A Texas woman filed a class action lawsuit seeking $ 1 billion in relief for customers of electricity trader Griddy.
Lisa Khoury, who filed the lawsuit on behalf of all of the Griddy customers billed for the high prices, faced a $ 9,546 utility bill from Feb.1-19 because of wholesale power prices in Texas in a severe winter had risen massively storm.
Griddy is a service that allows customers to pay variable prices for their electricity, charging what wholesale customers are charged, or “the exact price we buy electricity at,” the company says on its website instead of a fixed price.
But last week, in the midst of outages affecting millions of Texans, wholesale prices rose to $ 9,000 per megawatt hour, compared to the typical rate of $ 50 per megawatt hour, the lawsuit said.
“At this point in time, we don’t yet know how many people might be affected, but there are likely thousands of customers who have received those outrageous bills,” Derek Potts, a lawyer representing Khoury, said in a statement. “A class action lawsuit will be the most efficient and effective way for Griddy’s customers to come together and fight this predatory pricing.”
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Griddy didn’t immediately respond to USA TODAY’s request for comment on the litigation, but the company denies price cut allegations on a Storm FAQ page on its website.
The lawsuit is designed to prevent Griddy from billing and collecting payments for the overpriced fees and awarding late or unpaid payments and cash relief during the storm.
Texas governor Greg Abbott said Wednesday the state is investigating vendors whose prices have increased and the Texas Public Utilities Commission issued an order on Sunday preventing vendors from disconnecting customers who had their bills until further notice have not paid.
Many customers use Griddy with the expectation of paying less, the lawsuit states. On their website, in a video explaining how the service works, Griddy introduces itself as a company that saves consumers money by not pricing like “all the other guys, you know the ones you, yours Parents and their parents have been chasing “tagged neighbors” for 20 years. “
While using the service is “a gamble,” the lawsuit stated, “Griddy knew it was overwhelming for consumers, that harm was done to consumers, and that Griddy was wrongly enriched by keeping customers paying.”
According to the lawsuit, Khoury’s typical monthly utility bill is $ 200-250, which allows the service to charge her bank account every time it hits $ 150. From February 15 to 19, Khoury automatically withdrew $ 1,200 from her bank account, the lawsuit said. She put a payment freeze on her account, but still owed Griddy more than $ 8,000, according to court records.
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Last week, Khoury was largely without electricity for two days and she had taken in her parents and in-laws, who are in their eighties, according to court proceedings.
Before the high prices were billed, Griddy emailed his customers on Feb. 14, warning them to find a fixed rate provider as prices could potentially go up. However, the lawsuit says many couldn’t find one because vendors weren’t accepting new customers during the storm.
Khoury tried to switch providers on February 16, but was not able to find a new provider until February 19.
The lawsuit states that Griddy took advantage of its customers “in a grossly unfair manner,” pointing out that Griddy had suggested customers find a new provider to prove that prices were being grossly inflated.
It is said that Griddy’s actions violated the Texas Deceptive Trade Practices Act, which prevents a company from charging “exorbitant or inflated prices” for necessary goods during a disaster.
Abbott and President Joe Biden both declared emergencies in the state because of the winter storm. Historically low temperatures and unusual snow and ice threw large supplies of electricity off the Texas power grid last week. The storm and blackouts were blamed for numerous deaths.
In Texas, most of which has its own electrical system, the Texas Electric Reliability Council manages the flow of electricity for approximately 26 million people, or 90% of the state.
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According to Griddy, wholesale prices rose last week because the Texas Public Utility Commission “cited its” full authority over ERCOT “to instruct that ERCOT set prices at $ 9 / kWh.”
Texas Abbot and lawmakers have called for investigations into what went wrong with the state’s power grid. Prosecutors have said they are dealing with crimes and consumers have filed other lawsuits.
A federal report from 2011 states that demands for increased wintering of power generators in Texas have not been met for a long time.
At least six board members at ERCOT resigned this week. Abbott welcomed her resignation but said on television Wednesday that “more needs to be done”.
Contributor: The Associated Press