Texas company behind massive electricity bills seeks bankruptcy
The company that drew attention after sending huge electricity bills to customers after last month’s blackout-causing winter storm in Texas has filed for bankruptcy protection.
Griddy Energy sold power to consumers at wholesale prices plus a $9.99 monthly fee. Its rates skyrocketed during the February deep freeze, when state grid operators raised wholesale prices.
The company blamed its situation on the Electric Reliability Council of Texas, which operates the power grid in most of the state. Griddy said ERCOT kept wholesale prices at the state’s legal cap — $9,000 per megawatt hour — for too long.
“The actions of ERCOT destroyed our business and caused financial harm to our customers,” Griddy CEO Michael Fallquist said in a statement.
ERCOT said it would review the bankruptcy filing but had no further comment.
Griddy’s bankruptcy plan proposes to waive claims against customers for charges they incurred from Feb. 15 through Feb. 19, while the $9,000 per megawatt hour price for wholesale power was in effect.
The Texas attorney general said Tuesday that the waiver would cover about 24,000 former customers who owe $29.1 million in unpaid bills, and that negotiations were continuing over relief for customers who paid their bills.
Griddy said in a filing Monday in the federal bankruptcy court in Houston that it has assets worth up to $10 million and liabilities of up to $50 million.
Prices began to spike as last month’s Arctic storm approached Texas and many power generators shut down for various reasons — wind turbines froze, and frozen natural gas wellheads prevented some gas-fired power plants from receiving fuel.
Griddy warned customers that they would face price increases and told them to attempt to switch to another provider, but some who didn’t were hit with bills in the thousands of dollars.
Texas Attorney General Ken Paxton sued the company, which is headquartered in Playa Vista, California, but he said Tuesday that the lawsuit in state court was being set aside while his office and the company negotiated over relief for customers.
The company also faces a proposed class-action lawsuit filed by a customer.
Griddy is the third company to seek bankruptcy protection due to the storm, after Brazos Electric Power Cooperative Inc. and Canadian natural gas provider Just Energy Group. The combination of failing power generators and a spike in demand during the mid-February freeze led to forced power outages across the state as temperatures plunged into single digits.