Wholesale retail electricity supplier Griddy Electric missed the necessary payments to the Electric Reliability Council of Texas (ERCOT), resulting in Griddy losing its right to operate in the state, while some 10,000 customers were transferred to other services.
“It was not a choice we made,” Griddy defended himself in a statement posted on Twitter on Friday.
According to a statement to the market, Griddy’s market share was officially revoked on the same day under the ERCOT protocols due to a “payment breach”.
The shift comes after Texans suffered long days of power outages, caused by an exceptionally severe winter, with residents facing devastating electrical charges worth thousands of dollars.
Griddy was among the suppliers who sent out huge bills, shocking customers.
“We have always been transparent and customer-centric at every step,” said Griddy’s statement. “We wanted to continue to fight for our members to receive relief and that hasn’t changed.”
Griddy explained why the rates were so high in a February 18 blog post, stating that the Texas Public Utility Commission (PUCT) demanded that ERCOT raise prices to $ 9 / kWh to reflect the shortage of supply during the storm – but PUCT kept those prices high even after energy started calling Texans.
“As of today, 99% of the houses have their energy restored and the available generation was well above the 1,000 MW cushion”, said the blog post. “Still, PUCT left the directive in place and continued to force prices at $ 9 / kWh, approximately 300 times higher than the normal wholesale price.”
Griddy charges its customers $ 10 a month. However, some customers were experiencing costs close to $ 10,000 for the week of the storm, according to The Texas Tribune.
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Griddy’s exclusion from the market is the latest in what is becoming a massive financial meltdown in Texas, caused by the severe storm.
ERCOT announced in another statement to the market on Friday that, in general, Texas electricity providers failed to make $ 2.12 billion in required payments. Electricity providers normally pay ERCOT, which operates the state’s electricity grid, according to the Tribune. More payments were due than usual this time because of the increased cost for each hour of electricity spurred on by the winter storm.
ERCOT has now decided to crack down on its unpaid bills, leading to Griddy’s shutdown in the Lone Star State.
“On the same day that ERCOT announced that it had a deficit of $ 2.1 billion, it decided to take this action against just one company that represents a small fraction of the market and that deficit,” said Griddy in his statement on Friday .
ERCOT said on Friday that it would use $ 800 million from a revenue account to cover part of the deficit, according to Wall Street Newspaper, leaving a $ 1.32 billion gap that it will need to make up for.
On Wednesday, ERCOT apologized to Texans for severe blackouts amid growing lawsuits from frustrated residents.
Newsweek contacted PUCT, ERCOT and Griddy for comment.