A $ 1 billion class action was filed against Texas electricity retailer Griddy Energy for allegedly charging exorbitant prices during last week’s historic storm that left millions helpless in the freezing cold.
The lawsuit was filed on behalf of Chambers County resident Lisa Khoury of Harris County on Monday, who claimed her electricity bill skyrocketed to $ 9,340 the week of the storm. According to the process, their average monthly bills range from $ 200 to $ 250.
She said Griddy automatically withdrew $ 1,200 from his bank account from February 13 to 18 and his overall account from February 1 to 19 was $ 9,546. The lawsuit claims that some customers had accounts up to $ 17,000.
The complaint accused the company of “overcharging” about 29,000 customers, “knowing that consumers would be harmed”.
Khoury said she was hit by the charges while she and her husband suffered “almost always without power” at her home from February 17 to 18, when they received their parents and relatives who are in their 80s during the storm.
She claimed that despite expressing concern about the withdrawals and subsequently rejecting the checks, she never got a response from Griddy. She ended up suspending payment from her bank account on February 18.
In Texas, residents can choose between two electricity bill options: a fixed plan, where the price remains at a rate, regardless of market conditions, or a market rate plan, which can fluctuate based on the amount of used electricity and the market price of electricity. Griddy offers the last plan.
“We charge (customers) the real-time wholesale price of energy, which changes every 5 minutes. You effectively pay the same price as a retail energy supplier or utility, “Griddyy said in a statement. Griddy says on its website that this strategy turns out to be cheaper for most customers.
Last week’s storm hit the state’s power grid and led to continuous blackouts. It also caused Griddy’s wholesale rate to skyrocket to $ 9,000 per megawatt-hour due to supply shortages and rising demand for energy. Before the storm, the fee was $ 50 per megawatt-hour, the suit says.
In preparation for the storm, Griddy advised its customers to switch to another provider at a flat rate and told customers through its website that it was “seeking relief from utility regulators”. But many failed to change due to the impending climate.
The lawsuit seeks $ 1 billion in monetary relief for Khoury and “on behalf of everyone else in a similar situation.”
It also accuses Griddy of violating the Texas Deceptive Business Practices Act and calls for an injunction to prevent the company from charging payments for “excessive prices”.
Khoury’s lawyer, Derek Potts, of the Potts Law Firm, told ABC News that Griddy has 29,000 clients in Texas that the lawsuit could impact.
“What happened financially to all Griddy customers, both in terms of the exorbitant prices charged and the way they were charged from people’s bank accounts and credit cards, literally in the middle of a catastrophe, while many were without power, heating , and water, is clearly contrary to Texas laws in place to protect consumers, “said Potts.
Griddy did not immediately respond to ABC News’ request for comment, but dismissed the process “without merit” for Reuters.
Griddy blamed the Public Utility Commission for raising the price of electricity in the wholesale market during the crisis, saying the company did not profit from rising prices.
“We intend to fight for this and alongside our customers for equity and accountability – to reveal why such price increases were allowed while millions of Texans were left without power,” said Griddy in a blog.
Texas’s grid operator, the Texas Electric Reliability Council (ERCOT), is also facing lawsuits after more than 4 million customers lost power in the storm.
Top ERCOT board leaders announced on Tuesday that they will step down amid outrage over the way the corporation has dealt with the storm. Four directors, including the president and vice president, presented their resignations, which took effect on Wednesday. A candidate for a position as director of the board also said he was withdrawing his name from consideration. All five live outside Texas, which has only intensified ERCOT scrutiny.
Morgan Winsor of ABC News contributed to this report.