Texas Attorney General Ken Paxton filed a lawsuit Monday against electricity retailer Griddy, claiming it misled customers using deceptive business practices after some customers reported bills costing tens of thousands of dollars.
These charges were incurred during Texas’ devastating winter storm that nearly shut down Texas’ electrical grid and sent energy demand skyrocketing. The lawsuit targets Griddy’s auto-billing system, which began drafting money out of customer’s accounts as the bills rolled in.
“Griddy misled Texans and signed them up for services which, in a time of crisis, resulted in individual Texans each losing thousands of dollars,” Paxton said in a statement. “As Texans struggled to survive this winter storm, Griddy made the suffering even worse as it debited outrageous amounts each day.”
ERCOT is $2.5 billion short in payments from retail power providers and others, Bloomberg reported Monday. It has covered some debt with revenues from another market, but remains $1.7 billion short.
Griddy customers paid a $10 monthly membership and in turn were passed wholesale power prices. These prices fluctuate but usually are cheaper than retail prices. However, unlike fixed-rate electricity plan users, Griddy customers are susceptible to market changes due to increased demand or reduced supply.
Paxton’s lawsuit claims the company understood the risk this posed to customers but misled them through its marketing.
Some customers have reported bills costing thousands of dollars, some surpassing $15,000. The retailer places the blame for the exorbitant prices on Texas’ Public Utility Commission, saying they were due to the commission jacking up wholesale prices.