Texas power supplier Griddy filed for bankruptcy on Monday and blamed the administration of the state’s power grid for destroying its businesses.
In a statement on its website, the company argued that actions taken by the Texas Electric Reliability Council (ERCOT) to price energy at extremely high levels during a severe winter storm last month hurt its customers and the company itself.
“Our bankruptcy plan, if confirmed, offers relief to our former customers who were unable to pay their electricity bills due to unprecedented prices. ERCOT worsened the situation for our customers by continuing to set prices at $ 9,000 per megawatt- hour long after signing the load reduction instructions were interrupted. Our customers paid 300 times more than the normal price for electricity during this period, “said CEO Michael Fallquist.
The authorities in Griddy and Texas shifted the blame on who was responsible for the price increases that led many Texans to face shockingly high energy bills in the days after the deadly storm. Griddy, who allows customers to choose between multiple plans, recommended that users switch to flat rate plans before the storm arrives, and many who have not seen themselves experiencing extremely high rates of energy use during the storm, both from the state’s power grid failed.
A Griddy co-founder, Gregory Craig, added in the company’s statement that its pricing plans would not have resulted in high energy bills if “the grid had not failed and regulators had not intervened”.
The company is accused of price fraud in a class action lawsuit, and the state attorney general claimed in a lawsuit that Griddy violated the Texas Deceptive Business Practices Act.
“While the Texans struggled to survive this winter storm, Griddy made the suffering even worse, as he charged exorbitant amounts each day. As the first action brought by my office to confront the scandalous bankruptcy of energy companies, I will hold Griddy responsible for the escalation of this winter storm disaster, “said State Attorney General Ken Paxton (R).
Dozens of Texans and others in neighboring states died as a result of freezing conditions last month, while millions were left without power for days. The authorities blamed the frozen machines in natural gas plants, which supply much of the state’s energy, for the interruptions.