After hearing reports of some Texans receiving massive electrical bills, the state’s utility regulator said it’s investigating companies that offer their customers rates that fluctuate based on the spot price of wholesale electricity.
The Public Utility Commission of Texas on Wednesday announced the probe into what are known as indexed retail electric providers. While these plans are allowed under state law, PUC Executive Director Thomas Gleeson said in a statement that “an influx of complaints into our Customer Protection Division has caused concerns that questionable business practices might be exacerbating the situation.”
Customers reported receiving astronomically high electric bills — some costing tens of thousands of dollars — due to a spike in wholesale prices during last week’s winter storm.
A Chambers County woman on Monday filed a $1 billion class-action lawsuitagainst one such provider, accusing electric company Griddy of price gouging customers during the freeze.
The woman’s bill spiked to $9,340 the week of the storm, compared to her average monthly bills that range from $200 to $250, according to the lawsuit.
Griddy passes wholesale electricity rates directly to customers, who in turn pay the company $10 a month. This differs from fixed-rate electricity plans which offer a consistent rate regardless of market conditions. Wholesale prices spiked during the storm because the winter weather temporarily knocked many power generators offline, shrinking supply and skyrocketing demand.
The utility commission on Sunday temporarily barred Texas electric providers from cutting power to residents who don’t — or can’t — pay and from sending out bills.