Texas electric company hit with $1 BILLION class-action lawsuit over high energy bills

Texas wholesale electricity retailer Griddy Energy is facing a $1 billion class-action lawsuit for allegedly charging customers extremely high prices during the cold snap that left millions without power for days.

Lisa Khoury of Mont Belvieu, Chambers County, East Texas, filed the lawsuit in neighboring Harris County on Monday, Feb. 22. She claimed her electricity bill grew to a whopping $9,340 during the week of the storm. According to the lawsuit, she usually only pays between $200 to $250 for electricity per month.

Between Feb. 13 to 18, Griddy automatically took $1,200 from her bank account. Her overall bill from Feb. 1 to 19 also rose to $9,546.

Khoury said she and her husband were given these charges even though she and her husband suffered “mostly without power” in their home from Feb. 17 and 18.

Khoury claimed that she expressed her concerns regarding the withdrawals and subsequently bouncing checks, but representatives from Griddy never contacted her again. She finally placed a stop payment order on her bank account on Feb. 18.

The lawsuit claims that thousands of other Texans were given exorbitant bills, some as high as $17,000.

The lawsuit has accused Griddy of violating the Texas Deceptive Trade Practices Act, negligence, unjust enrichment and wrongly withdrawing funds from customer accounts. Khoury is asking the court for an injunction to stop the company from collecting any further bill payments.

Khoury’s attorney, Derek Potts of the Houston-based Potts Law Firm, told ABC News that Griddy has over 29,000 customers in Texas that could be affected by the lawsuit. (Related: Texans have filed multiple lawsuits against ERCOT for failing to adequately respond to the cold snap.)

“What happened financially to all of the customers of Griddy, both in terms of the exorbitant prices charged and the manner in that they were collected from peoples’ bank accounts and credit cards literally in the middle of a catastrophe while many were without power, heat and water, is clearly contrary to Texas laws in place to protect consumers,” said Potts.

Listen to this special Situation Update breaking news episode of the Health Ranger Report, a podcast by native Texan Mike Adams, the Health Ranger, as he talks about the fifteen difficult lessons he just learned from having to deal with the grid collapse in his home state.

Griddy said the class-action lawsuit is “meritless”

“We understand our customers’ frustration,” said Lauren Valdes, senior manager of social media and content at Griddy, in an email to Reuters. “But the lawsuit is meritless, and we plan to vigorously defend it.”

Residents of Texas can choose between two electricity bill options. They can sign up for a fixed plan, where the price stays at one rate regardless of market conditions, or they can get a market-rate plan, wherein the price fluctuates based on the price of electricity on the market. Griddy offers the latter option.

“We charge [customers] the wholesale, real-time price of energy, which changes every five minutes,” said the company in a statement. “You effectively pay the same price as a retail energy provider or utility.”

Griddy regularly brags about how its market-rate plan regularly ends up being cheaper for most of its customers – except for the week of the storm, when the company’s wholesale rate soared to over $9,000 per megawatt-hour due to the energy shortage and the increased demand for power.

The company has blamed the price crisis on the Public Utility Commission of Texas, the state’s main energy regulator. Griddy claims that the PUC is responsible for raising the wholesale market price of electricity, and that it did not profit from any of the raised prices.

“We intend to fight this for, and alongside, our customers for equity and accountability – to reveal why such price increases were allowed to happen as millions of Texans went without power,” wrote the company in a blog post.

Sources include:

ABC11.com

Reuters.com