AUSTIN — Griddy Energy, the disgraced, bankrupt retail power provider banned from selling electricity in the ERCOT market, filed to intervene in a lawsuit that upended emergency pricing that doomed the company.
The company filed a motion that could involve it in a sprawling lawsuit that put billions of dollars in play in a fight over sky-high electricity prices during the 2021 winter storm.
A recent ruling from an Austin appeals court reignited long-dormant talk of possible repricing of electricity that Texas power grid regulators artificially set at the highest possible price under ERCOT rules.
Griddy — like the lead plaintiff in the suit it seeks to join, Irving-based Vistra Energy subsidiary Luminant — has challenged the validity of Public Utility Commission orders that pegged the price at $9,000 per megawatt-hour. It is challenging a $30 million claim that the Electric Reliability Council of Texas is seeking from the company in bankruptcy court.
“This Court’s determination of the validity of the Orders is critical to establishing the proper rate, which is a necessary predicate to vindicating Griddy’s rights in bankruptcy and challenging ERCOT’s proof of claim,” the Griddy motion states.
For four frigid days, the Public Utility Commission ordered electricity to be sold at the $9,000 rate believing it would entice all able power plants to come online and help restore power to the millions of Texans without it. That price is roughly 300 times the cost per megawatt on a normal day.
In the aftermath of the storm, ERCOT’s independent market monitor said the decision resulted in $16 billion in overcharges that many Texans will be paying off for decades via electricity bills.
The prices sent several electric companies into bankruptcy after the storm.
But Griddy emerged as a punching bag after news broke of its monthly bills that charged some customers $5,000 for electricity provided during the week of the deadly freeze. Griddy sold electricity at a variable rate that led to customers bearing the full brunt of the PUC’s emergency pricing.
The 3rd Court of Appeals ruled on March 17 that the Public Utility Commission’s orders violated the state’s Public Utility Regulatory Act. Electricity prices under the act, judges ruled, are governed first and foremost by the free market.
The Public Utility Commission has appealed the ruling to the Texas Supreme Court, arguing that the 3rd Court’s ruling is a slippery slope that would undo all ERCOT market rules and lead to a wild west electricity market.
No hearings have been set in the PUC appeal. A spokeswoman for the grid regulator said the PUC does not comment on pending litigation.
The PUC voted to challenge the 3rd Court of Appeals ruling on March 23. Their action continues to underline a conflict between the commissioners, who are all appointees of Gov. Greg Abbott, and Lt. Gov. Dan Patrick, who hailed the ruling.
“We were right,” Patrick said following the ruling. “Texas electric utility customers got the short end of the stick.”
The stewing political power grid conflict between the state’s top two Republicans has bubbled up amid this year’s legislative session with the Senate’s passage of a slate of bills that would dramatically affect how power is bought and sold in the ERCOT electricity marketplace.
Meanwhile, Abbott’s appointees at the PUC have soldiered on in an effort to implement an overhaul of the grid market that they hope will encourage private investment in new natural gas-fired power plants.