$1 Billion Class-Action Lawsuit Filed Against Texas Electric Company After ‘Catastrophic’ Bills

Top line

Houston-based electricity company Griddy was hit by a class action lawsuit seeking “over $ 1 billion in financial relief” after a large number of customers reported astronomical energy costs after last week’s winter storm, despite millions in the State during that time without electricity were the height of freezing.

The flags of the United States and Texas fly in front of high voltage storms on February 21, 2021 … [+] Houston. (Photo by Justin Sullivan / Getty Images)

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Key factors

The lawsuit alleges that customers received electricity bills of up to $ 17,000 after the winter storm. This is a price cut by the company.

Griddy customers pay wholesale prices for electricity, the price of which depends on shifts in demand – a very different system than the fixed-income electricity prices that essentially all other companies use to charge customers.

The massive surge in demand, caused by an unprecedented load on the state power grid, caused spot electricity prices to rise from $ 50 per megawatt hour before the storm to $ 9,000 per megawatt hour, according to the lawsuit.

During the aftermath of the storm, Griddy encouraged customers to switch to a fixed price provider. However, most customers couldn’t do this right away because the companies weren’t accepting new customers at that point.

An email Forbes sent Griddy for comment was automatically replied with a response saying the company “would fight for accountability for why prices were allowed to stay so high” and how customers felt sign up for a deferred payment plan.

What we don’t know

It is not clear if or how the government plans to provide relief to affected customers, although some officials have expressed a desire to do so.

Big number

29,000. That’s how many customers Griddy has.

Key background

A historic winter storm and cold eruption resulted in blackouts across Texas last week, bringing the state’s power grid to the brink of total blackout. The storm hit much of the eastern United States, but Texas took the brunt of the humanitarian impact as millions in the state were unable to access electricity or heat during the record-breaking cold due to blackouts. The reaction to the storm and the willingness or lack of it prior to the event have sparked political debates about who is responsible and what should be done in the future.

further reading

The Texas congressman says emergency aid will help Texans pay high post-freeze energy bills (CNN).

Texas Power Grid was “seconds or minutes” away from complete failure, leaving the entire state dark, says ERCOT (Forbes)

Officials Don’t Know When Power Will Be Back In Texas (Forbes)

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