8 ms·

Woman who received $9,300 electric bill sues wholesale electric provider

24 points by burlesona 6y ago

7800 6y ago
This is a good example of overlitigiousness.
- deleted 6y ago
  [deleted]
mxcrossb 6y ago
> Griddy warned its 29,000 customers last week of impending price hikes and encouraged them to seek out other electric providers. I’m surprised how much Griddy is in the news despite having so few customers.
- csours 6y ago
  1. People connected their bank and credit card accounts directly to Griddy 2. It appears that Griddy bills pretty frequently so people could watch their accounts drop in real time 3. The numbers are REALLY dramatic. Even if people get their money back, losing $17,000 makes a huge impact
bpodgursky 6y ago
Of the things you could sue Griddy for, price gouging seems... silly. They're literally just passing along the wholesale price, not taking a profit from the spikes. You could try to sue for negligence or not informing customers or whatever. But they simply are not gouging. Edit: Also, I didn't appreciate that this wasn't even a market spike. The Texas government literally set a ludicrously high price, to try to boost supply: > Texas’ Public Utility Commission, appointed by Abbott, raised the wholesale market price of electricity to $9 per kilo-watt hour — a 7,400% increase over the average 12 cents per kilo-watt hour — in response to rising demand. The hope was power generators would be enticed to produce more electricity. So the charge is even more ridiculous that it first appears. Griddy is literally passing on the price set by the state government — and which they in turn were paying to suppliers.
- kevin_b_er 6y ago
  Well they don't understand they were gouged by the grid itself.
- munk-a 6y ago
  They did actually try and warn customers - though the efficacy of that warning might be debatable.
  - bpodgursky 6y ago
    Yeah. I think suing here is dumb and premature, given that the state gov is likely going to make the customers whole anyway. But even if you have to sue right now, this seems like a bad approach.
- gruez 6y ago
  >So the charge is even more ridiculous that it first appears. Griddy is literally passing on the price set by the state government — and which they in turn were paying to suppliers. On the other hand... >Unlike many state price gouging statutes, [Texas’ Deceptive Trade Practices Act] does not contain an exception for increased costs https://www.natlawreview.com/article/don-t-mess-texas-price-gouging-lone-star-state https://www.natlawreview.com/article/don-t-mess-texas-price-...
  - bpodgursky 6y ago
    I guess the logical conclusion is to also sue the wholesale energy producers for charging the state-mandated inflated price.
- enkid 6y ago
  I'm not an expert on electric power, but it seems like a pretty elastic good in the short term. Would bumping the price up so dramatically actually have an impact on supply?
  - gruez 6y ago
qeternity 6y ago
Classic. People like floating rates when rates are low. News at 10. It will be interesting to see how the courts treat this. She’s suing over price gouging, which is a grey area anyway, but seems very difficult to prove when the grid was on the verge of collapse. Power prices are volatile because it’s (for all intents and purposes) an immediately perishable good.
- munk-a 6y ago
  I wonder how much money she saved on an average bill - 10k is a lot of money, but if she's been getting advantageous rates for years and years this might not even put her into the red overall.
  - qeternity 6y ago
    She won’t see it this way and neither will the pitchfork equipped public. Even if it puts her in the red, I hope the courts don’t succumb to the populism.
  - DavidPeiffer 6y ago
    "...if she's been getting advantageous rates for years and years this might not even put her into the red overall." I agree on a whole, but this doesn't align with the day to day reality for many people with these huge bills. With a large percent of the country unable to pay an unexpected $400 bill and living paycheck to paycheck, they won't have the long-term net savings there ready for a time like this. Instead they're in a sudden financial bind roughly equivalent to crashing a car and having it not covered by insurance. People are really bad at understanding low probability events. People had never seen prices in that realm before. Multiply the two, and here we are.
    - munk-a 6y ago
      This is pretty much precisely why I'm socialist leaning - it's much easier to force regular savings in the government than to expect people to independently manage their finances in a responsible manner. And everyone from the poorest to the richest is occasionally bankrupted by a sudden unexpected hurricane. I understand the red scare left people thinking that any kind of socialism will instantly turn into bread lines but I think that allowing more government oversight to make sure those who are left shafted by the tribulations of life get some assistance is the only real ethical choice.
chickenpotpie 6y ago
This thread is oddly critical of people being upset that they were charged 5 figure amounts during a recession for something critical to survival
- munk-a 6y ago
  Contracting with an electric wholesaler is precisely what free-marketers do to try and save a buck and cut out that meddlesome utility middleman. You're giving up the stability of a pooled service in favor of shaving a bit off the price - this normally works in your favor except when it doesn't, and in this case it really doesn't. I wouldn't say I'm critical of those people, I'm critical of the extremist laissez faire policies in Texas that led to this disaster in general and electricity wholesalers in particular. I am, however, critical of folks who would bemoan medicaid and disaster relief funds until it hits them - in this particular case I don't know enough about the individuals to judge - but asking for 1 billion in damages is pretty extreme if they lost 9k and were one of just 29k customers.
  - p1mrx 6y ago
    I think Griddy sounds like an innovative service, one I'd consider using if I had the equipment necessary to drop off-grid when prices are high. The problem is that they sold it to people who didn't understand the risks, and if that weren't the case, they would probably have too few customers to support the business model.
- qeternity 6y ago
  How is it critical to say people should honor their commitments? Recession or not, we are a nation of laws. There are plenty of fixed rate providers. She opted to take this risk to save a few cents/kwh the rest of the time. This is the trade off.
  - chickenpotpie 6y ago
    Have you considered that a lot of the people who take the flexible pricing do it because they couldn’t afford fixed pricing and they had literally no other option?
elihu 6y ago
"Griddy passes wholesale electricity rates directly to customers, who in turn pay the company $10 a month. This differs from fixed-rate electricity plans which offer a consistent rate regardless of market conditions." Seems like this is just what the customer agreed to, if there isn't some price cap in their contract. Which isn't to say that the situation isn't awful or that I wouldn't investigate legal options if I were given a bill like that.
- deleted 6y ago
  [deleted]
p1mrx 6y ago
Look at Griddy's marketing from last year: https://web.archive.org/web/20201201084406/https://www.griddy.com/ https://web.archive.org/web/20201201084406/https://www.gridd... The "Price spike occurrence" section says that prices exceed $1/kWh 0.1% of the time, but it's really not clear what level of financial risk you're signing up for. Maybe even Griddy wasn't aware of the risks. In hindsight, nobody should have signed up for this service unless they had a backup generator and a system to automatically disconnect based on price.
Nican 6y ago
Why was there not an upper limit on the price that customers are willing to pay? This seems to fall in the same category of AWS customers accidentally having bills enough to bankruptcy.
- gruez 6y ago
  In another thread people mentioned that there are strict laws regarding when you can cut off customers (eg. not when it's cold outside), so placing an upper limit isn't an option because griddy has no way of turning their customers off.
  - wmf 6y ago
    In retrospect, Griddy should be paired with a smart breaker that the customer can shut off based on the price. Shutting off your own power doesn't really help in a life-or-death scenario though.
outside1234 6y ago
This is probably a good place to point out that regulation has its purposes. There is no way there should be a retail pricing regime in place where someone can end up with a bill like this for critical lifesaving infrastructure -- and that means regulated caps on prices.
cecida 6y ago
It's a microcosm of the hellscape that results when critical infrastructure is broken into tiny parts for profit.
uberduper 6y ago
The PUC made a huge mistake here. If the goal was to increase supply, they should have only increased the rate on supply above the average of the previous N hours. If a supplier was generating 1000kw for the last 12 hours, then if they increase that to 1100kw then that extra 100kw should have been at a higher rate. All the PUC did here was give a tremendous amount of money to power suppliers that had already failed. I spent a lot of time watching the ERCOT real time system conditions page. Prior to the beginning of the blackouts, there was ~65GW of capacity. Within 6 hours of the rolling blackouts, capacity dropped to ~45GW and remained there for the duration of the crisis. The increase in rate did nothing to increase supply.
- maxerickson 6y ago
  The high rate would encourage large consumers on variable rates to shut down, with the difference getting purchased by operators with regulatory obligations to supply power to their customers. (not saying that effect would be big, just enumerating another aspect of it)
nafizh 6y ago
Griddy has vowed to fight the raised prices, saying, “The market is supposed to set the prices, not political appointees.” This criticism by the company is oddly funny given that it’s Texas, the ‘bastion’ of free market.
anotherQuarter 6y ago
I’m a griddy customer and am still happy with the service after this past week. Griddy is not for everyone not by a long shot but I think it’s getting unfair press on this past week. As a Griddy customer I wanted to share some additional perspective: Griddy’s app provides real-time prices as well as the projected prices for the next couple days. During the past week i was getting notifications every five minutes on the current price. Their interface shows your daily energy usage in terms of kwh as well as price. The whole point of being a customer at griddy is to reduce power use during spikes. They do a great job providing data on when you need to reduce usage. It’s in their interest for customers to have this data. As far as i can tell they only make their money from the $10 monthly fee. High prices don’t help them. In the end we essentially unpowered everything. We charged phones, left our modem/router on and kept our gas furnace set to 59. With blankets it was fine for us and we knew this was a possibility going into this plan (minus the extra difficulty of covid) I think it’s disingenuous to have these articles about high bills without providing how much energy they were consuming and what they were using it on. Even at $9/kwh a $9000 bill would more energy usage in a couple days than we have in a month or more (we live in 4 bed house)
- maxerickson 6y ago
  It seems overwhelmingly likely that most of it was used for heat. 1,000 kWh seems like plenty for a few days though.
  - anotherQuarter 6y ago
    Oh for sure, especially if they had electric heat instead of gas. I just think a more rounded article would speak to the usage not just the final price.
rektide 6y ago
Did consumers have real-time information available to make n informed decision? Was that information only available online, because if so I can imagine a lot of folks not being able to make an informed choice- their connectivity could be cut in these extreme circumstances. Were there any notification systems available to consumers, or was there any ability to set a cut-off point? My expectation is that consumers had nearly no power in this equation. I'm trying to think of some kind of circumstances that would make this system not arbitrary & predatory, and looking for some kind of tools or options to defend Griddy with, frankly. But I expect consumers got no visibility, no warnings, had no optional safeguards for themselves.
- anotherQuarter 6y ago
  They provide real-time information through their app and also online. Here are some examples of what that looks like https://www.griddy.com/texas/app https://www.griddy.com/texas/app. They also provided warnings to customers days before that spikes were coming. I'm not sure what additional communication could be asked for. If losing power killed your internet then you really don't need to worry about power consumption anymore. If you lost it for another reason then it would make sense to assume energy was still expensive until you heard otherwise. They provided daily update emails/tweets during the storm as well. I imagine it's not legal to have a cut-off point where suddenly you have your power removed.
debug-desperado 6y ago
My brother is a Griddy customer and he probably didn't realize just how high the ceiling was on wholesale electricity prices. Griddy sent out alerts a few days before the storm and encouraged customers to switch providers, but that of course wasn't feasible on such short notice. The electric coop in town needed about a week to activate service. He did what he could instead: turn off water, drain faucets, set thermostat as low as feasible, unplug everything, and move his family into my parents for the week. He's still looking at a colossal electricity bill this month, but thankfully nowhere near as much as this woman. The last minute escape plan worked out in the end. Not everyone in Texas had these options unfortunately.

24 points by burlesona 6y ago

7800 6y ago

This is a good example of overlitigiousness.

deleted 6y ago
[deleted]

mxcrossb 6y ago

> Griddy warned its 29,000 customers last week of impending price hikes and encouraged them to seek out other electric providers. I’m surprised how much Griddy is in the news despite having so few customers.

csours 6y ago
1. People connected their bank and credit card accounts directly to Griddy 2. It appears that Griddy bills pretty frequently so people could watch their accounts drop in real time 3. The numbers are REALLY dramatic. Even if people get their money back, losing $17,000 makes a huge impact

bpodgursky 6y ago

Of the things you could sue Griddy for, price gouging seems... silly. They're literally just passing along the wholesale price, not taking a profit from the spikes. You could try to sue for negligence or not informing customers or whatever. But they simply are not gouging. Edit: Also, I didn't appreciate that this wasn't even a market spike. The Texas government literally set a ludicrously high price, to try to boost supply: > Texas’ Public Utility Commission, appointed by Abbott, raised the wholesale market price of electricity to $9 per kilo-watt hour — a 7,400% increase over the average 12 cents per kilo-watt hour — in response to rising demand. The hope was power generators would be enticed to produce more electricity. So the charge is even more ridiculous that it first appears. Griddy is literally passing on the price set by the state government — and which they in turn were paying to suppliers.

kevin_b_er 6y ago
Well they don't understand they were gouged by the grid itself.
munk-a 6y ago
They did actually try and warn customers - though the efficacy of that warning might be debatable.
- bpodgursky 6y ago
  Yeah. I think suing here is dumb and premature, given that the state gov is likely going to make the customers whole anyway. But even if you have to sue right now, this seems like a bad approach.
gruez 6y ago
>So the charge is even more ridiculous that it first appears. Griddy is literally passing on the price set by the state government — and which they in turn were paying to suppliers. On the other hand... >Unlike many state price gouging statutes, [Texas’ Deceptive Trade Practices Act] does not contain an exception for increased costs https://www.natlawreview.com/article/don-t-mess-texas-price-gouging-lone-star-state https://www.natlawreview.com/article/don-t-mess-texas-price-...
- bpodgursky 6y ago
  I guess the logical conclusion is to also sue the wholesale energy producers for charging the state-mandated inflated price.
enkid 6y ago
I'm not an expert on electric power, but it seems like a pretty elastic good in the short term. Would bumping the price up so dramatically actually have an impact on supply?
- gruez 6y ago

qeternity 6y ago

Classic. People like floating rates when rates are low. News at 10. It will be interesting to see how the courts treat this. She’s suing over price gouging, which is a grey area anyway, but seems very difficult to prove when the grid was on the verge of collapse. Power prices are volatile because it’s (for all intents and purposes) an immediately perishable good.

munk-a 6y ago
I wonder how much money she saved on an average bill - 10k is a lot of money, but if she's been getting advantageous rates for years and years this might not even put her into the red overall.
- qeternity 6y ago
  She won’t see it this way and neither will the pitchfork equipped public. Even if it puts her in the red, I hope the courts don’t succumb to the populism.
- DavidPeiffer 6y ago
  "...if she's been getting advantageous rates for years and years this might not even put her into the red overall." I agree on a whole, but this doesn't align with the day to day reality for many people with these huge bills. With a large percent of the country unable to pay an unexpected $400 bill and living paycheck to paycheck, they won't have the long-term net savings there ready for a time like this. Instead they're in a sudden financial bind roughly equivalent to crashing a car and having it not covered by insurance. People are really bad at understanding low probability events. People had never seen prices in that realm before. Multiply the two, and here we are.
  - munk-a 6y ago
    This is pretty much precisely why I'm socialist leaning - it's much easier to force regular savings in the government than to expect people to independently manage their finances in a responsible manner. And everyone from the poorest to the richest is occasionally bankrupted by a sudden unexpected hurricane. I understand the red scare left people thinking that any kind of socialism will instantly turn into bread lines but I think that allowing more government oversight to make sure those who are left shafted by the tribulations of life get some assistance is the only real ethical choice.

chickenpotpie 6y ago

This thread is oddly critical of people being upset that they were charged 5 figure amounts during a recession for something critical to survival

munk-a 6y ago
Contracting with an electric wholesaler is precisely what free-marketers do to try and save a buck and cut out that meddlesome utility middleman. You're giving up the stability of a pooled service in favor of shaving a bit off the price - this normally works in your favor except when it doesn't, and in this case it really doesn't. I wouldn't say I'm critical of those people, I'm critical of the extremist laissez faire policies in Texas that led to this disaster in general and electricity wholesalers in particular. I am, however, critical of folks who would bemoan medicaid and disaster relief funds until it hits them - in this particular case I don't know enough about the individuals to judge - but asking for 1 billion in damages is pretty extreme if they lost 9k and were one of just 29k customers.
- p1mrx 6y ago
  I think Griddy sounds like an innovative service, one I'd consider using if I had the equipment necessary to drop off-grid when prices are high. The problem is that they sold it to people who didn't understand the risks, and if that weren't the case, they would probably have too few customers to support the business model.
qeternity 6y ago
How is it critical to say people should honor their commitments? Recession or not, we are a nation of laws. There are plenty of fixed rate providers. She opted to take this risk to save a few cents/kwh the rest of the time. This is the trade off.
- chickenpotpie 6y ago
  Have you considered that a lot of the people who take the flexible pricing do it because they couldn’t afford fixed pricing and they had literally no other option?

elihu 6y ago

"Griddy passes wholesale electricity rates directly to customers, who in turn pay the company $10 a month. This differs from fixed-rate electricity plans which offer a consistent rate regardless of market conditions." Seems like this is just what the customer agreed to, if there isn't some price cap in their contract. Which isn't to say that the situation isn't awful or that I wouldn't investigate legal options if I were given a bill like that.

deleted 6y ago
[deleted]

p1mrx 6y ago

Look at Griddy's marketing from last year: https://web.archive.org/web/20201201084406/https://www.griddy.com/ https://web.archive.org/web/20201201084406/https://www.gridd... The "Price spike occurrence" section says that prices exceed $1/kWh 0.1% of the time, but it's really not clear what level of financial risk you're signing up for. Maybe even Griddy wasn't aware of the risks. In hindsight, nobody should have signed up for this service unless they had a backup generator and a system to automatically disconnect based on price.

Nican 6y ago

Why was there not an upper limit on the price that customers are willing to pay? This seems to fall in the same category of AWS customers accidentally having bills enough to bankruptcy.

gruez 6y ago
In another thread people mentioned that there are strict laws regarding when you can cut off customers (eg. not when it's cold outside), so placing an upper limit isn't an option because griddy has no way of turning their customers off.
- wmf 6y ago
  In retrospect, Griddy should be paired with a smart breaker that the customer can shut off based on the price. Shutting off your own power doesn't really help in a life-or-death scenario though.

outside1234 6y ago

This is probably a good place to point out that regulation has its purposes. There is no way there should be a retail pricing regime in place where someone can end up with a bill like this for critical lifesaving infrastructure -- and that means regulated caps on prices.

cecida 6y ago

It's a microcosm of the hellscape that results when critical infrastructure is broken into tiny parts for profit.

uberduper 6y ago

The PUC made a huge mistake here. If the goal was to increase supply, they should have only increased the rate on supply above the average of the previous N hours. If a supplier was generating 1000kw for the last 12 hours, then if they increase that to 1100kw then that extra 100kw should have been at a higher rate. All the PUC did here was give a tremendous amount of money to power suppliers that had already failed. I spent a lot of time watching the ERCOT real time system conditions page. Prior to the beginning of the blackouts, there was ~65GW of capacity. Within 6 hours of the rolling blackouts, capacity dropped to ~45GW and remained there for the duration of the crisis. The increase in rate did nothing to increase supply.

maxerickson 6y ago
The high rate would encourage large consumers on variable rates to shut down, with the difference getting purchased by operators with regulatory obligations to supply power to their customers. (not saying that effect would be big, just enumerating another aspect of it)

nafizh 6y ago

Griddy has vowed to fight the raised prices, saying, “The market is supposed to set the prices, not political appointees.” This criticism by the company is oddly funny given that it’s Texas, the ‘bastion’ of free market.

anotherQuarter 6y ago

I’m a griddy customer and am still happy with the service after this past week. Griddy is not for everyone not by a long shot but I think it’s getting unfair press on this past week. As a Griddy customer I wanted to share some additional perspective: Griddy’s app provides real-time prices as well as the projected prices for the next couple days. During the past week i was getting notifications every five minutes on the current price. Their interface shows your daily energy usage in terms of kwh as well as price. The whole point of being a customer at griddy is to reduce power use during spikes. They do a great job providing data on when you need to reduce usage. It’s in their interest for customers to have this data. As far as i can tell they only make their money from the $10 monthly fee. High prices don’t help them. In the end we essentially unpowered everything. We charged phones, left our modem/router on and kept our gas furnace set to 59. With blankets it was fine for us and we knew this was a possibility going into this plan (minus the extra difficulty of covid) I think it’s disingenuous to have these articles about high bills without providing how much energy they were consuming and what they were using it on. Even at $9/kwh a $9000 bill would more energy usage in a couple days than we have in a month or more (we live in 4 bed house)

maxerickson 6y ago
It seems overwhelmingly likely that most of it was used for heat. 1,000 kWh seems like plenty for a few days though.
- anotherQuarter 6y ago
  Oh for sure, especially if they had electric heat instead of gas. I just think a more rounded article would speak to the usage not just the final price.

rektide 6y ago

Did consumers have real-time information available to make n informed decision? Was that information only available online, because if so I can imagine a lot of folks not being able to make an informed choice- their connectivity could be cut in these extreme circumstances. Were there any notification systems available to consumers, or was there any ability to set a cut-off point? My expectation is that consumers had nearly no power in this equation. I'm trying to think of some kind of circumstances that would make this system not arbitrary & predatory, and looking for some kind of tools or options to defend Griddy with, frankly. But I expect consumers got no visibility, no warnings, had no optional safeguards for themselves.

anotherQuarter 6y ago
They provide real-time information through their app and also online. Here are some examples of what that looks like https://www.griddy.com/texas/app https://www.griddy.com/texas/app. They also provided warnings to customers days before that spikes were coming. I'm not sure what additional communication could be asked for. If losing power killed your internet then you really don't need to worry about power consumption anymore. If you lost it for another reason then it would make sense to assume energy was still expensive until you heard otherwise. They provided daily update emails/tweets during the storm as well. I imagine it's not legal to have a cut-off point where suddenly you have your power removed.

debug-desperado 6y ago

My brother is a Griddy customer and he probably didn't realize just how high the ceiling was on wholesale electricity prices. Griddy sent out alerts a few days before the storm and encouraged customers to switch providers, but that of course wasn't feasible on such short notice. The electric coop in town needed about a week to activate service. He did what he could instead: turn off water, drain faucets, set thermostat as low as feasible, unplug everything, and move his family into my parents for the week. He's still looking at a colossal electricity bill this month, but thankfully nowhere near as much as this woman. The last minute escape plan worked out in the end. Not everyone in Texas had these options unfortunately.