World Texas Power Retailer That Charged Clients Thousands During Freeze Hit With $1 Billion Lawsuit
Texas Failed Because It Did Not Plan
What went wrong in Texas? The Lone Star State made three fundamental errors.Severed from electricity and bare to the frigid weather, Texas’s infrastructure suffered a kind of multisystem failure. Pipes began to burst inside homes. Cell networks went down, preventing people from calling 911. In Austin and elsewhere, so many people ran their pipes at a drip (in order to prevent them from freezing) that the water system depressurized, contaminating the supply and forcing residents to boil their water before using it.
In the aftermath of an unprecedentedthat left residents without access to power for several days, one of the state's largest electricity retailer is facing a class-action lawsuit that seeks roughly $1 billion to compensate customers affected by surging prices that came alongside the inclement weather.
Lisa Khoury is the lawsuit's lead plaintiff, according to the Dallas Morning News, which first published a report detailing the legal action. Backed by attorney Derek Potts, Khoury's complaint also aims to secure an injunction that would block the retailer, Griddy, from actually acquiring payments from customers at increased rates. The resident of Chambers County, near Houston, reportedly received an electric bill that amounted to $9,340 for one week's worth of services during the bout of inclement weather, a sum that was about 40 times the cost of her usual monthly payment.
Why the Texas power grid is struggling to cope with the extreme cold
A sudden spike in energy demand and a loss of natural gas, coal, nuclear, and wind energy during a winter storm triggered blackouts across the state.The National Weather Service on Monday reported that 150 million Americans were under various winter storm warnings, with heavy snow and ice still likely to sweep from the Southern Plains, to the Ohio Valley, to the Northeast.
Griddy addressed the contents of Khoury's lawsuit, filed in Houston on Monday, in a statement to the Dallas Morning News. A spokesperson for the company reportedly described the suit as "meritless" and expressed Griddy's intention to push back against it in court.
"We understand our customers' frustration. However, Griddy passes through the wholesale electricity price to customers without mark-up," the spokesperson, Lauren Valdes, reportedly said. "The prices charged are the direct result of the non-market prices ordered by the [Public Utility Commission of Texas] last week. The lawsuit is meritless and we plan to vigorously defend it."
People across Texas reported skyrocketing energy prices as a result of the storm, which caused a large portion of the state's isolated and deregulated power grid to fail. With much of its resources rendered inoperative, the Public Utility Commission of Texas ordered the state's main grid operators toof electricity to thousands of customers.
3 ways Texas could avoid another electricity crisis
The answer is not more fossil fuel power plants.When the cold front hit over the weekend, electricity use soared to heat buildings, but the grid couldn’t keep up with demand. Natural gas plants, which supply the majority of the state’s electricity, were not equipped to operate at such low temperatures. Despite widespread false claims spread on Fox News that frozen wind turbines were solely to blame for the blackout, failures at these gas plants are the main cause of the crisis, a spokesperson for ERCOT told Bloomberg.
Commissioners held an emergency meeting at the beginning of last week, while millions still did not have access to power, and approved a directive to adjust prices in a way that would "more accurately reflect the scarcity conditions in the market." Given that demand for electricity surpassed available supply, the commission also ordered the Electricity Reliability Council of Texas (ERCOT) to raise prices on previous services. ERCOT is responsible for operating most of Texas' electric grid.
Griddy shared frustration about the utility commission's price order in a statement issued late last week, noting that energy provided by wholesale electric retailers, such as itself, rely on market changes "to set prices, not political appointees." Market-based pricing can lead to increased costs on its own when demand for goods exceeds supply.
"We intend to fight this for, and alongside, our customers for equity and accountability – to reveal why such price increases were allowed to happen as millions of Texans went without power," the statement read.
ERCOT Power Outage Map, Updates As Texas Winter Storm Leaves 1.8 Million Without Power
Energy companies have been directed by the Electric Reliability Council of Texas to rotate power outages.Power Outage US reports that nearly two million Texans are without power as numerous energy providers implement controlled outages to control the flow of power. Texas is being hit by a winter storm and facing freezing temperatures and heavy snowfall.
Newsweek reached out to Khoury's attorney through Potts Law Firm, where he is employed, and Griddy for further comment, but did not receive replies in time for publication.
This story was updated at 6:34 p.m. ET with additional details and background information.
Fox News turns Winter Storm Uri into a cudgel to own the libs .
“It seems pretty clear that a reckless reliance on windmills is the cause of this disaster” in Texas, Tucker Carlson lied.As Vox’s Umair Irfan explained, the blackouts happened when the winter storm created a sudden spike in energy demand and hamstrung production of natural gas, coal, nuclear, and wind energy. The root problems (climate change aside) involve the state’s failure to winterize energy facilities and infrastructure in a region not accustomed to sustained freezing weather.