Howard and Nena Mamou eat dinner at their home in the Glenwood neighborhood in Hutto, Texas, Tuesday, Feb 16, 2021. Credit: Ricardo B. Brazziell / Austin American-Statesman via AP

FORT WORTH, Texas — The offer seemed almost too good to be true: Sign up for a low Costco-like membership fee, pay market prices for electricity and potentially save big on utility bills. That’s what drove Roland Whitaker, a Decatur rancher and oil worker, to enroll with electricity provider Griddy after hearing an advertisement on radio station WBAP.

For Whitaker, who cares for about 175 head of cattle along with horses and goats, the savings were significant: at least a few thousand dollars per year. He didn’t quite understand how it all worked, but his family was thrilled to have the extra money to invest in the ranch.

“I’m not the only person — I can promise you that — who had never even thought about it,” Whitaker said. “We’re all just thinking: We’re saving all this money, let’s just go with it.”

The winter storm and the near-collapse of the Texas power grid changed that calculation for thousands of Texans, particularly Griddy’s 29,000 customers vulnerable to the accompanying spike in wholesale, or real-time market, electricity prices. They are a small fraction of energy consumers, since most residents are signed up for fixed rates through retail electric providers, electric cooperatives or municipal utilities.

With freezing temperatures blanketing Texas, power generators went down, leading to a scarcity of electricity amid an unprecedented statewide demand for heat. On Feb. 15, this reality led the Public Utility Commission of Texas to order wholesale prices raised to the cap of $9 per kilowatt-hour — a more than 10,000 percent increase from the week before. The commission oversees the Electricity Reliability Council of Texas, the nonprofit charged with managing the electrical grid.

Wholesale prices lingered around $9 for days, a phenomenon that previously lasted for only a few hours per year, typically during summer heat waves or when several generators went down at once.

“I didn’t know it could shoot up that fast or that high or for that long,” said Krystle LeMay, a Bedford resident whose 586 square-foot apartment cost her more than $1,000 with Griddy — despite her not being at home during the crisis. “I had no idea that that was even possible, and if I did, I really would not have ever joined.”

As millions of residents suffered through power outages and bursting pipes, Griddy customers scrambled to find other electricity providers, most of which refused to transfer accounts until after the electricity crisis subsided. The company originally urged customers to switch to another provider on Feb. 13.

Jim Lukehart, a pilot who lives in Whitewright near Sherman, was able to switch to another provider late last week. Despite his best efforts to conserve energy, the bill for Lukehart’s “energy vampire” home was already up to nearly $10,000, and he expected it to rise to at least $12,000.

“We were trapped, we couldn’t get out,” Lukehart said. “Some people were told by other electric providers that they have to be in good standing with their power company to switch so they still can’t get out of this.”

In the aftermath of the crisis, more than a dozen North Texans have contacted the Fort Worth Star-Telegram to detail the toll that massive electricity bills have taken on their finances, families and mental health. Whitaker, who took in his best friend’s family during the storm, was among them.

By Friday, Whitaker was on the hook for nearly $15,000 in combined charges for his home and barn. He also agreed to a deferred payment plan offered by Griddy that requires him to pay off his balance in increments across five months, and stay with the company during that time.

Whitaker now regrets the decision, but felt he had to sign the agreement in order to ensure that his household had electricity.

“It’s the sickest I’ve ever been,” Whitaker said. “Just the thought of: If we ain’t got electricity, what are we gonna do? What are my kids gonna do? What are our animals gonna do? My wife has seen a big difference in me over the past six days. I’m just not the same.”

Lauren Valdes, a spokesperson for Griddy, told the Star-Telegram on Friday that the company is “focusing all of our efforts on helping our customers — in the near and long future.” She did not answer specific questions regarding complaints about customer service, payment plans or a lack of price protection for consumers.

Relief on the way?

As news outlets report on the desperation of Griddy customers, state officials have jumped into action. Gov. Greg Abbott convened a group of legislators on Saturday to discuss bipartisan relief measures. On Sunday, the Public Utility Commission announced that, for a short period, companies cannot disconnect customers from electricity due to nonpayment.

“The issue about utility bills and the skyrocketing prices that so many homeowners and renters are facing is the top priority for the Texas Legislature right now,” Abbott said at a news conference.

During its meeting, commissioners also urged providers to delay invoicing residents until high bills could be addressed. However, many Griddy customers have already had money withdrawn from their accounts automatically. Michelle Squires, who lives in Rendon, had $800 withdrawn from her bank account last week before she was able to find an electricity company to switch her meter over. She eventually called her bank to ask for a stop on auto payments to Griddy, which would have totaled above $4,000, she said.

“I couldn’t sleep for two days because I would wake up and hear the air or the heat come on, and I just think, ‘I can’t afford the heat to come on right now,’” Squires said. “I couldn’t leave until I paid the balance in full. My response to them was: You told me I should leave your service, but you’re preventing me from leaving your service because I can’t pay $4,000 today, and I do not want a switch hold.”

Squires intends to pay what she owes to Griddy but could not agree to the deferred payment plan terms. To avoid charges on their debit or credit accounts, some people bought $100 Visa gift cards from Target and added that card number to their online accounts, according to Whitaker.

There is also the chance that Griddy customers find some relief from Attorney General Ken Paxton, whose office has been inundated with price gouging complaints. Paxton joined the chorus on Friday by issuing civil investigative demands, or records requests, to ERCOT and 11 energy companies, including Griddy.

“It gives me hope that eventually the rates will be adjusted down to a reasonable rate and we may not be responsible for the enormous amounts,” Lukehart said on Sunday. “I would be fine if they told me I had to pay 25 cents a kilowatt-hour or even 30 cents, just not an average of three dollars.”

Griddy wrote in a Friday statement that it was engaging with the commission and ERCOT to seek financial relief for its customers, which would be paid out dollar-for-dollar as they receive it.

“At the time this press release is being issued, wholesale prices in ERCOT have become negative and our customers are currently being paid to be on our platform,” a company press release reads. “Griddy is working to win relief for its customers and continue offering innovative products and services in the retail energy market in Texas.”

Companies, government sharing the blame

Among former and current Griddy customers, there are mixed views on whether the company is responsible for the peril faced by wholesale electricity buyers.

In its Friday statement, Griddy said that many customers who left for other electricity providers have begun to return to its service. Amanda Sicard of Princeton said that the main culprits were ERCOT and the Public Utility Commission.

“Mismanagement and the greed of corporations lining their pockets and paying fines, instead of winterizing our resources, failed us,” Sicard wrote in an email. “Griddy is fighting for us. I chose to stay with Griddy. I’m already seeing prices reflect back to why I signed up with them. They are going to bat for us and I hope they can stay on their feet and in business. It’s not their fault.”

While prices have returned to normal, several former customers say Griddy could have done more to communicate the risks of the market and not require those with outstanding balances to sign payment plan agreements that keep them with the company, which LeMay equated to being “held hostage.”

“I never got an email or any urgent call or text about the warning,” wrote Floria Kiscellus of North Richland Hills, whose electricity went out for 30 hours. “I think there must be laws and oversight for energy wholesalers that do business in the state of Texas and that they must provide basic safeguards for consumers against potential catastrophic market volatility.”

LeMay added that Griddy often provided names of companies that were not accepting customers switching from other electricity providers. She and Tonya Hodge, a former customer who lives in Woodway near Waco, agree that they will never go the wholesale route for electricity again.

“I do not think it should be an option because people are going to end up in the same spot that we’re in now,” Hodge said. “It could be great for a while, but at some point, it’s going to come back and bite you. It’s almost inevitable.”

What the Legislature decides to do in regards to retail electricity providers, which includes giants like TXU and Reliant as well as smaller providers, will have consequences reaching far beyond Griddy customers. Market experts widely expect several small providers to go under after paying wholesale prices they could not afford to meet demand.

Matthew Sherman, who formerly used Griddy to power his Arlington home, switched to Eligo Energy long before the current crisis. Shortly before the storm rolled in, company officials asked Texans to find another provider, with one customer service representative telling Sherman that she was unsure of if Eligo could ever work in Texas again.

He is now with TXU, the provider of last resort that must accept customers from folding companies because they are power generators as well as electricity providers. But Sherman hopes lawmakers will take action to prevent the biggest corporations from taking over more of the electricity market.

“If the small providers stay in the market and they continue to provide better deals than what I can find with the big players, I will continue to pursue them,” Sherman said. “A lot of what I do depends on what the state Legislature does. I’d like to see them do something meaningful and significant, and what that looks like ultimately will decide what a lot of us consumers choose to do.”

Story by Haley Samsel, Fort Worth Star-Telegram