Texas' attorney general said Monday he's suing electricity provider Griddy for passing along massive bills to its customers during last month's winter storm.
The lawsuit comes days after Texas' power grid manager effectively shut down Griddy by revoking its access to the state's electricity market.
Griddy charges $10 a month to give people a way to pay wholesale prices for electricity instead of a fixed rate. But when temperatures plummeted well below freezing last month, wholesale prices spiked and Griddy customers were left with sky-high electricity bills.
The latest news from around North Texas.
"Griddy misled Texans and signed them up for services which, in a time of crisis, resulted in individual Texans each losing thousands of dollars," Paxton stated in the release. "As Texans struggled to survive this winter storm, Griddy made the suffering even worse as it debited outrageous amounts each day. As the first lawsuit filed by my office to confront the outrageous failure of power companies, I will hold Griddy accountable for their escalation of this winter storm disaster. My office will not allow Texans to be deceived or exploited by unlawful behavior and deceptive business practices."
The lawsuit accused Griddy of violating the Texas Deceptive Trade Practices Act and seeks refunds for customers. The unusually heavy winter storm blanketed much of Texas with snow, knocking out electricity to 4 million customers and leaving many struggling to find clean water.
The Dallas Morning News reports Griddy made an unusual plea during the storm when it told all 29,000 of its customers to switch to another provider as electricity prices soared to as high as $9,000 a megawatt-hour. Its customers were fully exposed to the real-time swings in wholesale power markets, resulting in electricity bills as high as $16,000.
On Friday, ERCOT, which runs the state's power grid, pulled Griddy's right to do business in Texas, saying the company has failed to pay some of its bills. All of Griddy's customers were being switched to other electric providers.
Griddy said in a statement that ERCOT "took our members and have effectively shut down Griddy.
"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 statement said.
Paxton's lawsuit follows a $1 billion class-action lawsuit that alleges Griddy price gouged customers during the winter storm. The lawsuit’s lead plaintiff, Lisa Khoury, said her bill spiked to more than $9,000.