Texas Attorney General Ken Paxton (R).
An energy company lured customers with a deceptive advertising campaign and sent them expensive bills as Texas was plunged into a power outage crisis by a blizzard in February. In response, Texas Attorney General Ken Paxton announced Monday (March 1) that the Justice Department will sue the energy company.
The energy company, Griddy LLC, is based in California and attempted to make a disaster fortune. Paxton’s office said Monday that the lawsuit aims to stop Griddy from further misrepresenting its energy prices and not allowing the company to charge Texans hundreds (and sometimes thousands) of dollars for electricity after giving them a few days of use.
In a statement, Paxton said, “Grid has misled Texans and contracted with them for service. costing every Texan thousands of dollars in this Time of crisis. It is completely outrageous that Grid is still taking advantage of Texans as Texas faces hardships in this winter storm.”
Grid boasts to Texans that it offers “wholesale” prices and therefore offers more affordable alternatives than traditional energy providers. The company also touted that it could pass on savings to customers in times of low electricity demand.
The lawsuit says the company’s service would expose customers to significant risk from market fluctuations during periods of unstable demand. Paxton’s office claims that Grid has consistently underestimated the nature and extent of those risks.
During last month’s winter storm, Grid’s customers were charged “excessive prices. The company’s automated billing system left many customers, many of whom were elderly residents, with overdrawn bank accounts.
The lawsuit says, “Grid’s use of automated billing devices has left consumers particularly helpless by withdrawing hundreds of dollars (or even thousands of dollars) from their checking accounts over the course of a few days. These large daily withdrawals also resulted in some Texas consumers being charged bank overdraft fees by their banks.”
The lawsuit also suggests that this isn’t the first time Grid has charged customers exorbitant prices; in August 2019, during a heat wave that hit Texas, the company also passed on increased energy costs to customers due to higher demands on the grid. “As a result, in 2019, consumers were surprised and outraged to receive bills of up to $1,200 in just three days. This is highly inconsistent with the advertising that enticed them to call themselves Grid customers.”
The lawsuit also says the company’s response to its consumers being harmed in 2019 was dismissive.
The Justice Department noted that Grid violated the Texas Deceptive Trade Practices Act, so the department will seek an injunction against the company to force it to be more honest about its energy services in the future.
Texas suffered infrastructure damage during last month’s brutal cold and ice storm that brought days of power and water shortages to residents across the state. This triggered a statewide power outage that affected more than 4 million Texas customers. Meanwhile, power shortages at water treatment facilities led to contaminated drinking water for approximately 7 million Texans.
Recent Comments