Texas electricity retailer Griddy sued for $ 1 billion for ‘price abuse’ after blackouts

Texas electricity retailer Griddy is the target of a class action lawsuit filed in Houston on Monday that alleges the firm’s price abused customers after winter storm Uri cut power to millions of people in the city. ‘State.

The main plaintiff in the lawsuit is Lisa Khoury, a resident of Chambers County, whose electricity bill for the week of the storm was $ 9,340, according to the lawsuit. Khoury’s normal monthly bill averages $ 200 to $ 250.

Khoury’s claim is intended to include all Texans who “used Griddy’s electric utilities and were hit by excessive loads resulting from the storm,” according to the Houston-based law firm Potts. His lawsuit seeks more than $ 1 billion in financial redress for affected customers as well as an injunction to prevent Griddy from collecting “excessive” bill payments.

“At this point, we don’t know how many people could be affected, but there are probably thousands of clients who have received these outrageous bills,” said attorney Derek Potts, who represents Khoury. “A class action lawsuit will be the most effective and efficient way for Griddy’s clients to come together and fight these predatory prices.”

In a statement provided to The morning news from Dallas On Tuesday, Griddy called the lawsuit “without merit”.

“We understand the frustration of our customers. However, Griddy passes the wholesale price of electricity to customers without mark-up. The prices invoiced are the direct result of the non-market prices ordered by the [Public Utility Commission of Texas] Last week. The lawsuit is without merit and we plan to defend it vigorously, ”Griddy spokeswoman Lauren Valdes said in the statement.

The lawsuit alleges that Griddy violated Texas Deceptive Marketing Practices Act by “allowing their customers to be charged such exorbitant amounts for electricity.”

The law declares that false, deceptive or deceptive business practices “profiting from a disaster declared by the governor” are illegal. On February 14, President Joe Biden approved a request for a federal declaration of emergency from Governor Greg Abbott.

In Texas’ deregulated energy market, Griddy and a handful of other electricity providers charge customers varying wholesale rates for electricity. These plans are relatively new and have frustrated customers who now have expensive bills for a week where electricity was intermittent for many.

Griddy made an unusual plea last week, telling all 29,000 of his customers to switch to another provider as spot electricity prices soared to $ 9,000 per megawatt hour. Its customers are fully exposed to real-time fluctuations in wholesale electricity markets, resulting in electricity bills of up to $ 16,000 last week.

The Houston-based company said on Friday it was seeking relief from the power grid operator ERCOT and the state utility board for its customers with high bills.

Khoury attempted to change electricity supplier on February 16, but was unable to change until three days later after “persistent” awareness, according to the lawsuit.

About 25% to 30% of Texans have a variable rate plan with their energy provider, according to Houston Public Media, which cited the plan comparison website ElectricityPlans.com.

The power outages in Texas and the rising cost of electricity have been horrific for customers who have to pay their bills, but some companies are seeing a financial boon.

Australian investment banking firm Macquarie Group, which injected an undisclosed amount of private equity into Griddy last year, said it expects net after-tax profits of $ 215 million, according to The Wall Street Journal.

Comstock Resources Inc., the natural gas company of Dallas billionaire Jerry Jones, also benefited from a price spike. Comstock CFO Roland Burns said on an earnings call last week that “this week is like hitting the jackpot with some of these amazing prizes.