Griddy Energy filed for bankruptcy protection on Monday, one month after customers were hit with high electricity bills during the winter storm.
Some North Texas customers said they paid anywhere from a few hundred to thousands of dollars for electricity. One man in Royce City said his credit card, tied to his Griddy account, was automatically charged nearly $18,000 to power his 3,000-square-foot home for part of February.
Griddy offered wholesale electricity prices for customers who paid a $9.99 per month membership fee. As the storm approached, Griddy urged customers to find another provider and get on a fixed-rate plan.
When electricity prices shot up during the storm, the wholesale costs were passed onto customers.
According to Griddy’s bankruptcy filing, it owes ERCOT just over $29 million.
Griddy published a statement on its website saying, in part, that Griddy did not profit from the winter storm. Griddy also blamed ERCOT, saying the state’s grid operator set prices at $9,000 per megawatt-hour for too long.
Griddy is facing a class-action lawsuit. Texas Attorney General Ken Paxton is also suing, accusing the company of violating the Texas Deceptive Trade Practices Act. Paxton's lawsuit claims Griddy’s marketing misled customers about the risk of signing on for the indexed rate plan. The lawsuit said it will ask the court to order refunds to consumers.
Indexed rate plans or variable rate plans are legal under Texas law and can see rates go up and down depending on the market.
Late last month, ERCOT removed Griddy’s right to operate in the state.