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Griddy Is Shutting Down

griddy.com

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Re: Griddy Is Shutting Down

#5

Post by Analemma_ »

fastball wrote: post #3

Not a fan of this. People buying electricity at wholesale prices is on them.

I disagree completely. This business model should never have been allowed to exist, in the same way and for the same reason that "almost fully self-driving cars" should not be allowed on the roads: humans are just not capable of quickly and correctly responding in situations where 99.99% of the time no input is required and once in a blue moon you have to act immediately to avoid disaster.

Good riddance.

Re: Griddy Is Shutting Down

#6

Post by rococode »

Their Wikipedia page has more context, seems like those stories of Texans getting $1000+ electricity bills and the recent class-action lawsuit involved this company (I'd only seen headlines and didn't know the company's name until now):

https://en.wikipedia.org/wiki/Griddy

Griddy is an American power retailer that sells energy to people in the state of Texas at wholesale prices for a $10 monthly membership fee and has approximately 29,000 members. The company itself is based in California.

During the 2021 Texas power crisis, Griddy received attention for urging its customers to leave the company. Some Griddy customers signed up for wholesale variable rates plans allowed by the Texas deregulated electricity market, found themselves facing over $5,000 bills for five days of service during the storm.

The Electric Reliability Council of Texas caps the wholesale price of electricity at $9,000 per megawatt-hour, which translates to $9 per kilowatt-hour. Customers had seen the wholesale rates hit that high previously in August 2019, but only for a 90 minute period, which the company then noted was an unprecedented long time at that price. During the February 2021 storm wholesale rates, and therefore Griddy's rates, were at the maximum for about four days. On February 15, during the power crisis, the state's Public Utility Commission required ERCOT to set the price to the $9,000 maximum. The commission reasoned that the trading prices for energy (as low as $1,200) were inconsistent with the supply scarcity. The following week, one Chambers County customer filed a proposed class action lawsuit alleging price gouging and seeking $1B in relief.

On February 26, ERCOT ejected Griddy from the Texas market for nonpayment.

Re: Griddy Is Shutting Down

#8

Post by RcouF1uZ4gsC »

People need to realize that managing risk costs money. As an individual consumer, you are many times better have paying a little extra for something in exchange for reducing your exposure to risk.

Do things that de-risk your life. Make sure your health coverage is good, and not just the cheapest insurance plan. Make sure you have life insurance.

Re: Griddy Is Shutting Down

#9

Post by bpodgursky »

fastball wrote: post #3

Not a fan of this. People buying electricity at wholesale prices is on them.

The problem here as I understand it is that ERCOT stepped in and artificially set an absurdly high wholesale price, to try to stimulate production. And then Griddy was forced to pass this price straight down to their customers. The narrative about this being a "market failure" seems really wrong.

Really seems like it should be on TX to make the customers whole here, given that they ordered Griddy to pass along huge amounts of money to producers for days.

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