Leave now before you have a big bill

Some retail power companies in Texas are making an unusual appeal to their customers amid a deep freeze that has skyrocketed electricity prices: Please leave us.

Electricity supplier Griddy has told all 29,000 of its customers that they should switch to another supplier, as spot electricity prices have soared to $ 9,000 per megawatt hour. Griddy’s customers are fully exposed to real-time fluctuations in wholesale electricity markets, so those not leaving soon will face extremely high electricity bills.

“We have made the unprecedented decision to tell our customers – whom we have worked very hard to get – that they are better off in the short term with another supplier,” said Michael Fallquist, Managing Director of Griddy. “We want what’s right for our consumers, so we encourage them to leave. We believe that transparency and that honesty will bring them back ”once prices return to normal.

Texas is home to America’s most competitive electricity market. Homeowners and businesses refer to electricity providers like credit cards. In the face of such fierce competition, retail electricity providers in the region have become accustomed to offering new customers insanely low tariffs, incentives and, at least in Griddy’s case, unusual plans that allow customers to pay wholesale prices for electricity rather than fixed prices.

The ruthless nature of the business has led would-be traders to speculate on which companies may have been caught off guard this week during the most dramatic rise in electricity spot prices they have ever seen.

Not all businesses ask customers to leave. Others simply plead for them to cut back.

Pulse Power, based in The Woodlands, Texas, is offering customers a chance to win a Tesla Model 3, or free electricity for up to a year if they reduce their energy use by 10% in the next few months. days. Bulb, based in Austin, is offering $ 2 per kilowatt-hour, up to $ 200, for any energy savings customers are saving.

Griddy, however, is in a different position. Its service is straightforward – and controversial. Members pay a monthly fee of $ 9.99 and then pay the cost of spot electricity traded on the Texas power grid based on the time of day they use it. Earlier this month, that meant customers were saving money – and sometimes even getting paid – to use electricity at night. But in recent days, the cost of their electricity has dropped from about 5 to 6 cents per kilowatt hour to $ 1 or more. It was then that Fallquist knew it was time to get his clients to leave.

“I can tell you that was probably one of the toughest decisions we’ve ever made,” he says. “No one ever wants to see customers leave.”

Griddy isn’t the only one who actively encourages his clients to leave. People posted similar calls on Twitter over the holiday weekend from other Texas electricity providers offering everything from $ 100 discounts to waived cancellation fees as an incentive for change.

Customers may not even be able to change. Rizwan Nabi, chairman of the energy consultancy firm Riz Energy in Houston, said several power suppliers in Texas have told him they are not accepting new customers due to price volatility this week.

Hector Torres, an energy trader in Texas who is himself a client of Griddy, said he tried to switch departments over the long weekend but couldn’t find a business willing to take her until Wednesday when the weather is expected to warm up.

“I’ll find out in the next week if I get a huge bill,” he says.

Naureen S. Malik, Bloomberg