Texas woman sues Griddy after being charged $9,546 for 19 days of power
arstechnica.com
arstechnica.com
They also sent out an email on the 13th to all customers, basically telling everyone to leave. It should have been sent out earlier (you had to leave by 3:00 to do a same-day switch; I received it at 2:47), but by that evening I was switched to another provider (though it didn't take effect until the 15th)
Until this month, I always saved money (except for August 2019). What did they expect Griddy to do? They weren't taking profit when ERCOT prices were low; the customers were getting those savings. It's like a different take on "privatize the profits, socialize the losses"
Shouldn't the vendor offer a spend limit? People here say it's unacceptable for cloud providers to not have spend limits for their web apps.
What do you do when the limit is hit? I suspect people wouldn't want AWS to start turning off EC2 instances, let alone have your electricity simple turn off. (though rolling over the balance to the next month, presumably when it will be cheaper might have been an option)
I am reminded of the predatory lenders that marketed sub-prime mortgages to the masses in the ‘00s. Yes, you can be moderately cognizant of the risks and naively sign up thinking you’re getting a good deal —- but is it ethical on the seller’s part to peddle something that has the potential to bankrupt swaths of everyday people if they’re is a once in-an-every 10-20 year event?
On the surface level this absolutely does appear to fall under "Price Gouging during a crisis", but I suspect that the defendant here will claim it was more "The cost of delivering power to you at all was much higher than normal given the circumstances, the alternative would be leaving you without power at all"
I don't have direct experience with Griddy but I was working with some people in Texas recently. One of them was on a Real-Time pricing schedule for his electricity. He could monitor his prices using a phone app down to to a very granular level, I think 15-minute intervals. It may have even been minute by minute adjustments.
I think the existence of that sort of knowledge for the users might play into the decision of this lawsuit. If the claimant has a high level of transparency into their pricing over time and just were not paying attention and continued to use electricity as normal, they may not have much of an argument here.
No, no, no, no, this is absurd. You can't sue energy markets for "price gouging" when spot prices shoot up. Do you sue your broker for price gouging when there is a price spike in a stock? What about wheat? If you don't want to be exposed to spot pricing, don't play in the spot markets.
This is why energy consumers are historically kept out of spot energy markets and instead get their energy from utilities. The utilities offer stable pricing but in exchange the long run price you pay is higher -- you are paying for that stability. The whole point of griddy is that instead of getting your power from a regulated utility which must get government approval of price hikes, you think you can do better by being charged market spot prices.
It's true that market pricing is usually below the fixed prices charged by utilities but at the same time you bear the risk of spikes.
Thus to call this "price gouging" is absurd as griddy does not choose prices administratively but passes on the spot price to their consumers. That's the whole point of griddy.
These people signed up to be exposed to the market price in order to be free of stable pricing, as administrative pricing is higher, on average, than volatile spot pricing.
They had no problem enjoying the cost savings when market prices were lower, but now they want to sue when market prices shot up? If you can't handle the volatility of spot markets, then don't sign up for services like griddy and go with regular utilities that have administrative pricing.
This lawsuit exists, so obviously you can.
I agree with you though, anyone who is buying spot priced electricity ought to know better. However if you read the article you'll see part of the lawsuit alleges that the customers did not in fact fully understand what they were getting into with Griddy and that Griddy did not do enough to ensure that they understood it.
There is definitely some kind of case to be made here, and there is some lawyer supporting it, so we'll see how it shakes out.