A Texas power company targeted by state Attorney General Ken Paxton is nearing a bankruptcy declaration following allegations that it charged customers exorbitant rates during the unprecedented winter crisis in the Lone Star State.
Electrical provider Griddy is expected to file for bankruptcy in the coming days as clients ditch the service and litigation hangs over the embattled business, according to the Wall Street Journal, which cited people familiar with the matter. The company, which charges clients $10 per month for wholesale utility prices, was barred from utilizing the Texas electrical grid in February after a host of complaints from residents who said utility bills were reaching numbers in the thousands.
Paxton sued Griddy on March 1 and accused the corporation of misleading Texans.
“Griddy misled Texans and signed them up for services which, in a time of crisis, resulted in individual Texans each losing thousands of dollars,” Paxton said in a statement. “As Texans struggled to survive this winter storm, Griddy made the suffering even worse as it debited outrageous amounts each day.”
Paxton’s move followed reports that electrical bills jumped as high as $17,000 for one month of service after frigid winter temperatures roiled Texas, cutting off water and power for millions at the height of the crisis. Ty Williams, who pays bills on three properties, reported the massive $17,000 cost to ABC 8 and said his payment for all three areas amounted to just over $600 last month.
“How in the world can anyone pay that? I mean, you go from a couple hundred dollars a month … there’s absolutely no way,” he said. “It makes no sense.”
Paxton previously urged residents in a statement “to be aware of energy price hikes.” The office told consumers to “turn off autopay” and carefully review charges. The statement continued, “Price-gougers may be required to reimburse consumers and may be held liable for civil penalties of up to $10,000 per violation with an additional penalty of up to $250,000 if the affected consumers are elderly.”
As many as 3.8 million Texas homes were without electricity at the peak of the disaster, and water issues quickly followed as temperatures fluctuated and caused burst pipes and plumbing issues. A total of 13.7 million residents of the state were without water stability on Feb. 21, and many affected were under an advisory to boil their water, Greg Rasp, a media relations specialist for the Texas Commission on Environmental Quality, told the Washington Examiner at the time.
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Griddy did not immediately respond to a request for comment from the Washington Examiner.
