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$29 million of electric bills from Texas winter storm will be forgiven, AG says

Attorney General Ken Paxton said energy company Griddy debited "enormous amounts" from customers during February's storm, which left millions without power.
Image: A man walks to his friend's home in a neighbourhood without electricity as snow covers the BlackHawk neighborhood in Pflugerville
A man walks to his friend's home in a neighborhood without electricity as snow covers the BlackHawk neighborhood in Pflugerville, Texas, on Feb. 15.Bronte Wittpenn / Austin American-Statesman/USA Today Network via Reuters file

Texas Attorney General Ken Paxton said Griddy Energy will forgive the more than $29 million customers owe in unpaid bills.

Paxton, who sued the energy company this month, said he wanted to "hold them accountable" in last month's historic winter storm, which left millions of Texans without power in subfreezing temperatures.

As people struggled to survive, Griddy debited "enormous amounts from customer accounts," Paxton said in a statement Tuesday. He had sued the company under the Texas Deceptive Trade Practices Act, but he dropped the suit in exchange for the company's working in "good faith" to resolve the unpaid bills.

"I ensured that Griddy's proposed bankruptcy plan takes an important step forward by offering releases to approximately 24,000 former customers who owe $29.1 million in unpaid electric bills," Paxton said. "Griddy and my office are engaged in ongoing good faith negotiations to attempt to address additional relief for those Griddy customers who have already paid their storm-related energy bills."

Griddy — which provides wholesale pricing to its customers for a $9.99 monthly fee — said in an online statement Monday that it had filed for Chapter 11 bankruptcy protection, blaming the Electric Reliability Council of Texas, or ERCOT.

ERCOT manages power for about 90 percent of the state's electric load, and when the winter storm hit, energy usage soared. ERCOT set prices at $9,000 per megawatt-hour, according to Griddy; the seasonal average is $50 per megawatt-hour.

The spike in prices left many Griddy customers with bills totaling hundreds, and sometimes thousands, of dollars.

"The actions of ERCOT destroyed our business and caused financial harm to our customers," Griddy CEO Michael Fallquist said in a statement. "ERCOT made a bad situation worse for our customers by continuing to set prices at $9,000 per megawatt hour long after ... instructions had stopped. Our customers paid 300 times more than the normal price for electricity during this period."

The company said filing for bankruptcy protection will help it reorganize. ERCOT said in a statement, "We are reviewing their filing but have no comment on their accusations."

Paxton said this month that Griddy "misled Texans" and signed them up for wholesale energy services "which, in a time of crisis, resulted in individual Texans each losing thousands of dollars."

One customer, Jose Del Rio of Haltom City, has previously told NBC News that he was charged $630 for his vacant two-bedroom home and still owed $2,600. Del Rio said that his lights were off but that he kept the air at 60 degrees to prevent the pipes from freezing.

His bill is usually no more than $150 a month, and when he contacted Griddy, he was told to switch providers, he said.

Another customer, Royce Pierce, and his wife, Danielle, of Willow Park, said that in a matter of days their bill had climbed to nearly $10,000 for their three-bedroom home. They said last month that Griddy automatically debits the bill from their card and that they had to close the card because the company had wiped it out.

Gov. Greg Abbott said Tuesday that he had asked for and accepted Texas Public Utility Commissioner Arthur D'Andrea's resignation. D'Andrea was appointed March 3, days after DeAnn Walker stepped down as chair.

The commission, which is responsible for regulating the Texas power grid, has faced criticism over its handling of the February storm.