Texas electricity company Griddy declares bankruptcy as fallout from winter storm continues

Texas electricity supplier Griddy Energy accused of billing customers Thousands of dollars during the winter storm Uri, said Monday to have filed for bankruptcy.

Griddy was a “thriving business with over 29,000 customers” before the winter storm hit, CEO Michael Fallquist said in a statement. The storm with record temperatures triggered a week-long freeze and left millions of people without power across Texas, causing property and economic damage estimated at $ 195 billion to $ 295 billion.

Griddy is the third Texas energy supplier to file for bankruptcy since the storm. Brazos Electric Power Cooperative, which has served over 1.5 million Texans, filed for chapter 11 after racking up $ 2.1 billion in bills. Just Energy Group also filed for bankruptcy protection earlier this month.

Fallquist blamed the Texas Power Grid Operator for Griddy seeking Chapter 11 protection. The Electric Reliability Council of Texas, known as ERCOT, “made things worse for our customers by continuing to set prices at $ 9,000 per megawatt hour, ”he said.

“ERCOT’s actions have destroyed our business and caused financial damage to our customers,” Fallquist said.

Griddy is a defendant in a class action lawsuit filed last month by customers who accused the company of price fraud. A client, Lisa Khoury, said Griddy billed her $ 9,546 between Feb.1 and Feb.19. That amount is 40 times more than her usual bill, she said in court documents.

A Dallas resident told CNN his bill was $ 7,000, while another Texan reported a tab of $ 6,225. Khoury and others in the group are asking for $ 1 billion in monetary relief. Extremely high bills prompted the Texas attorney general’s office earlier this month to sue Griddy, alleging “false, deceptive and deceptive advertising and marketing practices.”

Griddy’s executives argue that ERCOT is to blame for the excessive utility bills. During the storm, Griddy asked customers to switch to other suppliers in order to avoid the high prices. However, many vendors were unable to add new customers during the freeze.

Griddy said in a statement he did not take advantage of the February blackout and does not control changes in energy prices. Griddy said he only pocketed his usual monthly fee of $ 9.99 from customers when electricity prices rose during the storm.

Governor of Texas Greg Abbott also blamed ERCOT for the debacle. Four members of the ERCOT board resigned last month following storm damage. ERCOT supplies Texas 90% of its power.

Griddy said his bankruptcy reorganization plan frees customers from their unpaid electric bills. The reorganization plan, which has not yet been made public, must be approved by a bankruptcy judge in Houston. The company lists its debt between $ 10 million and $ 50 million, according to court documents.