After Winter Storm, $1 Billion Class Action Lawsuit Puts Heat on Griddy

The snow was beautiful. The electric bills afterward are ugly.
The snow was beautiful. The electric bills afterward are ugly. Creative Commons/DJJudah
After a record-breaking winter storm devastated Texas last week, the wholesale power retailer Griddy could be in hot water thanks to a lawsuit filed in Houston.

Since plummeting temperatures and snow pounded Texas and knocked out power for millions, reports of massive energy bills have popped up online and made national headlines. Some Griddy customers faced bills of several thousand dollars for a week’s worth of usage.

Texas politicians, Democrats and Republicans alike, quickly pointed the finger at wholesale energy providers — including Griddy — for allegedly price gouging.

That same accusation is at the heart of a $1 billion class-action lawsuit filed Monday in the state’s 133rd District Court in Harris County.

The lawsuit was filed by Lisa Khoury, who lives in Mont Belvieu and says her Griddy bill skyrocketed to $9,340 between Feb. 13 and Feb. 19. Her monthly bills usually range between $200 and $250, according to a press release.

Before the storm, Griddy’s wholesale energy rate was generally around $50 per megawatt/hour, but the rates shot up to more than $9,000 per megawatt/hour when the state’s Public Utility Commission raised the price cap during the freeze.

The proposed class-action lawsuit includes any Texas resident who “used electricity services from Griddy and were hit with excessive charges resulting from the storm,” the Houston-based Potts Law Firm said in the release.

According to the lawsuit, Griddy violated the Texas Deceptive Trade Practice Act among others.

Derek Potts, who is representing Khoury, said that “no one knows for sure” how many customers are in a similar situation, but that he expects the number is in the thousands.

“We just know that people are talking about this on a wide basis,” he told the Observer. “It seems like on the surface that it's going to be a large number of people.”

Potts described the prices as “excessive and exorbitant, and that’s another way to say price gouging.”

The lawsuit claims Khoury attempted to contact Griddy several times but had no luck, although the energy retailer continued making daily withdrawals from her bank account.

“While she was sitting home freezing with no power, they were taking huge sums out of her bank account." - Derek Potts, Potts Law Firm

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“While she was sitting home freezing with no power, they were taking huge sums out of her bank account,” Potts said. “It's not just charges; it's collection of excessive fees. Her money is already gone.”

Potts added that the lawsuit seeks to both secure reimbursements for customers whose money was taken like this, but it’s also seeking an injunction to prevent Griddy from continuing collection. “The state of Texas so far has not stopped it from happening,” he said. “We think it needs to come to an end immediately.”

Although Khoury attempted to switch power providers during the storm, it took her several days to do so, the lawsuit says.

For two of those days, Khoury and her husband, who were hosting her parents and her in-laws, had little to no power.

At the time of publication, Griddy had not replied to the Observer’s request for comment.

Last week, several officials and lawmakers blasted energy providers for the apparently inflated rates during the storm.

State Rep. Jeff Leach, a Republican from Plano, took to Twitter and promised that “there will be hell to pay” for companies “who take advantage of or overbill Texans after this crisis.”

On Saturday, Gov. Greg Abbott tweeted that “Texans shouldn't have to face a spike in their energy costs,” adding that he had held an emergency meeting with lawmakers to “begin crafting solutions.”

Abbott has also launched an investigation into the Electric Reliability Council of Texas, or ERCOT, which manages the state’s power grid.

But the Texas Democratic Party said the crisis could have been avoided and blamed Abbott and other Republican leaders for the fallout.

“Texans will not forget this manmade crisis that is still affecting tens of millions of families across the state,” party chairman Gilbert Hinojosa said in a news release. “Greg Abbott is not protecting us from the abuses of a deregulated energy system, and he will fail to do so for the next emergency.”
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Patrick Strickland is the news editor at the Dallas Observer. He's a former senior reporter at Al Jazeera English and has reported for the New York Review of Books, The Guardian, Politico EU and The New Republic, among others.