February 23, 2021

Texas electricity retailer Griddy hit with $1 billion class action lawsuit for ‘price gouging’ after outages

Texas electricity retailer Griddy hit with $1 billion class action lawsuit for ‘price gouging’ after outages

Texas power retailer Griddy is the target of a class action lawsuit filed in Houston state district court Monday alleging the company participated in price gouging after winter storm Uri cut power to millions across the state.

The lawsuit was filed by a Chambers County resident Lisa Khoury whose electricity bill from the week of the storm totaled $9,340, according to the suit. Khoury’s normal monthly bill averages between $200-$250.

The proposed class action lawsuit will includes all Texans who “used electricity services from Griddy and were hit with excessive charges resulting from the storm,” according to a release from Houston-based Potts Law Firm.

The lawsuit seeks more than $1 billion in financial relief for the affected customers as well as an injunction to prevent Griddy from collecting payment for “excessive” bills.

“At this point we don’t know how many people might be affected, but there are likely thousands of customers who’ve received these outrageous bills,” attorney Derek Potts who represents Ms. Khoury said in a statement. “A class action will be the most efficient and effective way for Griddy’s customers to come together and fight this predatory pricing.”

The suit alleges Griddy violated Texas’s Deceptive Trade Practices Act when it “allowed their customers to be charged such exorbitant amounts for electricity.”

In Texas’ deregulated energy market, Griddy and a handful of other electricity suppliers charge customers wholesale variable rates for power. Those plans are relatively new and have frustrated customers now dealing with expensive bills for a week where power was intermittent for many.

Around 25-30% of Texans are on a variable rate plan with their energy provider, according to Houston Public Media which cited plan comparison website ElectricityPlans.com.

Houston-based Griddy made an unusual pleas last week telling its 29,000 customers to quickly shift out of its network and find a new supplier. By Friday, the company said it was seeking relief from ERCOT and the PUC for its customers who were exposed to the high prices.

Khoury attempted to switch power providers February 16 but was unable to change to a new one until three days later after “persistent” outreach, according to the lawsuit.

Texas’ blackouts and increased cost of power were horrifying for customers left to foot the bills, but some companies are seeing a financial windfall as a result.

Australian investment banking company Macquarie Group capitalized on the soaring demand and energy prices, and expects to net after-tax profits of $215 million, according to The Wall Street Journal. Dallas billionaire Jerry Jones’ natural gas company Comstock Resources Inc. also cashed in on a surge in prices. Comstock chief financial officer Roland Burns said on an earnings call last week that “this week is like hitting the jackpot with some of these incredible prices.”

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