After the Texas snowstorm that left millions without power, $29 million in unpaid electric bills will be forgiven by Texas Attorney General Ken Paxton as he works with Griddy Energy to address the aftermath of the snowstorm power outages.
On March 1, Texas Attorney General Ken Paxton sued Griddy Energy, LLC for violating the Texas Deceptive Trade Practices Act through their high energy costs with little to no warning during the Texas snowstorm. His office issued a statement that he “will hold Griddy accountable for their escalation of this winter storm disaster.” Paxton later expanded, saying, “My office will not allow Texans to be deceived or exploited by unlawful behavior and deceptive business practices.”
On March 15, Griddy filed for Chapter 11 bankruptcy protection; Griddy’s CEO Michael Fallquist explained that this would be a way to provide financial relief to customers who were unable to pay their electric bills resulting from the high prices during the storm. Subsequently, on March 16, AG Paxton announced that he would abate the lawsuit and work with Griddy in good faith to resolve the issues. His statement included that he “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 to attempt to address additional relief for the customers who have already paid their storm-related energy bills.”
In mid-February, the state of Texas had a massive snowstorm that left millions without power. According to the Texas Tribune, at the height of the crisis, 4.5 million businesses and homes were without power. During the snowstorm, Griddy, an energy company, took thousands of dollars from people’s bank accounts and charged their credit cards (Texas Tribune). Expanding, a report noted that a Texas resident’s bill after the storm was $7,300 — more than 10 times what she previously paid in an entire year. Similarly, NBC News reported that Royce Pierce and his wife Danielle had their bill climb to almost $10,000 for their three-bedroom home. Because Griddy automatically debits the bill from their card, they had to close the card because the electric bill wiped it out.
While the Texas AG has taken actions to make sure that Griddy is held accountable for the dire financial state that many Texans were left in, Griddy places the blame on ERCOT. According to Griddy, ERCOT set prices at $9,000 per megawatt hour, while the seasonal average is $50 per megawatt hour. Griddy CEO Michael Fallquist stated that it was ERCOT who destroyed their business and caused financial harm to Griddy’s customers. During a time where many people are already struggling financially due to the COVID-19 pandemic and lockdowns, the consequences of the Texas snowstorm power outages have left people with emptied bank accounts and high amounts of credit card interest. According to the Dallas News, Texas politicians have differing views on how to move forward. House Speaker Dade Phelan believes the state power grid operator’s decision to keep the $9,000 per megawatt hour price during the snowstorm was correct and saved lives. On the other hand, Texas Lt. Gov. Dan Patrick and the Senate displayed their disagreement by passing a bill that would order the Public Utility Commission to reverse the $16 billion in charges that came from overcharges for wholesale electricity during the storm. Phelan argues that the bill would be government intervention in the free market which would have major consequences. Certainly, this is just the beginning of the conversations and debates that are to come regarding Texas’s energy market, repricing, and consumer relations in order to prevent something like this from occurring again.
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ARTICLE BY: KATE SCHLESSELMAN
U.S. NEWS EDITOR: CARSON WOLF
PHOTO CREDITS: POLITICO