Electric power lines in South Austin on Feb. 17, 2021. Credit: Miguel Gutierrez Jr./The Texas Tribune

The Texas Tribune

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A Chambers County resident filed a class-action lawsuit against electricity retailer Griddy on Monday, accusing the provider of price gouging customers during last week’s freeze. She is seeking $1 billion in relief for affected customers.

Attorneys for Lisa Khoury said in the lawsuit that her bill spiked to $9,340 the week of the storm, and her average monthly bills range from $200 to $250. Griddy drafted payments from Khoury’s bank account several times, according to the lawsuit, pulling $1,200 before she blocked further charges from her bank. She still owes thousands.

Griddy passes wholesale electricity rates directly to customers, who in turn pay the company $10 a month. This differs from fixed-rate electricity plans which offer a consistent rate regardless of market conditions.

But because of a price hike fueled by a shortage of supply and skyrocketing demand, some customers were faced with bills charging tens of thousands of dollars. While electricity bills are likely to rise across the board, Texans on variable rate plans faced immediate and alarmingly high prices.

Texas’ Public Utility Commission, appointed by Abbott, raised the wholesale market price of electricity to $9 per kilo-watt hour — a 7,400% increase over the average 12 cents per kilo-watt hour — in response to rising demand. The hope was power generators would be enticed to produce more electricity.

“Energy prices should reflect scarcity of the supply,” the order stated.

Representatives for Griddy could not immediately be reached for comment. The electricity retailer addressed concerns of price gouging on its website and firmly placed the blame on the Public Utility Commission. The company states that it did not profit from raised prices.

“You effectively pay the same price as a retail energy provider or utility. No markups. No hidden fees. No contracts. That’s it,” the company stated.

Griddy warned its 29,000 customers last week of impending price hikes and encouraged them to seek out other electric providers. The company is offering customers a deferred payment plan to pay off balances over five months.

“At Griddy, transparency has always been our goal,” the company began a blog post on Thursday explaining the price hike. “We know you are angry and so are we. Pissed, in fact.”

Griddy has vowed to fight the raised prices, saying, “The market is supposed to set the prices, not political appointees.”

Gov. Greg Abbott has said scaling back the bills will be a top priority, and the state’s utility commission on Sunday took action to temporarily prevent electric companies from cutting power to customers who don’t pay and from sending out bills and cost estimates.

Other suits are also being filed related to damages from the winter storm.

Houston attorney Tony Buzbee filed a lawsuit over the weekend suing the Electric Reliability Council of Texas and Entergy for a total of $100 million on behalf of a family whose son died during forced outages last week. Buzbee said he plans on filing several more lawsuits against ERCOT and electric providers.

Disclosure: Entergy has been a financial supporter of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune’s journalism. Find a complete list of them here.