Texas electric grid council ends operations of power company Griddy, Bloomberg reports
The Electric Reliability Council of Texas on Friday cut Griddy Energy’s access to the state’s power network, according to a Reuters report.
The council, the operator of the state’s major power grid, ended, because of nonpayment, Griddy’s ability to operate in the Texas electricity market, according to a Bloomberg report that referred to a market notice. Griddy, which charged customers for wholesale electricity prices, has been the recipient of complaints of high bills during last week’s period of low temperatures, ice and snow.
The council has moved Griddy’s customers to other utilities, according to a statement from Griddy sent to customers on Saturday. Retail power providers who do not pay invoices within 72 hours can have customers reassigned to other companies, known as the “provider of last resort,” according to the company statement.
“We still believe our model can play a critical part in the future of sustainable energy,” Griddy wrote to customers. “It’s better for the consumer and better for the grid. But it seems we’ll have to wait a bit longer to see a true demand-response solution become viable.”
The company’s business model relies on a low monthly membership fee. Customers paid wholesale market prices for electricity that are often below the fixed rate set by other electric providers.
That equation shifted significantly during President’s Day weekend, when the company urged its 29,000 customers to find another provider that would not expose them to the volatility of the market. Most Texans pay fixed rates for electricity through retail electric providers, electric cooperatives or municipal utilities.
Wholesale prices shot up by 10,000%, to the price cap of $9 per kilowatt-hour, for days during the storm, a phenomenon that had usually been limited to a few hours per year during summer heat waves.
Former and current customer reactions to the announcement were mixed, with some angry that the Public Utility Commission, which oversees ERCOT, had not stepped in to save Griddy. Kevin Young, a former Griddy customer, blamed the commission for “arbitrarily” raising the price to $9, referring to a decision on Feb. 15 in which the commission instructed ERCOT to adjust the market price to reflect scarcity.
“I hope that Texans wake up to the beauty of wholesale electricity,” Young wrote in an email. “My all time rate with Griddy was $.094 per kilowatt hour and even though I could probably find better rates with contracts, I like the freedom Griddy gave me with no contracts and the power to decide how much I wanted to save.”
Challenges faced by former Griddy customers should not be “brushed under a rug” by state officials, wrote Candi Aulbaugh. She added that customers deserve answers about how the folding of the company will affect their power and their credit.
Floria Kiscellus of North Richland Hills echoed the open questions surrounding Griddy: What happens to their unpaid bills, which numbered into the thousands for many customers? The episode has shown Kiscellus, a Griddy customer who left the platform in February, that ERCOT and the commission have too much “unbridled control” over the electrical grid.
“Knowing what I know now about the Texas power grid and all the various players, I think someone should have prevented businesses like Griddy from coming into the Texas power market in the first place,” Kiscellus wrote in an email. “Their business model was never designed for this type of event and their customers were hurt very badly because of it.”
This developing story has been updated.
This story was originally published February 26, 2021 at 10:43 PM.
