Griddy Energy, the Texas electricity startup that buckled under last month's winter storm, files for bankruptcy
Griddy Energyhas filed for Chapter 11 bankruptcy.
- The startup was removed from
Texas' power grid after high charges during the winter storm.
- Griddy is also facing lawsuits from the state of Texas as well as proposed class-action suits.
Griddy Energy LLC, which faced scrutiny and lost customers after the Texas winter
The bankruptcy filing comes after Griddy was banned from taking part in Texas' electricity markets, which effectively shuttered the startup, according to Insider's reporting.The filing, submitted to the US Bankruptcy Court for the Southern District of Texas, comes after lawsuits from the state of Texas as well as proposed class-action suits against the company.
Griddy wanted to disrupt Texas' energy market by giving customers access to electricity at wholesale rates, which, for the most part, tend to be lower than market price for consumers.But harsh storms in February caused massive issues for the state's power grid and energy prices skyrocketed-both for business wholesale customers and those Griddy customers who'd previously enjoyed lower costs.
Griddy had 29,000 customers in the aftermath of the storm, per the Houston Chronicle. The Chronicle also reported that prices climbed as high as $9,000 per megawatt-hour after the storm. Customers enrolled in auto-billing faced outsized charges.The state of Texas is suing Griddy Energy and its holding company over claims it engaged in deceptive trade practices. The filing contends that "Griddy was fully aware of the reality of the risk in its pricing scheme - sky-high energy rates at a time when consumers are the most vulnerable." The filing also notes that Griddy's auto-billing system resulted in many customers over-drafting their accounts, sometimes without their knowledge. The Wall Street Journal reported that the bankruptcy filing is intended to allow Griddy to "wind down its business," and that the energy provider is planning to waive some of the charges associated with the severe weather.
A spokesperson for Griddy was not immediately available to comment on the bankruptcy filing, but the company posted a statement to its website addressed to its members.
"A company couldn't ask for more amazing members," the statement reads. "We set out to spark a community and get people excited about energy - and y'all didn't disappoint. Even during this insanity, so many of you have supported and defended Griddy and our shared vision. Our model plays a critical part in the future of sustainable energy. It's better for the consumer and better for the grid. But it seems we'll have to wait a bit longer."
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