Lawsuit Filed Against Direct Energy for Excessive Electricity Bills During Texas Winter Storm
The owner of a North Texas Harley-Davidson dealership has filed a lawsuit against Houston-based Direct Energy and its affiliates, alleging the electricity provider engaged in unlawful price gouging during February’s statewide winter storm.
According to the filing in state district court in Harris County, plaintiff American Eagle Harley-Davidson (AEHD), located in the Denton County community of Corinth, received an invoice for February electricity service of almost $277,000, approximately 55 times more than the dealership’s typical monthly bill.
“We believe American Eagle Harley-Davidson, like many other Texas business and residential customers, were blindsided by Direct Energy’s practices,” says Derek Potts of the Potts Law Firm in Houston, who represents AEHD. “The dealership was hit with excessive charges resulting from the foreseeable but unprecedented winter storm.”
The lawsuit alleges Direct Energy violated the Texas Deceptive Trade Practices Act and claims Direct Energy acted negligently and misrepresented its services. It seeks an injunction to prevent Direct Energy from billing and collecting payment for excessive prices and demands the forgiving of any late or unpaid bills. AEHD seeks monetary relief of $1 million.
In business since 2002, AEHD had contracted with Direct Energy Business to provide electricity at a fixed price as maintained by the Electric Reliability Council of Texas. Around the time the contract was set to expire in Spring 2020, Direct Energy sent an email to the dealership that stated in the last line and in the smallest font: “If your rate plan expires before you renew, Direct Energy Business will continue to serve you on a monthly variable rate.” The supplier did not provide any further explanation of the change.
“The service plan offered from Direct Energy Business did not appreciate the risk entailed with it, particularly when an index rate was to be applied after nonrenewal,” the lawsuit alleges. “The dealership had not comprehended the type of exposure, liability, and risk. If it had understood the service plan, it would have shopped around and reassessed the plan’s competitiveness. Additionally, Direct Energy Business did not provide adequate notice before, during, or after the storm to inform its index rate customers of price spikes.”