Injection molder J&M Plastics Inc. has filed a proposed class-action lawsuit against electricity supplier MidAmerican Energy Services, alleging that the firm passed through unauthorized fees to commercial customers with contracts marketed as fixed-rate plans.
J&M is based in Royse City, Texas. According to its website, the firm uses recycled resins to make products such as flower pots, nursery trays, coat hangers and dog bowls. MidAmerican of Des Moines, Iowa, is an affiliate of Berkshire Hathaway that supplies electricity to 60,000 customers nationwide.
In a June 8 news release, officials said that J&M received a statement from MidAmerican in April that included eight line-item charges for "supplemental ancillary services." Those charges, assessed during the week of the ice storm that hit Texas in February, totaled almost $54,000. J&M officials said that amount was more than three times the amount of the company's typical monthly bill.
MidAmerican ignored the terms of its fixed-price agreement, according to J&M, and informed customers that MidAmerican "will not increase the energy component of your bill, however, nonenergy costs such as ancillary charges billed by ERCOT [Electric Reliability Council of Texas] and your local utility are not fixed and are passed through on your bill."
J&M management kept their 55,000-square-foot facility heated during the storm to keep pipes from freezing, but it did not operate. The company employs more than 40 full-time workers.
In an email to Plastics News, a MidAmerican spokesman said that the firm "is not able to provide details on the pending litigation at this time."
The lawsuit has been filed in U.S. District Court in Marshall, Texas, by the Potts Law Firm of Houston.
In the release, Derek Potts of the law firm said that MidAmerican "has already acknowledged that it can't pass through these same costs to their residential and small-business customers because of the Public Utility Commission's consumer protection regulations."
But, he added, MidAmerican "is still trying to unlawfully use a statewide disaster to take advantage of and price-gouge thousands of larger commercial customers."
"They can't justify passing through these costs when J&M and other customers agreed to a fixed-price electricity plan, which specifically includes any ancillary and ERCOT-assessed charges," Potts said.