A proposed class action alleges MidAmerican Energy Services’ attempts to minimize its exposure to Texas power grid price spikes during Winter Storm Uri has left fixed-price plan customers with grossly high electric bills.
The plaintiff, a Royse City, Texas recycled plastics business, alleges in the 20-page complaint that it received from MidAmerican nearly two months after the devastating storm a statement that included “several new and unusual line-items,” including “supplemental” charges from the week of the storm that totaled $53,661.78.
MidAmerican, an arm of Berkshire Hathaway Energy, supplies electricity in deregulated markets nationwide and boasts 60,000 customers, the case begins. Per the suit, MidAmerican has about 15,000 commercial, residential and industrial customers in Texas.
The plaintiff originally chose MidAmerican as its energy supplier because the defendant promoted and advertised its fixed-price retail electric supplier agreement as a “nice, simple, and straightforward approach to offering electricity,” the lawsuit says. The plaintiff claims in the suit that MidAmerican “flowed with assurances,” and the company purposefully switched over to the defendant to avoid a variable rate plan after going through price fluctuations caused by the winter freeze of 2011.
From February 11 through February 19, 2021, Winter Storm Uri devastated Texas, and more than 4.5 million electricity customers were left without power, the case continues, noting that the region was ill-equipped to handle sub-freezing temperatures, snow and ice. As the situation became critical, two major decisions with regard to electricity demand—i.e., the announcement of rolling blackouts and the application of a high system-wide offer cap that boosted electricity prices to $9,000 per MWh—were implemented to avoid a total power grid collapse, according to the case.
“Overall, during the winter storm, nearly $50 billion in electricity sales were carried out, which is equal to the previous three years’ combined sales,” the suit says.
On April 7, nearly two months after the storm, the plaintiff received an “atypical invoice” from MidAmerican that contained the usual charges but also eight additional charges labeled as “supplement ancillary services.” Per the complaint, the plaintiff was charged a total of $74,834.91, with $53,661.78 in these extra costs. The plaintiff says it had conserved energy during Winter Storm Uri and “only [had] the minimal amount of machinery running idle to keep the plant and equipment from freezing.”
The case contends that MidAmerican neither defined supplemental ancillary services in its initial agreement with the plaintiff nor provided any explanation of the charges in the business’s April 2021 invoice. From the suit:
“MidAmerican was aware of the possibility of price fluctuations and spikes, given the historical impact of inclement weather on electricity. In Summer 2019 and Winters 1989, 2011, and 2014, electricity prices soared because of weather. Indeed, MidAmerican provided customers with the option of selecting service plans with a Fixed Price to avoid ERCOT price volatility. MidAmerican even acknowledges on their website that ‘[a]ncillary costs are market-driven and can increase significantly during extreme weather events.’”
In an apparent attempt to justify the astronomical charges, MidAmerican claimed the costs of supplemental ancillary services were reflective of assessments by the Electric Reliability Council of Texas (ERCOT) “for reliability functions performed during the February winter storm event,” the lawsuit says. Despite becoming, alongside other energy providers, the subject of investigations into the power failures amid Winter Storm Uri, MidAmerican “has not acknowledged any wrongdoing” or implemented measures to help customers experiencing ongoing financial challenges, the plaintiff says.
The case looks to represent all persons or entities who bought or obtained electricity services in Texas from MidAmerican and were charged and/or paid excessive and/or exorbitant electricity prices (e.g., supplemental ancillary services) during and because of Winter Storm Uri of February 2021.
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