Friday, May 7, 2021

Power Provider Griddy Defends Itself After Ban From Operating in Texas Amid Storm Furor

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Wholesale retail electric provider Griddy Electric missed required payments to the Electric Reliability Council of Texas (ERCOT), resulting in Griddy losing its right to operate in the state while about 10,000 customers were transitioned to other services.

“It was not a choice that we made,” Griddy defended itself in a statement posted to Twitter Friday.

According to a market notice, Griddy’s market participation was officially revoked that same day under ERCOT protocols due to a “payment breach.”

The move comes after Texans suffered days’ long power outages caused by unusually severe winter weather, with residents facing devastating electric charges worth thousands of dollars.

Griddy was among the providers that sent out huge bills, shocking customers.

“We have always been transparent and customer-centric at every step,” Griddy’s statement said. “We wanted to continue the fight for our members to get relief and that hasn’t changed.”

Griddy explained why the charges were so high in a February 18 blog post, stating the Public Utility Commission of Texas (PUCT) demanded that ERCOT raise prices to $9/kWh to reflect scarcity of supply during the storm—but then PUCT kept those high prices even after power started turning back on for Texans.

“As of today, 99% of homes have their power restored and available generation was well above the 1,000 MW cushion,” the blog post read. “Yet, the PUCT left the directive in place and continued to force prices to $9/kWh, approximately 300x higher than the normal wholesale price.”

Griddy charges $10 per month to its customers. However, some customers were facing costs close to $10,000 for the week of the storm, according to The Texas Tribune.

texas power
Electric provider Griddy has been banned as of Friday from operating in the Texas market due to missed payments, and customers will be transitioned to other providers. A transmission tower supports power lines after a snow storm on February 16, 2021 in Fort Worth, Texas.
Ron Jenkins/Getty Images

Griddy’s exclusion from the market is the latest in what is becoming a massive financial fallout in Texas caused by the severe storm.

ERCOT announced in another market notice Friday that overall, Texas electric providers failed to make $2.12 billion in required payments. Electric providers normally pay ERCOT, which operates the state’s electric grid, according to the Tribune. More payments were owed than usual this time around because of the spike in cost for each hour of electricity spurred by the winter storm.

ERCOT has now decided to crack down on its unpaid bills, prompting Griddy’s shutdown in the Lone Star State.

“On the same day when ERCOT announced that it had a $2.1 billion shortfall, it decided to take this action against only one company that represents a tiny fraction of the market and that shortfall,” Griddy said in its statement Friday.

ERCOT said on Friday it would use $800 million from a revenue account to cover some of the shortfall, according to The Wall Street Journal, leaving a gap of $1.32 billion it will need to make up.

On Wednesday, ERCOT issued an apology to Texans for the severe blackouts amid mounting lawsuits from frustrated residents.

Newsweek has reached out to PUCT, ERCOT and Griddy for comment.

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