[ad_1]
A Texas woman who received an electricity bill of more than $ 9,000 this month is suing her electricity supplier for price abuses. This is the first such trial after a heartbreaking week of snow and below freezing temperatures that spiked energy prices for thousands of customers across the state and blackouts for millions others.
Experts in consumer law say more such lawsuits are likely to occur. But Texas’ deregulated electricity market, with what’s known as variable rate pricing, means many of these claimants will have an uphill battle to get their bills paid.
Lisa Khoury, a resident of Chambers County in Houston, filed a class action lawsuit on Monday against her electricity supplier, Griddy Energy. According to the lawsuit, Khoury was billed $ 9,546 between February 1 and 19, an amount hundreds of times higher than her typical bill range of $ 200 to $ 250.
Khoury said Griddy withdrew $ 1,200 from her bank account through an automatic payment system before stopping payment through her bank, but that she still owed more than $ 8,000 for intermittent feed, according to the complaint. Khoury and other members of the prosecution group are asking for $ 1 billion in monetary relief.
“Griddy blamed Khoury in the midst of a disaster. She and her husband were mostly without electricity at their home from Wednesday February 17, 2021 until Thursday February 18, 2021. At the same time, Khoury welcomed her parents laws, who are in their 80 years, during the storm. Even then, she continued to minimize all energy consumption because of the high prices, “the complaint read.
Khoury’s attorney, Derek Potts, national managing partner of the law firm Potts, said Griddy’s billing violates Texas consumer protection laws – and that thousands of electricity users are probably affected.
Unpredictable price
Griddy said the lawsuit was “without merit” in a statement given to the Dallas Morning News. The electricity supplier did not immediately respond to a request for comment from CBS News. On its website, the company says it is not taking advantage of high electricity prices and has blamed the Texas Utilities Commission for the astronomical increases over the past weekend.
“You are effectively paying the same price as an energy supplier or a retail utility,” Griddy says on his site, noting that these prices change every five minutes.
“The PUCT changed the rules on Monday” when it ordered the Texas grid provider to allow astronomically high electricity prices, Griddy said, adding that he was “seeking relief” from ERCOT for affected customers .
Plans like Griddy’s are a relatively new feature in the largely deregulated Texas energy market. Most Texans, according to Utilities Commission spokesperson Andrew Barlow, use fixed-rate plans in which users pay a predetermined amount for each bit of electricity they use. In variable plans like the one offered by Griddy, consumers pay wholesale prices, which means their bills are low in times of low demand, but can quickly increase during times of crisis. Some experts in the electrical industry have called these plans predatory.
Variable rate utility contracts have been compared by some energy experts to variable rate mortgages that were popular during the housing boom of the early 2000s. Under these mortgages, a homeowner could get a rate of 10%. slightly lower interest, but he was forced to raise interest rate hikes later.
“It seems consumers have been drawn to the promise of slightly cheaper electricity, the fine print being, ‘Oh, if there’s a grid emergency, you could get a $ 5,000 bill,’ said Costa Samaras, associate professor at Carnegie Mellon and assistant analyst at RAND. “It may be legal, but is it true?”
Misled “to an exceedingly unfair degree”
“There is a decent claim that these contracts are unacceptable,” said Richard Alderman, director of the Consumer Law Center at the University of Houston and professor emeritus at the university.
Texas law protects consumers who are exploited “to an exceedingly unfair degree,” Alderman said, adding that electricity price spikes of several thousand dollars should be viewed as grossly unfair.
“Would someone in their right mind sign a contract knowing that this would happen? In my mind, no,” he said.
However, these lawsuits face several obstacles. Many contracts force consumers to resort to private arbitration, a jury-less system that tends to favor businesses. Even when a consumer goes to court, the judge is often not on his side.
“The courts in Texas are generally very conservative, and they often tell consumers, ‘You signed this contract, you should have read it and understood what it said,’” noted Alderman.
For now, Texas Gov. Greg Abbott has called the utility bills an “absolute priority” for legislators. Utilities are prohibited from disconnecting customers for non-payment and have been asked to suspend billing.
Energy suppliers caught off guard
Residents weren’t the only ones facing one thousand dollar electricity bills. Some municipalities and alternative electricity providers were also caught off guard. The town of Denton spent $ 207 million on electricity during the outages, close to its annual electricity budget. Electricity supplier Just Energy said it lost $ 250 million in the episode and would go bankrupt.
When several power sources went down over the weekend, the commission and Texas grid operator ERCOT allowed wholesale energy prices to rise to 300 times their usual level in order to encourage more electricity to come onto the grid. At the time, Griddy made the unprecedented decision to ask its customers to switch to other suppliers. However, many suppliers were unable to recruit new customers during the freeze. People like Lisa Khoury have said they have to wait.
According to Bloomberg, nearly a dozen domain names have been registered potentially seeking clients for class actions, including TexasPowerLawsuit.com, TexasPowerFailureLawsuit.org, and ClassActionTexasPower.org.
Consumer advocates are hoping federal funds or the Texas legislature can help customers struggling with astronomical bills – and avoid spikes like these in the future.
“The money has to come from somewhere,” Samaras said. “The question is whether Texas is bailing out these customers or are there regulations?”
[ad_2]
Source link