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- Consumers in Texas Face Sky-High Payments Following Area Storms
- Many took to social media to display electric bills of up to $ 8,000
- The phenomenon is unique to Texas, where the energy retail industry is completely unregulated.
After enduring a miserable week of arctic storms, hunger and cold, several Texans received another pain point: huge electricity bills.
Houston resident David Astrein, 36, the director of human resources for a manufacturing company, said he’s been charged $ 2,738.66 so far this month compared to $ 129.85 in January for a three-bedroom home with a separate garage. He and his wife stopped using their dishwasher, washer and dryer, and turned on as few lights as possible at night. They kept the heat on for their 5 month old son.
Astrein is one of a swath of consumers facing sky-high payments after the storm; many took to social media to display electric bills of up to $ 8,000. According to their screenshots, the majority are customers of Griddy Energy, an energy provider with a unique business model.
The Macquarie Energy-backed company charges electricity based on real-time prices in wholesale energy markets, exposing consumers to full fluctuations. Griddy saw the problem develop and even urged its retail customers last weekend to switch to another supplier. By Sunday, 20% managed to do so. But not Astrein.
“We were stuck with Griddy and those astronomical prices,” he said by phone. “The failure in Texas as a whole to plan for this properly is now a financial emergency for all of these clients in a program like Griddy.”
For Griddy, that business model meant it got only a small portion of Astrein’s bill.
“I want to highlight that on the total bill of $ 2,738.66, Griddy only made $ 6.48,” CEO Michael Fallquist said in a text message. “We only make $ 9.99 per month, all other charges are carry-over.”
But for some Griddy watchers, the furor comes as a little surprise after the scorching summer of 2019 also resulted in dazzling bills. The phenomenon is unique to Texas, where the energy retail industry is completely unregulated.
Status probe
Texas Governor Greg Abbott called an emergency meeting for Saturday to address the latest increase. He said he is working with members of the legislature to develop solutions that “ensure that Texans are not hooked by unreasonable spikes in their energy bills,” according to a statement.
Texas Rep. Michael McCaul, a Republican, said Sunday that the current plan is to use federal assistance funds to help homeowners with post-storm repairs, such as water damage and broken pipes, and surprise electric bills. Federal aid from the federal government is “what Texans so desperately need now,” he told CNN’s “State of the Union” program.
State Attorney General Ken Paxton has already opened an investigation into the power outages and issued civil investigation lawsuits to companies like Griddy.
In a Feb. 18 blog post, Griddy said prices were through the roof because the Texas Public Utilities Commission forced wholesale prices to $ 9 per kilowatt-hour, about 300 times higher than normal.
“We know you’re angry and so are we,” the blog read. “We intend to fight for this and together with our clients for fairness and responsibility.”
Griddy said Friday it was seeking relief from the Texas Electrical Reliability Council, or Ercot, and the PUCT for customers who were exposed to high prices.
As power is restored to Texas, new websites have emerged to help organize potential class action lawsuits. At least four of the new domains indicate that the target may be Ercot, which says it operates about 75% of the state’s electricity.
Astrein plans to pay the bill with his own funds and said Griddy has not approached him with any relief or remedial plan. Griddy said on its website that starting next month it will have “price protection” aimed at eliminating the risk of future price events.
-With assistance from Joe Carroll, Naureen S. Malik, Philip Tabuas and Rachel Adams-Heard.
