Griddy files for Chapter 11 bankruptcy in the wake of Texas power crisis
(ABC NEWS) — Griddy Energy has filed for Chapter 11 bankruptcy protection in the aftermath of the severe winter weather that hit Texas last month and triggered an energy crisis.
The wholesale electricity provider came under fire after many of its customers reported being hit with exorbitant bills during what is now dubbed Winter Storm Uri. The storm temporarily knocked out power for millions of Texans.
“Our bankruptcy plan, if confirmed, provides relief for our former customers who were unable to pay their electricity bills resulting from the unprecedented prices,” Griddy Chief Executive Officer Michael Fallquist said in a statement announcing the bankruptcy proceedings.
Fallquist said that prior to Uri, Griddy was a “thriving business” and blamed the operators of the state’s power grid, the Electric Reliability Council of Texas, for hurting its business and causing financial harm to customers.
Griddy said that it did not profit from the winter storm crisis and provided access to customers of real-time wholesale electricity prices. Griddy added that it neither influences nor controls the price of electricity and the prices are passed directly to customers without markup.
Finally, the company said that it earns the same $9.99 monthly fee regardless of the fluctuations in the price of electricity.
Griddy’s co-founder Gregory Craig added that “no retail energy provider or consumer should have to forecast and protect against such extreme and unforeseeable circumstances.”
The company disclosed that it had estimated assets of between $1 million and $10 million and estimated liabilities of between $10 million and $50 million, according to a bankruptcy petition filed Monday in the Southern District of Texas.
Earlier this month, Texas Attorney General Ken Paxton filed a lawsuit against Griddy, accusing it of misleading customers and deceptive business practices. The attorney general’s office said in court filings that it received more than 400 customer complaints against Griddy in less than two weeks.
“We are aware of the lawsuit filed by the Texas Attorney General against Griddy,” Griddy told ABC News in a statement. “We do not agree with the claims alleged in the complaint, and plan to vigorously defend against it. Until then the company has no further comment.”