Texas electricity retailer Griddy was sued for $ 1 billion for “price hikes” after outages

Texas energy retailer Griddy is the subject of a class action lawsuit filed in Houston on Monday that alleges that the company’s prices have defrauded customers after the winter storm Uri cut the power of millions across the state.

The main plaintiff in the lawsuit is Chambers County resident Lisa Khoury, whose electricity bill for the storm week totaled $ 9,340, according to the lawsuit. Khoury’s normal monthly bill averages $ 200 to $ 250.

Khoury’s complaint seeks to include all Texans who “used Griddy’s electricity services and were hit by excessive charges resulting from the storm,” according to the Houston-based law firm Potts. His lawsuit seeks more than $ 1 billion in financial relief for affected customers, as well as an injunction to prevent Griddy from charging the payment of “excessive” bills.

“At this point, we don’t know how many people can be affected, but there are probably thousands of clients who have received these outrageous bills,” said lawyer Derek Potts, who represents Khoury. “Collective action will be the most efficient and effective way for Griddy customers to come together and fight against this predatory price.”

Griddy representatives could not be reached immediately for comment.

The lawsuit alleges that Griddy violated the Texas Deceptive Business Practices Act when he “allowed his customers to pay such exorbitant amounts for electricity”.

The law states that false, deceptive or deceptive business practices “taking advantage of a disaster declared by the governor” are illegal. President Joe Biden approved a request for Federal Emergency Declaration from Governor Greg Abbott on February 14.

In the deregulated energy market in Texas, Griddy and a handful of other electricity providers charge customers variable wholesale energy fees. These plans are relatively new and have frustrated customers who are now dealing with expensive accounts during a week when power was intermittent for many.

Griddy made an unusual appeal last week when it told all 29,000 of its customers to switch to another supplier as electricity prices rose to $ 9,000 an megawatt hour. Its customers are fully exposed to real-time swings in the wholesale energy markets, resulting in electricity bills of up to $ 16,000 last week.

On Friday, the Houston-based company said it was seeking exemption from ERCOT power grid operator and state utility bill for its customers exposed to high bills.

Khoury tried to switch power providers on February 16, but was unable to switch to a new one until three days later, after a “persistent” disclosure, according to the lawsuit.

About 25% to 30% of Texans have a variable rate plan with their energy supplier, according to Houston Public Media, which cited the plan comparison website ElectricityPlans.com.

Texas blackouts and rising energy costs were terrible for customers who paid the bills, but some companies are seeing unexpected financial luck.

Australian investment bank Macquarie Group, which last year injected an undisclosed amount of investment capital into Griddy, said it expects an after-tax net profit of $ 215 million, according to Wall Street Newspaper.

Comstock Resources Inc., a natural gas company owned by billionaire Jerry Jones of Dallas, has also profited from rising prices. Comstock CFO Roland Burns said in a earnings conference call last week that “this week is like winning the top prize with some of these incredible prices”.