HOUSTON, March 15, 2021 /PRNewswire/ -- Griddy Energy LLC ("Griddy" or the "Company") announced today that it has filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code in the Southern District of Texas, together with a proposed plan of reorganization – a key feature of which is to give releases to former customers with unpaid electricity bills. Griddy sought court protection after financial devastation related to the actions of the Electric Reliability Council of Texas ("ERCOT") during and after Winter Storm Uri.
"Prior to Winter Storm Uri, Griddy was a thriving business with more than 29,000 customers who saved more than $17 million dollars since 2017. The actions of ERCOT destroyed our business and caused financial harm to our customers," said Griddy Chief Executive Officer Michael Fallquist. "Our bankruptcy plan, if confirmed, provides relief for our former customers who were unable to pay their electricity bills resulting from the unprecedented prices. ERCOT made a bad situation worse for our customers by continuing to set prices at $9,000 per megawatt hour long after firm load shed instructions had stopped. Our customers paid 300 times more than the normal price for electricity during this period."
Griddy did not profit from the winter storm crisis. Griddy provides customers access to real-time wholesale electricity prices, allowing them to monitor and adjust electricity usage. Griddy neither influences nor controls the price of electricity; prices are passed on to customers without mark-up. Griddy only earns the same $9.99 monthly membership fee regardless of the fluctuations in price of electricity.
Prior to the unprecedented market events that resulted in prices staying at $9,000 per megawatt hour for 87.5 hours, the real-time electricity price had only reached that level for a total of 3 hours since 2015. Potomac Economics, the Independent Market Monitor, has now reported in a letter to the Public Utility Commission of Texas ("PUCT") that ERCOT's failure to remove the price cap in accordance with the intent of the PUCT price order was "inappropriate pricing intervention" that resulted in $16 billion in additional costs.
"We built Griddy to improve an antiquated industry by giving our customers access to wholesale pricing, real-time data and the ability to help balance the grid while lowering their own bills. Our model worked in August 2019 and would have worked in February 2021, had the grid not failed and the regulators not intervened," said Co-founder, Gregory Craig. "No retail energy provider or consumer should have to forecast and protect against such extreme and unforeseeable circumstances. We firmly believe in our model but, in order for it to be successful, the grid has to function properly, and prices have to be set by market forces. The actions of ERCOT caused our customers to unnecessarily suffer and caused irreparable harm to our business."
The Company filed routine motions to establish its ability to move the chapter 11 case forward expeditiously. As part of its first day relief, the Company is seeking to establish a bar date for claims. The Company also will be seeking approval of its proposed disclosure statement and confirmation of its chapter 11 plan of reorganization within 80 days from filing.
More information about Griddy's Chapter 11, including access to Court documents, will be available at https://cases.stretto.com/Griddy or contact Stretto, the Company's noticing and claims agent, at 855.478.2725 (toll-free) or 949.471.0997 (international).
Griddy is represented by Baker Botts LLP as legal counsel. Griddy is represented by Crestline Solutions, LLC and Scott Pllc as public affairs advisors.