Texas freeze squeezes Macquarie-backed Griddy
Customers of Texas-focused electricity retailer Griddy are being hammered by sky-high power prices as an Arctic storm grips the state and they are caught out by a business model in which they pay wholesale prices.
The business model used by Macquarie-backed Griddy promises to eliminate the middleman and allow customers to benefit from wholesale prices that are nearly always lower than standard retail prices.
It is one used by some emerging retailers in Australia, such as Amber Electric, that attract customers by promising to cut out mark-ups by traditional retailers and provide regular price alerts so households can adjust their use to avoid spikes,
But as Texas was hit by the coldest temperatures for decades, the business model has seriously backfired, with households sometimes having to pay more than 100 times the normal rate as prices surged to the maximum $US9000 a megawatt-hour.
The equivalent $US9 per kilowatt-hour compares with the average price paid by Griddy customers in January of US8.5¢/kWh, which the company said was about 40 per cent below the benchmark rate in the state.
https://www.afr.com/companies/energy/texas-freeze-traps-power-users-at-macquarie-backed-griddy-20210216-p572tf