Texas Attorney General Ken Paxton wipes out Griddy’s customers’ electricity bills for a total of $ 29.1 million

Griddy Energy customers are free of their outrageous electricity bills for February, according to Texas Attorney General Ken Paxton.

The attorney general’s office sued Griddy under the Texas Deceptive Trade Practices Act on behalf of 24,000 customers who accumulated $ 29.1 million in unpaid electricity bills in Texas’s freezing week last month.

The action Paxton took was to free former Griddy customers from the Griddy bankruptcy, which was filed on Monday in Houston. Texas will not move forward with its state lawsuit and investigation, and “Griddy will work with him in good faith to resolve these issues,” said the attorney general.

Paxton’s office also said it is working with Griddy to get some “relief” for people who have already paid their bills, some of which cost several thousand dollars each.

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

Griddy sold electricity plans at rates tied to the spot price of energy on the Texas grid, and this was allowed at a maximum price of $ 9,000 per megawatt-hour during the winter storm, about $ 25 or US $ 30 under normal conditions. Customers were unable to switch to another company’s fixed plan quickly enough and ended up with unprecedented electricity bills.

Customers facing huge bills said they were happy to move on with their lives.

Dallas resident DeAndré Upshaw still owed Griddy $ 7,100 in February after he paid $ 900 through automatic payments from his checking account.

“That would be great,” he said of his bill being dealt with by the state. He was not employed during the storm and, since last week, has landed a new job as a digital tagging strategist, working remotely for a company in Denver.

“I’m happy that I don’t have to pay the money … and move on,” he said.

Upshaw had his bank stop the automatic withdrawals he had set up to pay his bill when withdrawals reached $ 900 in a few hours.

Griddy’s electricity plan was different from the monthly flat-rate bills that most residential customers have in Texas. Griddy would take out predefined increments of $ 25 or $ 100 that customers had previously selected as they reached that amount of electricity usage. Your customers could see their use in real time through a phone or computer application. This allowed them to adjust their usage, if they wanted to.

“This is incredible,” said Misti Jackson of Lindale of the state’s action. She still owed Griddy $ 1,400 on a February $ 2,500 account.

“I was not opposed to paying, but that was exorbitant. I needed some kind of reasonable limit, ”she said, adding that, in fact,“ I was sorry to see Griddy leave ”.

Jackson is now on a flat-rate plan with Reliant that costs more than his Griddy bills before the winter storm.

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

In his bankruptcy filing, Griddy said he “ran out of customers and with little or no incoming payments” to outstanding accounts after Texas network operator ERCOT notified on February 26 that it was in default and forced a mass exodus of customers from Griddy to other providers.

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

Griddy did not profit from the winter storm crisis, said CEO Michael Fallquist.

“ERCOT made the situation worse for our customers by continuing to set prices at $ 9,000 per megawatt-hour long after load reduction instructions were interrupted,” he said. “Our customers paid 300 times more than the normal price for electricity during this period.”

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

Griddy had $ 29 million in debt and ERCOT sent in a $ 29 million account. At that point, the company said that “it was left in a position where it had no choice but to file this Chapter 11.”

Your bankruptcy filing is a liquidation, not a reorganization. Any assets would be used to pay Griddy’s creditors “while balancing the desire to give its former customers relief from the uncertainty of being subject to collection actions as a result of extreme wholesale electricity prices.”

Griddy operates in a small office building in Houston with 30 employees. She let half of her team go after ERCOT closed it.

Griddy listed assets of more than $ 1 million and less than $ 10 million in its bankruptcy filing. Its biggest creditor is ERCOT, for the $ 29 million that the attorney general’s deal eliminated. Other significant debts include $ 1.23 million in transportation expenses for CenterPoint Energy and $ 1.16 million for Oncor.

Twitter: @MariaHalkias