Texas electricity supplier Griddy Energy accused of charging customers thousands of dollars during the winter storm Uri, said Monday that it filed for bankruptcy.
Griddy was a “thriving business with more than 29,000 customers” before the winter storm hit, CEO Michael Fallquist said in a statement. The record low temperature storm caused a week-long freeze and left millions of people without power across Texas, causing about $ 195 billion to $ 295 billion in property and economic damage.
Griddy is the third energy supplier in Texas to file for bankruptcy since the storm. Electric Cooperative Brazos, which served more than 1.5 million Texans, filed for Chapter 11 after accumulating $ 2.1 billion in accounts. Just Energy Group also filed for bankruptcy protection earlier this month.
Fallquist blamed the Texas power grid operator for Griddy seeking protection from Chapter 11. The Texas Electric Reliability Council, known as ERCOT, “worsened the situation for our customers by continuing to set prices at $ 9,000 per megawatt-hour “, he said.
“ERCOT’s actions destroyed our business and caused financial losses for our customers,” said Fallquist.
Griddy is a defendant in a class action lawsuit filed last month by customers who accused the company of price fraud. A customer, Lisa Khoury, said Griddy charged her $ 9,546 between February 1 and 19. That figure is 40 times more than her normal account, she said in court documents.
A Dallas resident told CNN that his account was $ 7,000, while another Texan reported a $ 6,225 account. Khoury and other members of the class are seeking $ 1 billion in monetary relief. Very tall projects prompted the Texas Attorney General’s office earlier this month to sue Griddy, alleging “false, misleading and misleading advertising and marketing practices”.
Griddy executives say ERCOT is to blame for the excess of utility bills. During the storm, Griddy asked customers to switch to other suppliers in an attempt to avoid high prices. However, many providers were unable to add new customers during the deep freeze.
Griddy said in a statement that it did not profit from the February blackout and does not control changes in energy prices. Griddy said it only pocketed its usual $ 9.99 monthly fee from customers when electricity prices rose during the storm.
Texas Governor Greg Abbott also blamed ERCOT for disaster. Four members of the ERCOT board resigned last month after the storm’s damage. ERCOT provides Texas with 90% of its power.
Griddy said its judicial reorganization plan frees customers from their unpaid electricity bills. The reorganization plan, which has not yet been released, must be approved by a bankruptcy judge in Houston. The company lists its debt between $ 10 million and $ 50 million, according to court documents.