Texas energy provider Griddy filed for bankruptcy on Monday and blamed the state’s power grid management for destroying its business.
In a statement on its website, the company argued that actions taken by the Electric Reliability Council of Texas (ERCOT) to price energy at extremely high levels during a massive winter storm last month harmed both its customers and the business itself.
“Our bankruptcy plan, if confirmed, provides relief for our former customers who were unable to pay their electricity bills resulting from the unprecedented prices. ERCOT made a bad situation worse for our customers by continuing to set prices at $9,000 per megawatt hour long after firm load shed instructions had stopped. Our customers paid 300 times more than the normal price for electricity during this period,” said CEO Michael Fallquist.
Griddy and Texas officials have traded blame over who was responsible for price hikes that led to many Texans facing shockingly high energy bills in the days following the deadly storm. Griddy, which allows customers to choose between various plans, recommended that users switch to fixed-rate plans before the storm hit, and many who didn’t found themselves facing extremely high rates for power use during the storm as much of the state’s power grid failed.
A Griddy co-founder, Gregory Craig, added in the company’s statement that its price plans would not have resulted in the high energy bills had “had the grid not failed and the regulators not intervened.”
The company is accused of price-gouging in a class-action lawsuit, and the state’s attorney general alleged in a lawsuit that Griddy violated Texas’s Deceptive Trade Practices Act.
“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,” said state Attorney General Ken Paxton (R).
Dozens of Texans and others in surrounding states died as a result of freezing conditions last month, while millions were left without power for days. Officials have blamed frozen machinery at natural gas plants, which provide much of the state’s power, for the outages.