Settlement Reached In Texas PUC Proceeding Addressing Sought Revocation Of Griddy Energy REP Certificate -- EnergyChoiceMatters.com

Settlement Reached In Texas PUC Proceeding Addressing Sought Revocation Of Griddy Energy REP Certificate

April 25, 2022

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Reporting by Paul Ring • ring@energychoicematters.com

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Staff of the Public Utility Commission of Texas, Griddy Energy LLC, ERCOT, and OPUC have reached a settlement concerning Staff's petition to revoke the retail electric provider certificate of Griddy

Under the settlement, Griddy's REP certificate would be revoked, but the PUC would not impose any administrative penalties on Griddy

The TDUs are unopposed to the settlement.

Staff's petition was made after Griddy defaulted at ERCOT and was subject to a mass transition in the wake of winter storm Uri in 2021. Griddy subsequently declared bankruptcy. The bankruptcy proceeding addressed the impact on customers, including releasing customers from outstanding bills (see details here)

The settlement states that, "Considering the unprecedented facts and circumstances that gave rise to the default, Commission Staff will not seek any administrative penalties from Griddy for the violations asserted in this agreement or petition for revocation."

The settlement also states that Griddy asserts that all customer advance payments held in Griddy's segregated cash account were refunded to customers by March 15, 2021, such that Griddy no longer holds any funds belonging to its former customers. Because all obligations related to customer deposits or advance payments received by Griddy were satisfied through the refunds issued from Griddy's segregated cash account, all funds from Griddy's $10,000 letter of credit posted with the PUC per 16 TAC § 25.107(f)(2)(B) were returned to Griddy on March 31, 2022.

The settlement states that, "Until Winter Storm Uri, Griddy never had any issues with respect to its financial obligations to either the Commission or ERCOT or the timely payment of its invoices."

The settlement states that, "As part of the bankruptcy proceedings, Griddy proposed a Chapter 11 liquidation plan (the Plan) that provided as much relief as possible to both its customers and creditors. On July 7, 2021, the Bankruptcy Court confirmed Griddy's Plan and the Honorable Marvin Isgur, the judge overseeing Griddy's chapter 11 case, specifically noted that, based on everything he has seen, the winter storm event and the attendant failures were not Griddy's fault."

The settlement also states that, "During these unprecedented market conditions [between February 12, 2021 and February 19, 2021], Griddy prioritized the interests of its customers and took actions to try and protect those customers. As a result of Griddy' s proactive outreach efforts, nearly 10,000 customers (representing more than one-third (1/3) of Griddy's customer base) switched before February 15, 2021."

The settlement also states that, "Prior to Winter Storm Uri, Griddy was solvent and had provided its customers an aggregate savings over $17 million since 2017 as compared to the Energy Information Agency Texas average."

The settlement states that, "Griddy does not admit any fault or wrongdoing associated with any of the events described within this agreement and/or that took place during or as a result of Winter Storm Uri of February 2021. Griddy asserts that any and all of Griddy' s alleged failures were caused or contributorily caused by the actions of others outside of Griddy' s control. Griddy enters this agreement in the spirit of compromise to settle all matters before the Commission to liquidate the estate pursuant to the Plan."

Docket 51859

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