Texas Attorney General Sues Griddy, Saying Electricity Provider Misled Customers

[Leroy N. Soetoro]

https://www.npr.org/2021/03/01/972515561/texas-attorney-general-sues-
griddy-saying-electricity-provider-misled-customers

Texas Attorney General Ken Paxton is suing Griddy, saying the electricity
provider passed along massive increases during winter storms, leaving some
customers to face up to $5,000 in power bills. Paxton's lawsuit says
Griddy deceived customers when it promised low "wholesale" energy prices.

The state says it received more than 400 complaints about Griddy in less
than two weeks.

"I do not have the money to pay this bill. We need help," one woman said
in her complaint, according to the lawsuit. The woman, who lives in
Houston, said Griddy charged $4,677 to her credit card for one week of
electricity in an 800-square-foot apartment.

Customers say they were blindsided by the surge pricing, particularly when
Griddy automatically charged their checking accounts or credit cards. In
just days, they say, hundreds or even thousands of dollars vanished from
their bank accounts. For many, that set off a cascade of overdraft fees
and missed payments for other bills.

"They extracted money out of my bank account," a man in Fort Worth said of
Griddy. "$500 yesterday alone and a [total of] over $950 for February."

Griddy warned its customers of potential price spikes in mid-February, as
a prolonged wave of freezing temperatures began to hit Texas. The company
even urged people to switch to another provider. But as the state's
electrical grid faltered, energy companies, which offer more stable
pricing, said new customers would have to wait at least a week before
starting the process of applying for a new account.

"During the February freeze, Texas power companies failed to withstand the
winter storm and left millions of Texans without power and heat during
lethal, record-low temperatures across the state," Paxton's office says.
It alleges that Griddy compounded the disaster by passing skyrocketing
energy costs directly to customers.

The lawsuit is only part of the fallout for electricity companies in
Texas. Earlier Monday, Brazos Electric Power Cooperative, the largest such
entity in the state, filed for bankruptcy protection, citing a huge bill
from the state's electricity grid operator.

Griddy customers pay a monthly $9.99 fee to the company, which then
charges them for power based on the going rate in Texas' uniquely volatile
and competitive electricity market.

But the state's lawsuit accuses Griddy of downplaying the risk of
fluctuating energy prices. And it cites a Better Business Bureau alert
from 2019, which said Griddy should not promise "wholesale" prices to
consumers because it doesn't directly own or control a facility that
primarily sells to retailers.

A Griddy customer who lives in Arlington, Texas, said in her complaint
that the company took more than $1,000 out of her bank account — a
shocking rise from the usual range of $49 to $61 she paid each month. The
woman, who relies on Social Security checks in her retirement, said Griddy
did not respond to her request for leniency and a delay in her payment due
date to allow her to safely visit her bank.

"As Texans struggled to survive this winter storm, Griddy made the
suffering even worse as it debited outrageous amounts each day," Paxton
said via Twitter.

The state's lawsuit seeks an injunction to force Griddy to change how it
operates, including ceasing "all collection efforts for energy use from
February 12 through February 21, 2021."

The suit also seeks more than $250,000 in financial relief for Griddy's
customers. It was filed in Harris County, where Griddy has an office in
Houston.

Because of the dangerous failures of Texas' electrical system, Gov. Greg
Abbott has called for an investigation into the group that manages the
state power grid.

The storms and intense cold did not inflict suffering on every energy
company in Texas — in fact, some of them profited handsomely during the
crisis, particularly if they produce, own or transport natural gas or
electricity.

"We were able to get super premium prices," an executive at natural gas
company Comstock Resources told investors on a Feb. 17 phone call,
according to The Washington Post. The cold snap, he added, was like
"hitting the jackpot."



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