A Texas Power Company Faces a Lawsuit Over a $9,000 Electric Bill

The historic February 2021 winter storm that swept across Texas sent energy demands soaring sky-high and rolling blackouts that never seemed to end all over the state. The demand for electricity resulted in price hikes, leaving some residents owing tens of thousands of dollars in utility bills. Lisa Koury, a Chambers County resident of Texas, took action over these never-before-seen energy prices after receiving a bill for $9,340 after the storm. Wholesale electricity retailer Griddy is named as a defendant in this lawsuit, facing allegations of illegal price-gouging during the power outage crisis.

Unlike other power companies, Griddy charges customers wholesale prices.

The explanation for the seemingly outrageous electricity bills Koury and other Griddy customers received after the storm stems from the company’s unique business model. Unlike other electricity providers that charge their customers a fixed rate, Griddy charges customers a wholesale rate (i.e. the same price they buy the electricity for). Under normal circumstances, this saves customers money. However, when Gov. Abbott appointed the Texas Public Utility Commission, the commission raised the wholesale market price by 7,400%, shooting the previous 12 cent per kilowatt hour rate to $9 per kilowatt hour.

Griddy warned its customers of a potential rise in prices, but many customers were unable to change providers during the storm.

As wild as a $9,000 electric bill sounds, Griddy points out that they did warn their customers of the possibility that prices would rise due to the weather. They even encouraged customers to seek out other fixed-rate providers, but many providers were not taking on new customers during the storm. For many of their 29,000 customers who were unable to change power providers, Griddy has offered a deferred payment plan allowing them to pay off their bills over five months. However, with bills exceeding $10,000 in many cases, five months is not much time.

This lawsuit is seeking to prevent Griddy from billing and collecting excessively priced charges.

The class affected by this lawsuit includes all Griddy customers who were affected by the alleged price gouging as a result of the winter storm. If successful, Griddy will likely be required to forgive any late or unpaid electric bills affected by the price hike. The Texas Utility Commission has taken steps to temporarily stop electricity providers from cutting power to customers as a result of late or unpaid bills, as well as preventing them from sending out cost estimates. These measures will likely persist until this class action or some of the similar litigation against other Texas power companies resolves.