Texas' attorney general announced on Monday he's suing electricity provider Griddy over large power bills passed onto customers during the February winter storm.
The lawsuit follows ERCOT’s revocation of Griddy’s access to the state grid on Friday, saying Griddy hasn’t paid some of its bills.
So where does that leave Griddy customers?
Providers of Last Resort Will Provide Power
Customers who were still with Griddy on Friday will be transitioned to what’s known as a Provider of Last Resort or POLR. It’s considered a safety net for customers, but consumer advocates warn it’s not always the best deal.
“It's going to be very important for customers who are shifted to the Provider of Last Resort to take a look at the plan that they're put on because they very likely might want to go ahead and change again,” said Tim Morstad, associate state director for AARP Texas.
Morstad explained the new plans are typically month-to-month contracts. He urged consumers to read the terms carefully and shop around because they can switch.
Customers Facing Thousands in Electricity Charges
During the winter storm two weeks ago, customers from across North Texas reached out to NBC 5 Responds with their Griddy bill summaries ranging from a few hundred to thousands of dollars.
Scott Willoughby of Royce City had the highest Griddy bill summary NBC 5 Responds reviewed. His latest bill summary totaled $17,816.46 to power his 3,000-square-foot home for part of February.
“I'm not penniless by any means, but it wiped out a good chunk of my retirement savings and hopefully I'll get some of it back,” Willoughby said on Monday.
Willoughby, like many Griddy customers, was on a pre-paid plan so the charges were automatically paid. In Willoughby’s case, the charges hit his credit card. The Army veteran started a GoFundMe page to help pay the bill.
Other customers said their savings accounts were drained. Still, others said they closed their bank accounts or disputed the charges and still had outstanding bills with Griddy.
It’s not yet clear what happens to that money and though state lawmakers have talked about setting up a relief fund for customers, it hasn’t materialized yet.
Texas Sues Griddy
Texas Attorney General Ken Paxton announced on Monday he was suing Griddy, accusing the company of violating the Texas Deceptive Trade Practices Act. The 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 allowed under Texas law and can see rates go up and down depending on the market. Fixed-rate plans, on the other hand, generally don’t see drastic rate changes during a contract period.
At Griddy, customers paid a $9.99 monthly membership and the wholesale price of the electricity they use.
When electricity became scarce during the winter storm, the price of power shot up.
Ahead of the storm, Griddy took the unusual step of asking customers to switch to a fixed-rate plan with another company, but many said they couldn’t find another provider who could take them in time.
Willoughby said he didn’t think the bill would go as high as it did and began to panic as he checked the Griddy app during the winter storm.
“The first couple of days I'm thinking it might cost me a couple of hundred bucks, but I'll ride it out. They've saved me a couple of hundred bucks and it'll all even out. Then I started getting six, eight hundred dollars a day and up to $3,500 a day bills. That was not what I signed up for,” Willoughby said.
Willoughby said he believed the entire system shares the blame for the high bills customers saw during the storm -- not just Griddy.
“All they did was pass the wholesale cost along to the consumer and they were upfront about that. I think they're being made a scapegoat,” Willoughby said.
“These variable price plans are risky and have been risky for some years,” Morstad said.
In 2019, NBC 5 reported some Griddy customers faced hundreds in electricity charges during an August heatwave.
“We've been asking the state regulators to take a look at these for quite a while because it's very conceivable that a consumer could go on to a website and try to shop the market and find themselves on a plan that looks like it's a great deal,” Morstad said. “But, the fine print has this really dangerous effect like what we've seen over the last two weeks in that their rates to go through the roof during periods of shortages.”
Morstad said the winter storm will also have a lasting effect on the overall energy market in the state, possibly forcing other providers out of business.
“You’ve got retail electric providers who couldn't meet their obligations. They created electricity plans and promises to deliver or retail the power to consumers at a certain price. But then the price for them to get the power from the wholesale market got incredibly expensive over the last couple of weeks. They're unable to meet their obligations. Some of them are looking to exit the market, which really leads to a lot of confusion for consumers,” he said.
Griddy 'Powering Down'
After ERCOT revoked Griddy’s rights to operate in Texas on Friday, Griddy published a statement on its website.
It said, in part, "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.”
Griddy hasn’t replied to NBC 5 Responds' requests for information or interviews.
Customers with concerns about their utility charges can file a complaint with the Public Utility Commission of Texas which announced it would investigate variable rate plans last week.
Consumers can also complain to the Texas Office of the Attorney General.
NBC 5 Responds is committed to researching your concerns and recovering your money. Our goal is to get you answers and, if possible, solutions and resolution. Call us at 844-5RESPND (844-573-7763) or fill out our Customer Complaint form.