Texas Electric Company Sued for $1 Billion Over Sky-High Bills

The lead plaintiff in a class action claims her bill spiked from $200 to $9,340 despite power being out for days during last week’s winter storm.

DeAndré Upshaw shows a $5,000 bill from Griddy on his cellphone last week for his 900-square-foot apartment in Dallas. (Lola Gomez//The Dallas Morning News via AP)

HOUSTON (CN) — A southeast Texas woman on Tuesday sued power retailer Griddy after she was billed $9,340 despite enduring power outages during Winter Storm Uri last week, hours before four nonresident members of the embattled Electric Reliability Council of Texas resigned over the power grid operator’s handling of the disaster.

Lisa Khoury, of Mount Belvieu, filed a proposed class action in Harris County District Court late Monday evening, seeking $1 billion in damages for claims of negligence and violation of the Texas Deceptive Trade Practices Act.

“Griddy knew it was overcharging consumers, that consumers would be harmed, and Griddy would be unjustly enriched by retaining customers’ payments,” the 17-page lawsuit states.

Houston-based Griddy sells power to customers at wholesale rates in exchange for a $10-per-month membership fee. When Uri inflicted days of sub-freezing temperatures across the entire state last week, a significant amount of power generation in Texas was knocked offline and caused wholesale electricity prices in the state to soar to nearly $10,000 per megawatt hour – a hundreds-times increase over usual prices.

Variable-rate electricity plans such as Khoury’s differ from fixed-rate plans where the temporary wholesale price increases will not be passed on to the customer. Her attorney Derek Potts said his client’s typical bill is between $200 and $250 each month and that she has repeatedly tried to talk to Griddy about the daily withdrawals from her bank account since receiving the bill. He says she received no response, so she placed a stop-payment order on the account.

“At this point we don’t know how many people might be affected, but there are likely thousands of customers who’ve received these outrageous bills,” Potts said in a written statement. “A class action will be the most efficient and effective way for Griddy’s customers to come together and fight this predatory pricing.”

Griddy could not be immediately reached for comment on the lawsuit Tuesday afternoon.

In a statement on its website posted during the storm, Griddy denied it is engaging in price gouging and that it has not profited from the spike in wholesale prices. The company instead blames the Public Utility Commission of Texas for hiking pricing to $9 per kilowatt hour until Friday.

“We know you are angry and so are we,” Griddy said on its website last week. “Pissed, in fact.”

ERCOT has also faced withering criticism for its management of Texas’ power grid and for the state’s deregulated electricity market during the storm. Critics say ERCOT failed to ensure power plant operators properly winterized their facilities this year, accusing it of prioritizing attention on measures for the sweltering-hot summers.

The grid operator’s board has faced particular criticism for having four members who live outside of Texas. Those four members – board chair Sally Talberg, vice chair Peter Cramton, finance and audit chair Terry Builder and human resources and governance committee chair Raymond Hepper – announced their intent to resign Tuesday afternoon.

They informed the rest of the board they will quit after Wednesday morning’s board meeting.

“We want to acknowledge the pain and suffering of Texans during this past week,” the four stated in a letter to the board. “To allow state leaders a free hand with future direction and to eliminate distractions, we are resigning from the board.”

ERCOT’s attorneys announced shortly after the resignation announcement that all four positions will remain vacate for the time being. ERCOT could not be immediately reached for comment Tuesday afternoon.

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