AFTER enduring a wretched week of Arctic storms, hunger and cold, several Texans were handed another pain point — massive electricity bills.
Houston resident David Astrein, 36, a human resources director at a manufacturing company, said he’s been charged $2,738.66 so far this month versus $129.85 in January for a three-bedroom home with a detached 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.
Mr. Astrein is one of a swath of consumers facing sky-high payments in the aftermath of the storm — many took to social media to show electricity bills ranging as high as $8,000. According to their screen shots, most are customers of Griddy Energy, a power supplier with a unique business model.
The Macquarie Energy-backed company charges electricity based on real-time prices in wholesale power markets, therefore exposing consumers to the full swings. Griddy saw the problem developing and even urged its retail customers last weekend to switch to another provider. By Sunday, 20% managed to do so. But not Mr. 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 adequately is now a financial emergency for all of these customers on a program like Griddy.”
For Griddy, that business model meant it got only a very small cut of Mr. Astrein’s bill.
“I want to highlight that on the $2,738.66 total bill, Griddy only made $6.48,” Chief Executive Officer Michael Fallquist said in a text message. “We only make $9.99 per month, all other charges are a pass through.”
But for some Griddy watchers, the furor comes as scant surprise after the scorching summer of 2019 also resulted in eye-watering bills. The phenomenon is unique to Texas, where the retail power industry is entirely deregulated.
Texas Governor Greg Abbott convened an emergency meeting for Saturday to address the latest spike. He said he’s working with members of the legislature to develop solutions to “ensure Texans are not on the hook for unreasonable spikes in their energy bills,” according to a statement.
State Attorney General Ken Paxton has already opened a probe into the power failures and issued civil investigative demands to companies including Griddy.
In a Feb. 18 blog post, Griddy said the prices were sky high because the Public Utility Commission of Texas forced wholesale prices to $9 a kilowatt-hour, about 300 times more than normal.
“We know you are angry and so are we,” the blog said. “We intend to fight this for, and alongside, our customers for equity and accountability.”
Griddy said Friday it was seeking relief from the Electric Reliability Council of Texas, or Ercot, and the PUCT for customers who were exposed to the high prices.
As power is restored in Texas, new websites have sprung up to help organize potential class-action lawsuits. At least four of the new domains signal the target may be Ercot, which says it operates about 75% of the state’s electricity.
Astrein plans to pay the bill out of his own funds and said Griddy hasn’t reached out to him with any relief or remedy plan. Griddy said on its website that starting next month, it will have “price protection” aimed at removing the risk from any future price events. — Bloomberg