Embattled electric company Griddy files for Chapter 11 bankruptcy, owes ERCOT $29M

Texas

DeAndré Upshaw shows a $5,000 bill from Griddy on his cell phone for his 900-square-foot apartment during very cold weather in Dallas, on Friday, Feb. 19, 2021. The Texas power supplier Griddy, which sells unusual plans with prices tied to the spot price of power on the Texas grid, warned its customers over the weekend that their bills would rise significantly during the storm and that they should switch providers. (Lola Gomez//The Dallas Morning News via AP)

AUSTIN (KXAN) — Griddy Electric, LLC, which was taken off Texas’ power grid following its extremely high energy bills to customers during February’s winter storms, filed for Chapter 11 bankruptcy protection Monday.

The company is based in Connecticut but served customers in Houston and surrounding cities in Texas, according to the bankruptcy filing in the U.S. Bankruptcy Court for the Southen District of Texas

Of the 19 debtors Griddy lists in its filing, the company owes the state’s power grid administrator, Electric Reliability Council of Texas, the most by far at around $29 million. The filing lists the amount as disputed.

The filing also indicates they owe power companies CenterPoint and Oncor, as well as California-based payment platform company Stripe, more than $1 million each.

The company is also being sued by the Texas Attorney General’s Office, accused of violating the Texas Deceptive Trade Practices Act for sending out electric bills when wholesale energy prices reached record amounts during the storms, and then automatically debiting accounts for those bills.

A class-action lawsuit against the company was also filed by Lisa Khoury, who received a bill for more than $9,000 as the storms increased power demand and supply shrunk due to lack of generation.

Griddy used an indexed pricing model, legal under Texas law, that charges customers a subscription fee to be able to access power at wholesale costs, rather than retail. When wholesale costs skyrocketed during the winter storms and ensuing power disaster in Texas, those prices were immediately passed to Griddy’s customers.

The company said in a statement they paused billing as they looked to find a solution.

“We have always been transparent and customer-centric at every step. We wanted to continue the fight for our members to get relief and that hasn’t changed,” the company said.

The State of Texas, Khoury and the Public Utility Commission of Texas are all listed as debtors in the filing but with unknown amounts.

The filing says Griddy has an estimated $1-$10 million in assets and $10-$50 million in liabilities.

In a statement on Tuesday, AG Ken Paxton said:

“My office sued Griddy Energy, under the Texas Deceptive Trade Practices Act, to hold them accountable for their escalation of last month’s winter storm disaster by debiting enormous amounts from customer accounts as Texans struggled to survive the storm,” said Attorney General Paxton. “I ensured that Griddy’s proposed bankruptcy plan takes an important step forward by offering releases to approximately 24,000 former customers who owe $29.1 million in unpaid electric bills. Griddy and my office are engaged in ongoing good faith negotiations to attempt to address additional relief for those Griddy customers who have already paid their storm-related energy bills.”

Texas AG Ken Paxton

We have reached out to Griddy’s attorney for further comments. Once we receive a reply, we will update this story.

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