Lawsuit seeks $ 1 billion from Griddy for pricing


Ryan W. Miller

| USA TODAY

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A Texas woman filed a class action lawsuit seeking $ 1 billion in relief for customers of electricity retailer Griddy, which the lawsuit illegally engaged in price increases amid widespread power outages across the state last week. pass.

Lisa Khoury, who filed the lawsuit on behalf of all Griddy customers who were charged the high prices, faced an electric bill of $ 9,546 from February 1 to February 19 as a result of the massive increase in prices. of wholesale electricity in Texas amid a severe winter. storm.

Griddy is a service that allows customers to pay variable rates for their electricity, charging what would be charged to wholesale customers or “exactly the price we buy the electricity at,” the company says on its website, rather than a price. permanent.

But last week, wholesale prices skyrocketed amid outages that affected millions of Texans, rising to $ 9,000 per megawatt hour compared to the typical rate of $ 50 per megawatt hour, the lawsuit says.

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

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Griddy did not immediately respond to USA TODAY’s request for comment on the litigation, but on an FAQ page about the storm on its website, the company denies the price hike allegations.

The lawsuit seeks to prevent Griddy from billing and collecting overpriced charges during the storm and forgiveness of late or unpaid payments, as well as monetary relief.

Texas Governor Greg Abbott said Wednesday that the state was investigating providers whose prices soared, and the Texas Public Utilities Commission issued an order Sunday preventing providers until further notice from disconnecting customers who they have not paid their bills.

Many customers use Griddy with the expectation of paying less, based on demand. On its website, in a video explaining how the service works, Griddy advertises itself as a company that saves consumers money by not marking prices like “all those other guys do, you know the ones who’ve been taking advantage of you, your parents and your neighbors for the last 20 years. “

While using the service is “a gamble,” the lawsuit says, “Griddy knew it was overcharging consumers, that consumers would be harmed, and Griddy would be unfairly wealthy by withholding customer payments.”

Based on the lawsuit, Khoury’s typical monthly electric bill is $ 200 to $ 250, allowing the service to charge your bank account every time it reaches $ 150. From February 15 to February 19, Khoury had $ 1,200 automatically withdrawn from his bank account, the lawsuit says. He put a stop payment on his account, but still owed Griddy more than $ 8,000, according to court documents.

‘Massive failure’: Why millions of people in Texas were without power

For two days last week, Khoury was largely without power, having welcomed his parents and in-laws, who are in their 80s, according to the lawsuit.

Before the high prices were charged, Griddy sent an email to its customers on February 14 warning them that they should find a flat-rate provider amid the possibility of prices rising, but the lawsuit says many could not find one because providers weren’t accepting new customers during the storm.

Khoury tried to change providers on February 16, but was unable to find a new provider until February 19.

The suit says Griddy took advantage of its customers “to a grossly unfair degree” and pointed to the fact that Griddy suggested that customers find a new supplier as evidence that it knew prices would be grossly inflated.

It says Griddy’s actions violated the Texas Deceptive Business Practices Act, which prevents a company from charging an “exorbitant or excess price” on goods needed during a disaster.

Abbott and President Joe Biden declared emergencies in the state due to the winter storm. Historically low temperatures and unusual snow and ice removed large supplies of electricity from the Texas power grid last week. The storm and power outages have been blamed for numerous deaths.

In Texas, which largely has its own electrical grid, the Texas Electrical Reliability Council manages the flow of electricity for approximately 26 million people, or 90% of the state.

‘An electric island’: Texas has evaded federal regulation for years by having its own electrical grid.

According to Griddy, wholesale prices skyrocketed last week because the Texas Public Utility Commission “cited its ‘full authority on ERCOT’ to order ERCOT to set prices at $ 9 / kWh.”

Abbot and Texas lawmakers have called for an investigation into the state’s power grid problems. Prosecutors have said they will investigate any criminal offense and consumers have filed other lawsuits.

A federal report in 2011 said that calls for more winter readiness from Texas electric generators have not been fulfilled for a long time.

At least six members of the ERCOT board resigned this week. Abbott welcomed their resignations, but said in a television appearance Wednesday that “more must be done.”

Contributing: The Associated Press

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