In theory, this was a great idea, playing chancy electricity rate roulette with Griddy Energy. Before the winter storm of 2021 Karen was doing alright on the “wholesale electricity” plan. Taking advantage of lower wholesale electricity prices makes sense. I won’t go out on a ledge and say Griddy Energy is a scam, but it would make a nice Casino game.
In some manner of looking at it, Griddy did what they promised – sold electricity at a fluctuating wholesale rate.
A lady named Karen said, “We did have to cancel service today, because the pricing is just too high.”
There comes a time when a skyrocketing electric service price starts to not make sense or be sound financial decision making.
Back in the summer of 2021 Karen from Tyler could have locked into a fixed Tyler Texas residential electric rate in zipcode 75703 for around 7.3 cents per kilowatt hour.
Karen, saw a bill from Griddy that lasted for 17 days of electric usage during the months of June 2021 and July 2021 for 7.4 cents per kWh. This rate was not a hedged fixed electric rate but still barely higher than a fixed rate she could have signed up for.
The wholesale electricity price was not as wholesale as she was led to believe. Other electric companies were offering fixed retail electric plans cheaper than the Griddy plan that seemed too not be as competitive.
By the time August rolled around Karen was sending in a 1 month electric bill for $270 which was more than she had ever paid a Tyler electric company. Even during hotter Augusts in prior years in Tyler she never had to cough up anywhere near the $270 Griddy required of her.
She came to the conclusion, fairly easily, that her 2021 winter storm bill of plus $800 was not ever going to be able to be recovered. Staying with the electric company in hopes of savings that would offset this winter loss just wasn’t going to happen.
The U.S. Energy Information Administration calculated the average Griddy electric rate over the course of 2021 was 81 cents per kWh!
Karen, had to quit with this energy provider and cut her losses. Unfortunately, since Texas wholesale electricity prices spiking up in price is what caused Griddy Energy to charge her so much she was not able to find a competitive electric plan at the time.
She ordered a short term fixed plan until the energy market in Texas worked things out. In the mean time she kept a close eye on her thermostat and tried her best not to use too much energy.
Some People Saved Money with Griddy Energy’s Unique Energy Demand Data
James Nabors from Paris Texas disagreed that Griddy was to blame, and he definitely has a point.
Griddy Energy was a different animal in the residential electric service market. The people that knew how to use Griddy Energy remind me of people that drive their cars by coasting and letting off the gas to save miles per gallon.
If you coast in a suburban like some of these people, they get 60 miles per gallon and more. There is a trade off as these drivers are micro-managing their every peddle pump in their car.
Griddy allowed people to manage their electric usage with real time data to take advantage of very low rates certain times of the day. If you liked micro-managing your energy account, you could potentially average down your per kWh rate to 5 cents per kWh or less.
James mentioned that on the low end he paid 2 cents per kilowatt hour and on the high end he paid 17 cents per kWh. He took Griddy’s warning and switched off before the storm hit and of course it helped that he was moving at the time so his energy would not have been in use during the winter storm.
One had to keep up with what was going on and not just sign up and forget it. I was actually moving at the time and was able to shut down my house with the GRIDDY account (now in the other house I’m glad it was still on a fixed rate during the storm) if GRIDDY started back up tomorrow I’d do everything exactly the same except maybe I’d open a separate dedicated bank account. * Because one of the complaints was that GRIDDY drained so many bank accounts due to the excessive rates during the event— when the balance reached a certain point it would draft a payment as per the agreement, this would happen multiple times a day during that period instead of about once a month like most people were used to before the storm.James Nabors, Paris Texas
The PUCT and ERCOT Scapegoated Griddy Some Believe
I know Griddy’s management was doing something underneath the surface (as we found out) wrong but I thought they got a very raw deal and were made to be the tangible scapegoat for what ERCOT and PUCT did horrifically wrong to everybody…. hope we can make that understood and see another GRIDDYesque type of company come into being. In two short years I went from paying as low as 2 cents (and less) to @17 cents a KwH.James Nabors, paris texas
The Public Utility Commission of Texas and the Electric Reliability Council of Texas were responsible for the Texas electric grid. The winter of 2021 they were solely to blame for the electric grid almost going down and for prices going so high.
The Texas government did not properly winterize the generators that would be used to keep the power plants operating in a harsh winter.
When winter 2021 in Texas turned into a blizzard out of a place like Siberia the Texas power plants were not equipped to handle it and this caused a supply demand issue that caused Texas wholesale electricity to go up in price several hundred percent.
Griddy Energy was a specialized type of retail electric provider that put all the power of controlling energy usage with the consumer. Texas electricity service that is not hedged or fixed will be cheap in price without insurance attached to it.
The trade off to no insurance on your electricity service is to watch the energy demand data very closely and to use your electricity based off of this information. Griddy informed customers regularly but they had to act on it.
Normally energy commodity traders would be managing energy purchases and hedging very closely for a retail electric provider to protect their customers. In a way Griddy provided the energy data to act on and let each residential electric service customer turn on or off or at least turn down their energy usage.
Texas wholesale electricity data that would normally be utilized by the retail electric provider was worded and delivered for the end user to utilize at their thermostat.
In theory, the idea would work if each individual user managed their account closely, but people are creatures of habit, and we forget. We just aren’t all made to be energy demand response automatons.
Using your residential electric service based on when the electric grid is in low demand times is a novel concept. People who save, budget, and know how to squeeze every dime took advantage of this. In the end the Attorney General of Texas sued Griddy Energy and their customers were given to a different electric company.
Donny has been writing about the deregulated energy markets since early 2007. His knowledge has helped consumers lower their electricity cost.