The state of Texas sued Griddy Electric on Monday, at a lawsuit alleges the”astronomical” energy bills the California-based energy retail energy supplier sent to customers in the wake of recent accidents amounted to false, deceptive and misleading business practices.
“During the 2021 Winter Storm, countless Texans spent in the frigid cold with rolling blackouts and stretches of no heat or water. However, Texans who relied on the electrical supplier Griddy to heat their homes and protect their own families were unfortunately shocked to learn that they were incurring astronomical energy bills,” the introduction to the Lone Star State’s request starts. “Griddy, the business that promised Texans cheap’wholesale’ prices that would always beat traditional energy costs, blatantly contradicted these promotional representations since it auto-debited countless bucks from Texans’ checking account every day. Griddy was completely aware of the truth of this risk in its own pricing scheme–energy prices at a time when consumers are the most vulnerable”
Filed by the state’s indicted Attorney General Ken Paxton (R)–who has been battling allegations of deceptiveness of his own in a longstanding securities fraud indictment from the country the lawsuit notes that the latest polar vortex freeze was”not the very first time” Griddy surprised customers with tremendous price spikes.
“As a consequence, consumers in 2019 were surprised and furious at charges-up to $1,200 for three days-that were highly inconsistent with all the advertising that had enticed them to Griddy.”
Paxton described the suit as the first his workplace registered in the wake of the power outages.
“Griddy tricked Texans and signed them up for services which, at a time of tragedy, led to individual Texans each losing thousands of dollars,” Paxton wrote in a statement. “As Texans fought to live this winter storm, Griddy left the anguish even worse since it debited outrageous amounts every day.”
Horror stories of clients struck sky-high power bills in the aftermath of the winter storm abound. Brazos Electric, the largest power cooperative in Texas, filed for Chapter 11 bankruptcy protection on Monday after receiving $2.1 billion in bills in the wake of the catastrophe.
Inside a court in Harris County, Texas–home to Houston–a woman called Lisa Khoury registered a class action lawsuit alleging Griddy slapped her with a $9,546.84 tab.
Paxton’s office notes Khoury was hardly alone.
“Leaving these customers especially vulnerable, Griddy used auto-debiting to draw hundreds, if not thousands, of dollars from consumers’ checking accounts at a period of days,” the lawsuit states, emphasizing those words from the request. “These huge daily withdrawals resulted in some Texas consumers getting overdraft charges from their lender.”
Paxton’s office lent an older woman pleading with Griddy for leniency on her invoice after getting one of those overdraft fees.
“I cannot make it to the bank until Friday. My automobile is snow and iced… I feel there is an error on my account. We generally keep our thermostat at 60 degrees. Since Sunday we have kept it at 50 degrees. . . I have to wear gloves inside it’s so cold. Please provide me Monday when I could safely move out and look after my equilibrium. If I could safely move out before then, I will. I’m 67. It is a security hazard to really go out at this moment.”
Texas asserts that those pleas went unheeded, and the state accuses Griddy of falsely marketing their customers’ savings.
By playing down cost hikes as rare, Griddy was”consistently downplaying the threat to the consumer at the energy spot market, and deploying perplexing and contradictory figures,” according to the petition.
Harris County Attorney Christian Menefee, recently voted in as the best civil attorney for Texas’s largest county, applauded the country’s action–but called for follow-up actions.
“That is but a first step to hold businesses accountable for the suffering Texans experienced during and following the power grid collapse. I am proud of my office’s attempts to safeguard Harris County residents from fraudulent business practices–that our county is directing the nation on addressing the important problem of price gouging,” Menefee said. “Tomorrow, I am heading to Austin to testify before the Texas House’s Company and Industry Committee concerning changes they could make to the law to empower my office along with other local governments to become involved in the struggle for consumer protection”
Griddy did not immediately respond to an email requesting comment.
The state needs an injunction blocking Griddy from misleading advertisements, cash damages of $10,000 per violation and up to $650,000 if the victim is 65 decades old or older, and disgorgement of their company’s assets.
Find out more about the history of Texas’s energy grid and evaluation of ERCOT on the newest installment of Law&Crime’s podcast”Objections.”
