Texas Energy Company that Charged Huge Electric Bills During Storm Files for Bankruptcy
upstart writes in with an IRC submission:
Texas energy company that charged huge electric bills during storm files for bankruptcy:
The company made the announcement on its website in a post that blamed the Electric Reliability Council of Texas (ERCOT), which operates the state's electric grid.
"The actions of ERCOT destroyed our business and caused financial harm to our customers," Griddy Chief Executive Officer Michael Fallquist said in a statement.
Griddy has $1 million to $10 million in estimated assets and $10 million to $50 million in estimated liabilities, the company said in the filing. Over $29 million is owed to ERCOT, the filing says.
The bankruptcy filing stems from February's devastating winter storm, which shut down power for millions of Texans for days and led to shortages of heat, water, food and medicine. Chapter 11 is a form of bankruptcy that allows a company to restructure its debts and reorganize in order to pay creditors back over time.
Griddy was a feature of Texas' unusual, deregulated system for electric power. The vast majority of Texans -- and Americans -- pay a fixed rate for electric power and get predictable monthly bills. However, Griddy works by connecting customers to the wholesale market for electricity, which can change by the minute and is more volatile, for a monthly fee of $9.99.
That setup can lead to savings sometimes, but also exposes customers to big risks.
[...] Two weeks ago, Texas' attorney general filed a lawsuit against Griddy Energy and Griddy Holdings for "false, misleading, and deceptive advertising and marketing practices." The lawsuit said Griddy misled customers and downplayed the incredible risk of its pricing scheme, which charges the most when customers are most vulnerable.
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