[Just Filed. Developing Story] March 15, 2021 – Griddy Energy LLC (“Griddy” or the “Debtor”) filed for Chapter 11 protection with the U.S. Bankruptcy Court in the Southern District of Texas, lead case number 21-30923 (Judge Isgur). The Debtor, a provided of retail electric service to homes and businesses in Houston and various other locations in Texas, is represented by David R. Eastlake of Baker Botts LLP.
The Debtors’ lead petition notes between 1 and 50 creditors; estimated assets between $1.0mn and $10.0mn; and estimated liabilities between $10.0mn and $50.0mn. Documents filed with the Court list the Debtors’ three largest unsecured creditors as (i) ERCOT ($29.0mn contingent, unliquidated, disputed energy claim), (ii) CenterPoint Energy, Inc ($1.2mn transportation charges claim) and (iii) CenterPoint Energy, Inc.($1.2mn transportation charges claim).
The Debtor, actually headquartered in Westbury Connecticut, used a subscription model whereby customers pay the wholesale cost of energy plus a "$9.99 monthly membership fee regardless of the fluctuations in price of electricity."
In an emphatic message to customers to NOT pay their bills (which will certainly be heard by other electricity consumers and their suppliers), the gritty Debtor uses its homepage to advise: "Under our bankruptcy proposed plan, a key feature is to give releases to former customers with unpaid electricity bills."
Driving home its attack on ERCOT, the Debtor (which has already had its customers transitioned to new providers by ERCOT), continues to advise its former customers: "Many companies have already reported or will report massive losses due to the extreme circumstances last week. While Texas used to be able to boast hundreds of providers and thousands of plans, that freedom of choice could drop to a handful of the traditional, big players. Texas was a trailblazer in deregulation, but it seems we might be going back to the giant monopolies dictating the rules.
If you think this loss of choice and innovation is harmful to the future of energy, let your voice be heard. This doesn’t just affect Griddy and our members. It can have lasting impact for years to come. Email or call the PUCT or your local representatives and demand that they create a fair marketplace for innovation and choice."
In a press release announcing the filing, Griddy that: “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.
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.
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.
The Debtors’ CEO Michael Fallquist commented further: “The actions of ERCOT destroyed our business and caused financial harm to our customers. 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."
The Debtor's Co-founder, Gregory Craig, added "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. 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."
About the Debtor
According to the Debtor: “The Debtor provided retail electric service to homes and businesses in Houston and various other locations in Texas by purchasing power at the market rate and arranging delivery on transmission and distribution lines thereby connecting purchasers directly to the wholesale price of electricity. The Debtor’s primary office is located in Westport, CT.
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The post Griddy Energy LLC – Texas Electricity Retailer Files Chapter 11, Intends to Release Former Customers with Unpaid Bills, Blames ERCOT (above Winter Storm Uri) for “Financial Devastation,” Urges Texans to Reject Future of “Giant Monopolies” appeared first on Daily Bankrupt Company Updates | Bankrupt Company News.