Upstart Texas power retailer Griddy Energy LLC, devoid of customers and facing litigation after charging hefty amounts during the winter freeze that swept the state last month, is planning to file for bankruptcy, people familiar with the matter said.
Griddy is preparing to wind down its business through a bankruptcy filing that could come within days, according to people familiar with the matter. Texas regulators have already barred Griddy from the state power market after the company passed steep increases in electricity prices on to customers during last month’s energy crisis.
While most consumers in Texas buy electricity at fixed rates from municipal utilities and power retailers, Griddy offered access to variable electricity prices that skyrocketed during the extreme winter weather. When spot prices briefly shot up to $9,000 per megawatt hour during the winter freeze, compared with an average last year of less than $22, Griddy customers complained of receiving exorbitant bills, part of a broader backlash over how regulators and market participants handled the weather emergency.
Representatives for Griddy didn’t respond to requests for comment on Sunday.
The Electric Reliability Council of Texas, which operates the state’s grid, revoked Griddy’s operating rights and transferred its customers elsewhere last month after it defaulted on required payments.
