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Texas AG files lawsuit against Griddy Energy, says company was 'misleading and deceptive'

"Griddy was fully aware of the reality of the risk in its pricing scheme," the lawsuit claims.

HOUSTON — Attorney General Ken Paxton’s office on Monday announced the filing of a lawsuit against Griddy “for violating the Texas Deceptive Trade Practices Act through false, misleading, and deceptive advertising and marketing practices.”

Note: the video in this story is from Feb. 21 and reports on a Texas couple's $17K bill from Griddy

The lawsuit comes after ERCOT revoked the company’s right to operate over missed payments following the Texas freeze. The Texas Tribune reported that customers have now been switched to other providers.

ALSO READ: Astronomical electric bills causing domino effect across Texas energy market

The missed payments came after the costs for a megawatt hour of electricity jumped from an average of $35 to $9,000 during the height of the February winter storm that contributed to the near-collapse of the state’s power grid.

Griddy made headlines for sending massive bills to customers, and multiple lawsuits have already been filed. A Chambers County woman filed a class-action lawsuit accusing Griddy of price gouging. She says the company charged her more than $9,000 for the week of the storm instead of her usual $200 to $500 bill.

AG Paxton accuses Griddy of offering a service that cost many Texans thousands of dollars. On its Facebook page just before the winter storm, Griddy warned that its customers should switch to another provider because of the expected jump in costs.

Some customers praised Griddy for giving them a warning, but others on Facebook claimed they received the warning too late.

“Griddy misled Texans and signed them up for services which, in a time of crisis, resulted in individual Texans each losing thousands of dollars,” stated Paxton in a Monday morning press release. “My office will not allow Texans to be deceived or exploited by unlawful behavior and deceptive business practices.”

The lawsuit claims, "Griddy, the company that promised Texans cheap wholesale prices that would consistently beat traditional energy costs, blatantly contradicted these promotional representations as it auto-debited hundreds of dollars from Texans’ checking accounts daily. Griddy was fully aware of the reality of the risk in its pricing scheme..."

READ THE LAWSUIT: View the lawsuit in PDF format

The lawsuit is “seeking injunctive relief from Griddy to ensure that the Texans it serves will receive truthful and accurate energy service in the future, and to have the Court order refunds from available sources.”

In all, Texas electricity providers failed to make more than $2.1 billion in payments that were due to ERCOT, according to another market notice obtained by the Texas Tribune on Friday.

Harris County Attorney's response to lawsuit

Harris County Attorney Christian D. Menefee gave the following statement on the lawsuit the Attorney General of Texas filed against energy provider Griddy:

“I am glad to see today the Attorney General sued Griddy for its deceptive practices and its charging Texans, including Harris County residents, excessive electricity rates during Winter Storm Uri. This is but a first step to hold companies accountable for the suffering Texans experienced during and after the power grid failure. I am proud of my office’s efforts to protect Harris County residents from deceptive business practices—our county is leading the state on addressing the important issue of price gouging. Tomorrow, I am heading to Austin to testify before the Texas House’s Business and Industry Committee about changes they can make to the law to enable my office and other local governments to be more involved in the fight for consumer protection.