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Volkonski
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Post Big Freeze Lawsuits

#1

Post by Volkonski »

Texas woman who received $9,300 electricity bill files class-action lawsuit against wholesale electricity provider Griddy
A Chambers County resident filed a class-action lawsuit against electricity retailer Griddy on Monday, accusing the provider of price gouging customers during last week’s freeze. She is seeking $1 billion in relief for affected customers.


https://www.texastribune.org/2021/02/23 ... ce=twitter
Attorneys for Lisa Khoury said in the lawsuit that her bill spiked to $9,340 the week of the storm, compared to her average monthly bills that range from $200 to $250. Griddy drafted payments from Khoury’s bank account several times, according to the lawsuit, pulling $1,200 before she blocked further charges from her bank. She still owes thousands.

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.

But because of a price hike fueled by a shortage of supply and skyrocketing demand, some customers were faced with bills charging tens of thousands of dollars. While electricity bills are likely to rise across the board, Texans on variable rate plans faced immediate and alarmingly high prices.

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.
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tek
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Re: Post Big Freeze Lawsuits

#2

Post by tek »

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.
Thus combining the economic genius of Larry Kudlow with the mathematical insight of Art Laffer.
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Re: Post Big Freeze Lawsuits

#3

Post by raison de arizona »

I'm honestly having trouble ginning up as much sympathy as I should for some of these folks with high electricity bills. Some of them didn't understand what they were signing up for, and were probably just told that it was cheaper, but many knew exactly what they were doing. They just didn't think they'd get caught. I know someone on a fixed rate contract in TX, she's had friends over the years point out that they are paying less for their electricity than she is with their variable rate contract. But who wants to play the market with their electricity bill? In a regulated world, maybe such plans shouldn't be allowed, or anyone who signs up for it should sign some kind of waiver stating that they understand that electricity prices can go WAY up and they have no control over it. But come on. They want to take advantage of the low rates a variable contract offers when they're low, but not be responsible when they go high? How does that work? The only mitigating factors, to me, are 1) I suspect many people didn't understand what they were signing up for, and 2) really? We're going to go this far with deregulation? They can just up the price to whatever they want? I mean, clearly they can.
Texans with variable-rate electricity contracts could be paying astronomical prices for power right now
Fixed-rate customers with power could see retail providers offering incentives for them to cut back.

HOUSTON — If you’ve been lucky enough to have power these past few days, you need to take a look at your electric contract.

If you’re on a variable-rate plan, you could be looking at an enormous bill at the end of the month.

But if you have a fixed-rate contract, your retail provider may be trying to get you to leave, or at least cut back.

When you sign a contract with an electricity provider, you get two options: a fixed-rate plan or a variable-rate plan.

The fixed-rate plan locks you into a set price per kilowatt hour of electricity.

A variable-rate plan charges you based on the current wholesale price of power, where supply and demand determines the rate.

This week’s extremely cold weather increased customers’ demand, while at the same time, generators lost the ability to provide the supply.

“That’s right. It’s a lot like shorts and puts in the stock market,” said Fred Anders who runs the website texaspowerguide.com.

He says the price of power went from 3 to 8 cents per kilowatt hour, to as much as 900 cents per kilowatt hour.

“For the average home in Texas, it translates to roughly $450 a day if they didn’t curtail their usage at all,” Anders said.

But for customers on fixed-rate plans who never lost power, it was the opposite.

Their retail electric providers still had to provide power for them which cost hundreds of times more than the fixed rate in the contracts.
https://www.khou.com/article/news/local ... 6952e277b1

All one has to do to not get screwed is to choose *not* play the market with their electricity bill.
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tek
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Re: Post Big Freeze Lawsuits

#4

Post by tek »

A variable-rate electric plan with no guardrails is insane.

A variable-rate electric plan with no guardrails and the ability to instantly withdraw your money before you even know what you're paying is criminal.

Freedom!
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Re: Post Big Freeze Lawsuits

#5

Post by zekeb »

It could be price gouging on the part of the wholesaler. I have a hunch that Griddy was gouged as well. Once upon a time there was a proposal to allow consumer choice when I lived in Oregon. It didn't make it through the legislature. I can see where this would increase competition, but there were no safeguards such as a 30 day notice of a rate increase. Deregulation of public utilities has never served the public. This 100 year freeze won't happen again for another 15 or 20 years, so they won't spend any real money on anything. Let the next generation worry about it.
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Re: Post Big Freeze Lawsuits

#6

Post by raison de arizona »

tek wrote: Tue Feb 23, 2021 4:14 pm A variable-rate electric plan with no guardrails is insane.

A variable-rate electric plan with the ability to instantly withdraw your money before you even know what you're paying is criminal.

Freedom!
Exactly, and they willingly signed up for it. :roll:
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Re: Post Big Freeze Lawsuits

#7

Post by raison de arizona »

zekeb wrote: Tue Feb 23, 2021 4:14 pm It could be price gouging on the part of the wholesaler. I have a hunch that Griddy was gouged as well. Once upon a time there was a proposal to allow consumer choice when I lived in Oregon. It didn't make it through the legislature. I can see where this would increase competition, but there were no safeguards such as a 30 day notice of a rate increase. Deregulation of public utilities has never served the public. This 100 year freeze won't happen again for another 15 or 20 years, so they won't spend any real money on anything. Let the next generation worry about it.
Ten years, there is a video that I can't put my finger on of a TX rep on the state floor from ten years ago after the last big TX freeze explaining that they needed to do something about winterizing their electricity generation, because in "one year or ten years this is going to happen again." And he nailed it. But of course nothing was done, because deregulation. Completely preventable.
“Remember, democracy never lasts long. It soon wastes, exhausts, and murders itself. There never was a democracy yet that did not commit suicide.” —John Adams
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Re: Post Big Freeze Lawsuits

#8

Post by sugar magnolia »

As far as I've heard, Griddy is the only company who sent warnings and recommended their customers switch to another company with fixed rates before the shit ever hit. If any company comes out of this in a decent position, I hope it's them.

https://www.griddy.com/post/letter-from ... and-prices
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Re: Post Big Freeze Lawsuits

#9

Post by raison de arizona »

“Remember, democracy never lasts long. It soon wastes, exhausts, and murders itself. There never was a democracy yet that did not commit suicide.” —John Adams
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Re: Post Big Freeze Lawsuits

#10

Post by neonzx »

In Florida, a group called "Citizens for Energy Choices" rounded up enough signatures to place an constitutional amendment on our 2020 general election ballot. Fortunately, the state Supreme Court booted it from the ballot stating it was "misleading to the voters" --
Florida power rates are among the lowest in the nation. I'll stick with regulated.
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Re: Post Big Freeze Lawsuits

#11

Post by AndyinPA »

Not exactly lawsuit, but definitely post-big freeze.

https://www.texastribune.org/2021/02/23 ... ce=twitter
Five board members of the Electric Reliability Council of Texas — the entity that manages and operates the electricity grid that covers much of Texas —will resign on Wednesday, according to a notice to the Public Utility Commission. A sixth has withdrawn his application to the board.

All six live outside of Texas.
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Re: Post Big Freeze Lawsuits

#12

Post by Frater I*I »

neonzx wrote: Tue Feb 23, 2021 6:02 pm In Florida, a group called "Citizens for Energy Choices" rounded up enough signatures to place an constitutional amendment on our 2020 general election ballot. Fortunately, the state Supreme Court booted it from the ballot stating it was "misleading to the voters" --
Florida power rates are among the lowest in the nation. I'll stick with regulated.
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Re: Post Big Freeze Lawsuits

#13

Post by Foggy »

All six live outside of Texas.
:roll:
Out from under. :thumbsup:
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Re: Post Big Freeze Lawsuits

#14

Post by Chilidog »

AndyinPA wrote: Tue Feb 23, 2021 6:57 pm Not exactly lawsuit, but definitely post-big freeze.

https://www.texastribune.org/2021/02/23 ... ce=twitter
Five board members of the Electric Reliability Council of Texas — the entity that manages and operates the electricity grid that covers much of Texas —will resign on Wednesday, according to a notice to the Public Utility Commission. A sixth has withdrawn his application to the board.

All six live outside of Texas.
So they are not even residents of the state?
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Re: Post Big Freeze Lawsuits

#15

Post by sugar magnolia »

Chilidog wrote: Wed Feb 24, 2021 8:31 am
AndyinPA wrote: Tue Feb 23, 2021 6:57 pm Not exactly lawsuit, but definitely post-big freeze.

https://www.texastribune.org/2021/02/23 ... ce=twitter
Five board members of the Electric Reliability Council of Texas — the entity that manages and operates the electricity grid that covers much of Texas —will resign on Wednesday, according to a notice to the Public Utility Commission. A sixth has withdrawn his application to the board.

All six live outside of Texas.
So they are not even residents of the state?
Under the by-laws of the board, they don't have to be.
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Re: Post Big Freeze Lawsuits

#16

Post by Chilidog »

Are any of them.... "Yankees?"

LOL

Wow.

This is Reacher Gilt level grift!
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Re: Post Big Freeze Lawsuits

#17

Post by woodworker »

Yes, but let us not ignore the best part of the variable rate scam -- now that they have been hit with outrageous bills, they want the Feds to come in and pay them. Once again, privatize profits and socialize losses. Let the State of Texas, which at least for the moment has stopped making noises about secession, pay those bills and/or let those consumers file bankruptcy.
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Re: Post Big Freeze Lawsuits

#18

Post by PaulG »

https://www.texastribune.org/2021/02/23 ... ce=twitter
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.
This makes no sense. The power simply wasn't there. Giving them cash wouldn't affect their inability to provide power. Plus why $9? A nice round number? Why not add 50 cents and see what happens? And the implication is that the price is whatever the PUC sets it at. That can't be right. All together, it sounds like price gouging by some business one or more of the board members was running on the side.

ETA: add link
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Re: Post Big Freeze Lawsuits

#19

Post by Fiascoist »

Looks like a bait and switch type situation. Low monthly rates until something happens and then a whopper.. So they brag about how cheap things are because of deregulation until they aren't. And then whine about it and making someone else pay these exorbitant amounts instead of having a monthly bill somewhat higher without the big "kicker" every once in a while. I am all for either there starts to be regulation or the power companies eat it. I sure don't see any groundswell to pay a portion of my electric bills.
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Re: Post Big Freeze Lawsuits

#20

Post by Volkonski »

Most gas is sold under long term contracts. The rest is sold via the spot market. When supply exceeds demand the spot market price can drop below contracted prices. When demand exceeds supply spot market prices jump. This is driven by gas customers who for whatever reasons are willing to pay whatever is needed to get gas.

What the PUC feared was that gas powered electricity plants would not increase electricity production if they had to buy expensive spot market gas in order to do so. So to create an incentive to produce more electricity the price of that electricity was raised. Now spread over the entire grid this increment of expensive electricity was no big deal for most customers. However, there were some few electricity customers whose electricity prices were tied directly to the spot market prices. They always pay spot market prices. That's good most of the time. Last week it was awful.

If they could average out their payments over a few years they might still come out ahead. However, being ordinary residential customers, they don't have the resources to absorb sudden large bills.

Those who live by the spot market shall die by the spot market. :?
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Re: Post Big Freeze Lawsuits

#21

Post by Volkonski »



David Lee
@davejourno
A Dallas County woman just now sued
@Oncor
&
@ERCOT_ISO
in state court over #TexasBlackouts & #WinterStormUri, claims her paralyzed 70yo mom's "skin stuck to the plastic surface" due to the cold. I'll have more details in tonight's CNS Dallas State Report
@CourthouseNews

Image
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Re: Post Big Freeze Lawsuits

#22

Post by raison de arizona »

The family of the eleven year old that froze to death filed suit.
Family of 11-year-old boy who died in Texas deep freeze files $100 million suit against power companies
Cristian Pineda's mother found him dead in their freezing mobile home.

Texas power providers Electric Reliability Council of Texas (ERCOT) and Entergy Corporation have been hit with a $100 million lawsuit accusing them of gross negligence in the death of a child whose family suspects he suffered hypothermia when they lost electricity and heat in their mobile home during a historic cold snap.

The mother of 11-year-old Cristian Pineda filed the wrongful death lawsuit in Jefferson County District Court, alleging the utility giants "put profits over the welfare of people" by ignoring previous recommendations to winterize its power grid, which sustained an epic failure last week and left more than 4 million customers without heat and electricity as temperatures in some parts of the state plunged to single digits.

"Despite having knowledge of the dire weather forecast for at least a week in advance, and the knowledge that the system was not prepared for more than a decade, ERCOT and Entergy failed to take any preemptory action that could have averted the crisis and were wholly unprepared to deal with the crisis at hand," the lawsuit states.

Cristian died on Tuesday in his family's mobile home in the Houston suburb of Conroe while sharing a bed with his 3-year-old brother under a pile of blankets in an attempt to stay warm, according to the lawsuit.

“This is a young man who died for no reason other than corporate decisions," the Pineda family attorney Tony Buzbee told ABC News on Sunday. "There are a lot of decisions that were made a long time ago that led to the death of this young man. That is unacceptable."

As of Sunday, more than 30 people had died in Texas in the past week due to the severe weather, including many from carbon monoxide poisoning after people used cars or generators to keep warm during the massive power outage, according to state officials.

Buzbee said he now represents seven families who lost loved ones as a result of the severe weather and said more lawsuits will be filed against the power companies.

"Cristian’s lawsuit is the first and his lawsuit should be the first," Buzbee said. "This kid is going to change Texas and God bless him for that."
https://abcnews.go.com/US/family-11-yea ... d=76030082
https://www.courthousenews.com/wp-conte ... pineda.pdf
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Re: Post Big Freeze Lawsuits

#23

Post by zekeb »

As a personal injury lawyer I once ran with said, "kids aren't worth much monetarily."
Il factotum
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