. “
The company said the bankruptcy filing will help it reorganize. ERCOT said in a statement, “We are reviewing the case, but we have no comment on the allegations.”
Paxton said earlier this month that Griddy “tricked the Texans” and hired them for wholesale energy services “which, in a time of crisis, resulted in every Texan losing thousands of dollars”.
A client, Jose Del Rio, of Haltom City, previously told NBC News that he had been charged $ 630 for his vacant two-bedroom house and owed $ 2,600. Del Rio said his lights were off, but kept the air at 60 to prevent the pipes from freezing.
His bill is usually no more than $ 150 a month and when he contacted Griddy, he said to switch providers, he said.
Another client, Royce Pierce and his wife Danielle, said that in a matter of days his account had risen to nearly $ 10,000 at his three-bedroom home. The Willow Park couple told NBC News last month that Griddy automatically debits his card and they had to close the card because the company eliminated it.
On Tuesday, Governor Greg Abbott said he asked for and accepted the resignation of Texas Public Utility Commissioner Arthur D’Andrea. D’Andrea was appointed to the post on March 3, days after ex-president DeAnn Walker left.
The commission is responsible for regulating the Texas power grid and has faced criticism for handling the February storm.
