ERCOT shuts down Griddy, as Paxton sues power retailer over ‘deceptive business practices’

Texas Attorney General Ken Paxton on Monday filed suit against Griddy, claiming the retail power company used deceptive practices to mislead customers, many of whom were hit with electric bills in the thousands of dollars during the weather-driven power crisis.

Before the suit was filed, Griddy failed to make a required payment to the state’s grid manager. The Electric Reliability Council of Texas, or ERCOT, on Friday barred Griddy from participating in the state’s wholesale power markets, effectively shutting down the company.

Griddy, which offers customers access to wholesale prices, gained notoriety for billing customers in the thousands of dollars when wholesale prices skyrocketed during the recent freeze and power crisis.

Griddy said Monday that it asked ERCOT for emergency help on Feb. 16 after the Public Utility Commission mandated that wholesale prices rise to the state maximum of $9,000 per megawatt-hour, where they stayed for days.

That cost, which passed through to Griddy customers, is equivalent to $9 per kilowatt hour on residential bills, compared to a typical 9 cents to 10 cents per kilowatt hour in fixed retail plans.

Griddy said ERCOT did not respond to its plea for help. ERCOT “decided to take this action against only one company that represents a tiny fraction of the market,” Griddy said.

A spokeswoman for ERCOT said the grid manager did work with Griddy but could not discuss details because of confidentiality rules.

Paxton’s lawsuit claims the retail power company used deceptive practices to mislead customers. Griddy customers pay a monthly membership of about $10 and get access to wholesale power prices, which fluctuate but are usually cheaper than retail prices.

During the recent power crisis, when electricity supplies fell far short of demand, wholesale prices skyrocketed and Griddy customers were hit with massive bills.

Paxton’s suit alleges Griddy violated the Texas Deceptive Trade Practices Act through false, misleading and deceptive advertising and marketing.

“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,” Paxton said. “My office will not allow Texans to be deceived or exploited by unlawful behavior and deceptive business practices.”