ERCOT terminates power retailer Griddy’s ability to operate in Texas

UPDATED at 4:18 PM with additional details.

The Texas Electric Reliability Council has revoked power retailer Griddy’s ability to operate on its power grid.

The Houston-based company, which offers plans tied to the wholesale price of electricity, has come under fire after customers faced sky-high bills during this month’s deadly cold snap that hit led to widespread blackouts across Texas.

ERCOT, which manages the state’s electricity grid, blocked Griddy from accessing the state’s electricity market due to non-payment. ERCOT’s order showed the company had 10,127 customers on Friday, which is significantly lower than the 29,000 Griddys cited before the weather crisis.

Griddy’s customers are automatically switched to TXU or Reliant, the two largest electricity providers in Texas. Both have been assigned by the Public Utility Commission of Texas to take on clients after another supplier has gone out of business or, in this case, been kicked out.

Griddy said in a prepared statement that ERCOT had effectively shut it down and the agency “has decided to take this action against a single company which represents a tiny fraction of the market.”

The company said it wanted to continue fighting for financial assistance for its members. Last week he said he was asking ERCOT and PUC for help. The company was absent from hearings Thursday and Friday in the Texas Legislature, where it and dozens of companies were invited to testify.

ERCOT has set a ceiling price of $ 9,000 per megawatt hour to encourage electricity suppliers to increase their generation capacity. Prices peaked during last week’s storm – and stayed there for hours, meaning Griddy’s customers were paying $ 9 for a kilowatt hour which typically only costs pennies.

Griddy took the unusual step before the storm of telling customers to switch to other suppliers as they risked facing sky-high bills. But many didn’t change, or couldn’t, and ended up with thousands of dollars for just a few days of power.

A class action lawsuit against Griddy was filed in Houston on Monday seeking more than $ 1 billion in damages. Griddy called this lawsuit “without merit”.

ERCOT and the PUC have not addressed what happens to unpaid bills in the thousands of dollars accumulated during the five days when wholesale market prices have skyrocketed.

Over the past few days, Griddy has turned around and told customers they can’t make the switch until they’ve put in place a payment plan for their storm bills. The plan was for five equal monthly payments, plus additional charges.

“You are also required to agree to a replacement hold being placed on your meter, which means you cannot switch to another provider until your total outstanding balance has been paid,” says Griddy.

Griddy had received full or partial payments from clients before they were ordered Friday night to stop doing business in Texas.

Instead of a monthly bill with a due date, Griddy’s customers have linked a bank account or credit card for pre-approved periodic withdrawals in increments of $ 25 or more when electricity charges hit that. level. During the freeze, customers watched charges go up on their mobile bank accounts and on the Griddy app in real time.

Jessica Phillips of Dallas said she was successful in getting her bank to stop payments to Griddy, but about $ 800 on a $ 2,399 bill for her 850 square foot apartment in Dallas during the five days had been paid.

“I turned my thermostat down to 50 degrees so the hoses didn’t break, unplugged everything and left,” Phillips said. “The fee for one of these days was $ 350.

Phillips said she has been a Griddy client since October and her bills ranged from $ 40 in November to $ 99 in January. On Tuesday, she was finally able to switch to a Direct Energy plan with a fixed rate of 11 cents.

“When Griddy told us we couldn’t change without paying first, it must be against the law,” Phillips said.

The last time ERCOT shut down an electricity supplier was in 2018. Dallas-based Breeze Energy, which was selling wind power plans, had defaulted on its payments.