Texas energy provider files for bankruptcy after harsh winter storm
The Texas energy provider has filed for bankruptcy after a harsh storm causing huge bills for it customers.
Griddy made the announcement in a statement on its website Monday, blaming the state's power grid management.
The prices set by the Electric Reliability Council of Texas (ERCOT) caused harm both to the company and its customers, the statement argued.
"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 is accused of having violated the state’s Deceptive Trade Practices Act and price-gouging in a class-action lawsuit.
Texas Attorney General Ken Paxton wipes out Griddy customers’ electric bills totaling $29.1 million https://t.co/v62iNrJZvh
— MariaHalkias (@MariaHalkias) March 16, 2021
“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 Texas Republican Attorney General Ken Paxton.
Griddy was the power marketer that sold consumers electricity at wholesale rates, which rose to $9,000 per megawatt hour as cold weather struck the state last week. Unable to cope with demand, utilities cut power to 4.3 million residents as temperatures fell below freezing.
The grid operator’s handling of the severe weather fueled a firestorm of criticism from residents and state officials who blamed ERCOT for lack of preparation for the severe cold. ERCOT called on utilities to cut power to protect the grid, which left 4.3 million people without heat or light and led to billions of dollars in damages.
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