The business sector is intersecting with activists in an effort to help individuals who suffered financial losses due to Winter Storm Uri (Feb. 2021) and its aftermath, secure compensation.
Texans Helping Texans Recovery Fund, led by Erik Simpson, founder and ceo of CirclesX, a technology company, is calling individuals who suffered loss of power, home damage, lost business revenue, food and water loss, and/or experienced their insurance companies refuse to pay customer claims to join their lawsuit against the state’s 4,000 energy companies.
“Texans Helping Texans Recovery Fund is taking all that experience and decades of big data and energy and evaluating markets, and using that data to recover money [lost during Winter Storm Uri], because during that storm $55 billion was made by energy companies in two weeks, while Texans lost $200 billion,” said Simpson. “Normally, I’m as capitalistic as they come. However, when a company provides a service, it needs to be so that everyone is equally treated. In this situation, that was not what went down.”
According to Simpson, CirclesX has partnered with a number of groups and individuals like activist, radio host and pastor of Good Hope Missionary Baptist Church, Dr. D.Z. Cofield, to get the word out about this lawsuit that allows for Texans at no cost to sign up.
Individuals who, due to Uri loss power, suffered home damage, loss business revenue, loss of food and/or water and had costs not covered by insurance, are eligible to sign up.
“There were two groups: one group got cut off, the other group had to pay those jacked up prices that went up by 90 times. Both would have claims, which then covers for most intents and purposes, the entire population of Texas. This is basically a technology company combining legal sources to create a mechanism for social justice to recover the money back to the people that was taken improperly,” said Simpson.
The amount of damages sought depends on the number of persons who join the lawsuit, with Simpson saying “any valid claim is eligible (to join) where a person was the electric bill payer of record.”
For Cofield, this fight is about economic and racial justice, especially when he realized the energy system wasn’t shut down accidentally, but rather, on purpose.
What CirclesX discovered was, it wasn’t incompetence. It was intentional and people withheld power and kept it out of the system instead of pushing it into the system,” said Cofield. “You don’t accidentally make $55 billion in profit in two weeks.”
For context, Cofield pointed out Americans spent $53 billion in all of 2021 on legalized gambling—including the Super Bowl, March Madness, World Series, NBA Finals, etc.
“That’s $53 billion spent over the entire year on gambling. These energy companies made $55 billion in two weeks. Then, to add insult to injury, there is now a proposal in front of the public utility commission by the same energy companies who have profited, now are trying to pass along the cost to winterize the system to those of us who are customers. It’s just the height of hypocrisy.”
According to Cofield, the mapped data provided by CirclesX revealed that Texas’ more affluent, predominantly white neighborhoods had an 11% chance of losing power during Uri compared to a 48% chance for those “living in the hood,” a reality Simpson categorized as “massive discrimination.”
Simpson contends this lawsuit isn’t just about money.
“This has to do with integrity. It has to do with your vision of the future. This has to do with equality. This has to do with justice. If we sit here and we do nothing, it’s going to happen again.”
To join this lawsuit, visit www.thtrf.com and file your claim for free.
INTERVIEW OF DR. D.Z. COFIELD & ERIK SIMPSON
Here is a transcript of almost the entire interview with Simpson and Cofield, which provides even more information regarding the Texans Helping Texans Recovery Fund effort.
DEFENDER: Mr. Simpson, can you introduce yourself?
ERIK SIMPSON: Sure. My name’s Erik Simpson and I have been in Houston since 1998 and I run a technology company and I’m the CEO of that company, CirclesX. One of our divisions is this Texans Helping Texans Recovery Fund. I came here to Houston to work for a company called Enron that most people are familiar with. I have multiple decades of experience in these energy markets and we can get into later what that means for this recovery fund and some of the things that we’ve learned in grading that recovery fund to recover these resources back to the people.
DEFENDER: Pastor, please introduce yourself.
D.Z. COFIELD: I’m D.Z. Cofield, senior pastor of the Good Hope Missionary Baptist Church and among other things, I look for good fights to get into. And when Erik was directed to contact me, I heard the story, and to be honest with you, I wasn’t shocked, wasn’t surprised. But I was offended by the boldness of companies to take advantage of citizens in this state and to continue to try to take advantage of citizens that were impacted by Winter Storm Uri in February of 2021. We’ve got to do something. I’m really excited about getting the word out and helping people get on the path to hopefully recovering what was lost, especially in this day and time when we’re talking about inflation and the economic crisis in our country, I think everybody would like to be able to recover some things that were lost. And that’s what this is all about.
DEFENDER: What is the Texans Helping Texans Recovery Fund all about?
SIMPSON: I have a business background (MBA, Cornell University) and a PhD in Mathematics and Economics (Cornell). So, in running a technology company, I view as a citizen of the state that we have a duty to evaluate the integrity of the business transactions that are incurring in state and for the whole demographic population. Sadly, one of the things that I learned when I came here in the 90s was when markets deregulated—and basically, in a pure form, deregulation would be a good thing. But sadly, sometimes these implementations are done with the bias of industry and rules that are set by industry. In this situation, we saw that there was massive favor to the energy industry, specifically in the 90s when there was a situation that paralleled this case in Texas, in California.
And in that case in California, which I witnessed firsthand, being at one of the main players in that—there were 60 companies that were involved with that. So, in that situation, those companies basically had bought up all the transmission rights going into the state of California. That effectively made the state an island. And therefore, if they controlled the toll bridge going into the state, they could control the island. And so this is well known. It’s on the internet. The attorney general of California pursued this for three years. And sadly, during 2000 and 2001, the energy companies basically were holding hostage, the state of California to the tune of making over $10 billion. And people were harmed dramatically. People that had medical conditions were having their power turned off and this created just a massive nightmare scenario. So much so that the governor, Gray Davis at the time, was recalled from his governorship as a result of how did you let this happen to this state?
But the attorney general, over the next three years, was able to actually recover $8.5 billion of that $10 billion that was taken from Californians. So, over the next 20 years, when I saw this case happen in Texas with Winter Storm Uri, it just didn’t make sense to me. But at the end of the day, what Texans Helping Texans Recovery Fund is, is it’s taking all that experience and decades of big data and energy and evaluating markets, and basically using that data to recover money for Texans, because the same situation occurred in Texas, meaning that during that storm $55 billion was made by energy companies in two weeks, while Texans lost $200 billion. Normally, I’m as capitalistic as they come. However, it needs to be done in a proper manner. When a company provides a service, it needs to be so that everyone is equally treated. In this situation, that was not what went down. And, we have the data and the expertise over the last 20 years to have gone through that and determine that. So, what we’ve done is we’ve partnered with a number of groups. Pastor Cofield is helping us get the word out to basically demonstrate and allow for Texans at no cost to sign up. And if they sign up for this Texans Helping Texans Recovery Fund, we’re taking all the legal risk, which is going to be hundreds of millions of dollars. We have all the data which then reduces the cost of pursuing this. If someone qualifies, and if they had either their power cut off, which is over 14 million people in the state of Texas, they qualify even if they just paid a power bill. Because there’s two people: one group got cut off, the other group had to pay those jacked up prices that went up by 90 times. Both would be people that have claims, which then covers for most intensive purposes, the entire population of the state. This is basically a technology company that’s combining legal sources to create a mechanism for social justice to recover the money back to the people that was taken improperly.
DEFENDER: Is the “we” you mention CirclesX?
SIMPSON: Yes. When Enron went bankrupt, which was the original company that I came to Texas for, I saw a lot of this happen as I just showed in California. So, over that 20-year period, I started a technology company that’s named CirclesX. That’s the parent company. We’ve been established since 2002 in Houston, Texas. We’ve built software. We have over 170 patents and patents pending in various areas of technology. And then as well as we’ve operated, since Enron went bankrupt, the big data energy capture platform, where we look at every pipeline in the state. We look at every power plant in the state. Back when we started the company, as a result of Enron going bankrupt and not having any work, because I lost my job and everything we had, it was an opportunity to start from scratch. So, we took it, and I hired about 10 guys and we literally went through the whole country, over 120,000 data points along every pipeline. And we mapped out a nodal database saying like whether it was an industrial facility, whether it’s a power plant, whether it’s a residence. So, we have that database that we’ve collected over the last 10 years. And we’ve been using it for over 20 years. It puts us in a place where we can utilize the assets of the company to create an opportunity in social justice.
DEFENDER: What’s in it for you and CirclesX?
SIMPSON: We are a for profit company; make no mistake. We’re no charity. However, in the early part of my career, basically I was operating a hedge fund. Put simply, that makes very rich people richer. So, as a human being, I thought that my life’s purpose was failing if that was what I was doing exclusively. So, because of my belief system, I thought I had to do much more than that. So, I’ve been working on different technologies to try to close this whole income gap that we’re seeing. In 1960, the average CEO made three times what a worker made. Even that’s a lot. Today, in 2022, I used to say last week that that number of the ratio of CEO pay to the worker was 280 times. And my CFO corrected me this week and said, “No. I just reran the numbers, and it’s now 330 times what the average worker makes.” That’s not sustainable. It’s not correct. It’s not what God wants. So, I’ve had to ask myself, “How can we make it so that the common man can feel like they can get ahead?” How can it be that the common man or woman thinks that there’s justice? If the cases that a common man has to pay $400 an hour or more for to get a lawyer, that means the common man does not get justice. That means the common man can’t get ahead. That’s not what this country stands for. So, we need to stand in the gap. That’s what we’re doing with Texans Helping Texans.
I have investors. Again, we’re no charity. We’re doing this for profit. These investors, however, are willing to take this massive legal risk, meaning it’s going to cost us a few hundred million dollars to pursue this. They’re willing to wear that risk so that common people can then not have to have that barrier, meaning they can’t get justice because they can’t afford it. We cannot guarantee a win. This is a legal case. But we wouldn’t be doing it if we didn’t think that we had the team in place to get it done. So, we split the recovery with the people. It’s a way that we can basically give back half of this recovery to people. Instead of the wealth gap getting greater, we can shift a significant recovery back to people, which is then what I consider the opposite of what I used to do which was exclusively helping rich people get richer. Like, how can we do this for the common man with these barriers in our justice system, in our legal system, in the economy? That’s the metaphysic of why we’re doing what we’re doing. It’s not perfect. It can be criticized. But it is what it is and it’s a way that we can recover for people.
DEFENDER: Pastor, you said you’re always looking for a good fight to get into. What is it about this particular fight that attracted you?
COFIELD: I’ve been involved in helping families seek justice and reparations and repairs since Hurricane Ike, and most recently, Hurricane Harvey. I still have families who are not in their homes, families that still haven’t had their homes repaired because they weren’t able to meet insurance deductibles. So, I got called to a meeting and Erik was there, along with one of his associates. And when he started laying out to me what had transpired with Winter Storm Uri, my first thought was, that makes sense. It makes sense from this perspective: I didn’t understand how the same amount of people who were using power prior to the winter storm coming in, all of a sudden there was an increase in demand after the winter storm arrived.
I didn’t understand how an entire system could be shut down and locked down accidentally. Like, what level of incompetence could cause this to happen and how could that incompetence be allowed to stay in place? What we discovered was, it wasn’t incompetence. It was intentional and people withheld power and kept it out of the system instead of pushing it into the system. So, as I sat down with Erik and, and we looked at maps, one of the things that people need to understand is that this was not accidental in terms of what happened as a result of the winter storm. You don’t accidentally make $55 billion in profit in two weeks. When you think about that relatively, in this country, we spent $53 billion last year on legalized gambling—all of the gambling that took place on the Super Bowl, March Madness, World Series, NBA Finals, and every other form of gambling. That’s $53 billion spent over the entire year on gambling. These energy companies made $55 billion in two weeks. Then, to add insult to injury, there is now a proposal in front of the Public Utility Commission (PUC) by the same energy companies who have profited, and now are trying to pass along the cost to winterize the system to those of us who are customers. So, they pocketed all the profit and then now are applying saying, “Hey, we had to winterize,” and they’re counting those as losses. And now they’re saying we’re going to pass that on to the consumers as well. And, this to me, is just the height of hypocrisy.
When you think about the fact that the amount of power that was requested during the winter storm is the same amount of power that’s requested in terms of the amount of power needed to literally keep us cool throughout the peak summer months. So, we’re not talking about an exorbitant amount of power. It’s not like the power request doubled. And then how do you end up paying 90 times what the cost of the power rate was earlier? And, that was intentional, because they literally said to people who had contracts for power, “Hey, we don’t have power available for you,” but they make power available to those who have these flex rate plans, and they pass those costs on to consumers. So, now you have people and churches and other businesses who had $3,000, $4,000, $5,000, $9,000 electric bills over that two-week period. And many of them had to pay it. If they didn’t pay it, they were out of business. That’s not fair. That’s not right. You had insurance companies who literally, rather than honoring their insurance claims made by people, sent back their premiums. Literally, insurance companies sent back their premiums and said, “We’re not going to pay for this damage.”
And those families were left out in the cold because of what turns out to be an intentional power failure in this state. So, when I heard about this multidistrict, mass district litigation and the opportunity for people to get up to 90 times what they spent, I mean, the opportunity is there. And all of the things that are not covered by your insurance, including your deductible, and people who had to have major home repairs.
One of my best friend’s, his mother lost everything in Fifth Ward. He had to go in and literally repair a house, dealing with increased costs in wood and nails and the like. He just had to bite the bullet and do it in order to get his mother back in her house. Much of that was not covered by the insurance companies, because the insurance companies paid 18 cents on a dollar per claim. So, you see insurance companies backing out of their responsibility when people need them the most. And you see citizens of Texas being taken advantage of. And not just in Texas, but across the Gulf Coast region, up into Oklahoma, as well. Heck, parts of New Mexico were damaged and adversely affected by this winter storm. And when you find out that it was done intentionally, that is the piece that angers me, and that says, this is a fight that we need to get involved in and we need to help people. We’ve got to empower people to know that there is an opportunity for them to fight. There’s an opportunity for them to get back some, if not all plus, of the money that they lost and spent on repairs, appliances. All of those things are coming under this multidistrict litigation. So, I wanted to join in and help CirclesX in any way I could.
DEFENDER: Why is this so important for Defender readers, specifically?
COFIELD: This adversely affected people of color. When you look at the maps, you would think, for example, if power was out south of I-10, everybody was out of power. Well, it’s not true. When you look at the maps and the power outages, you had an 11% chance of losing your power if you lived in an affluent area and predominantly white areas. If you lived in the hood, you had a 48% chance of losing your power, which means even the loss of power was not universal in terms of geography.
You look at the maps, it’s unbelievable. You see pockets of green, where they didn’t lose power. And it’s within five miles of people who were in like black or purple, because they lost all of their power. And the people who are more adversely affected, are the people who would suffer the greatest because they don’t have the disposable income to say, “Hey, we can make it until the insurance payments come through,” if they even have insurance. So, it was those kinds of things that said to me, “This is a fight that we need to take up.”
DEFENDER: I was going to ask the question, how do we know that this withholding of power was done intentionally, but it sounds to me like CirclesX, all the information that you keep on the entire power reality of the state, would give you that information. Am I making a correct assumption there?
COFIELD: And let me say this too, there are patterns in terms of how power outages are handled, and how companies respond to power outages. CirclesX was able to document that instead of doing what was the normal pattern, they did the opposite. So, “If you were out of power or running out of power, we’re going to add power to the grid. No, this time we’re going to take power back and sell it at 90 times the rate.” Those are the kinds of things that CirclesX has been able to identify.
SIMPSON: Everything Pastor Cofield is saying is spot-on. There was massive discrimination within this, which there are specific laws within the PUC that prohibit such discrimination, meaning that power cannot be withheld on a discriminatory basis. It must be unilateral. That’s the law. The other side would say, “Oh, this is Force Majeure (an act of God). It was weather.” That would be the argument that the defendants would make. However, there’s tremendous case law within the state on that argument. And this happens, not just every few years or not just every 10 years, this happens every year in hurricane season. And the specific example is when a hurricane comes, supply is going to shut in, in the Gulf. So, what happens? Prices spike. So, what energy companies do, and this is just 101-routine of what they do, they, specifically shut down one contract that has a low price. And then they resell the energy to a high price contract that’s exposed to that hurricane price. And then they say, “Catch me if you can.” Because the worst-case outcome? They just have to pay back that which they made. Well, with no downside, you do that every time, sadly, but that’s just the way it operates. In this situation (Winter Storm Uri), and there’s other litigation out there. This isn’t the only one. There’s a ton of case law that says, “If a tree fell on your power line at your house, that is legitimate. No one could have prevented it. Your power’s out. Let’s fix it and move on.” That is Force Majeure. Now, what happened here was that there was no tree that fell on your house. There was no tree that fell on the power line, but you were turned off. And why were you were turned off? Well, because they were able to make 90 times the price or $55 billion reasons why they could have done this in the profit when we went through all the 10 queues of over 150 energy companies. And that’s not legitimate Force Majeure. And that therefore makes that argument invalid. So, we have the data to prove it. In the court precedence, they make the companies prove it with the pipeline data. And that’s how you prove it. And that’s what we have expertise doing the last 25 years.
DEFENDER: Why is this lawsuit something that a person who suffered damages during the winter storm should consider joining?
SIMPSON: Great question. This isn’t just about the money. This has to do with integrity. It has to do with your vision of the future. This has to do with equality. This has to do with justice. If we sit here and we do nothing, it’s going to happen again. Now, we’ve gone to multibillion dollar companies, in fact, chip manufacturers in Austin, Texas, they had over half a billion dollars of losses due to damage to the chip making equipment. And they didn’t understand the malfeasance that was occurring. And they fought with their insurance company to get that money back, the half a billion they lost, and they got paid 18 cents on the dollar. But then they said, “We want to bring back all this chip manufacturing from Taiwan for totally different reasons, into Texas, into Arizona. This is going to create tens of thousands of jobs for Texans.” Now they said [after being paid 18 cents to the dollar for losses incurred due to Winter Storm Uri], “So, you’re telling me that if we spend another $20 billion in investing in the state and investing in jobs, basically we’re investing into a circus, meaning that these [energy] companies can manipulate us to extract economic rent? That’s not a place where we want to do business unless we fix it.” So, we have a responsibility, as a blue-chip company, to fix it. So, that creates the climate where we’re sitting here saying, not only for the economic inequalities that occurred, but even at the highest levels of business, if we do nothing, we’re basically going to send our state back into the dark ages and capital will shift elsewhere. Jobs will go elsewhere unless we fix these rules. Now on the inequality piece, it’s even more important and more widespread because it affected far more people, But from the bottom to the top, we have a responsibility as citizens to fix this. Yeah, the recovery’s part of it, but also much higher in our needs, as humans is our need to matter. Our need is to fight for justice. Our need is to help a fellow man. And this is why we need to do this together.
COFIELD: The other thing is just real basic for people to understand. Just ask and answer some questions for yourself. Did your pipes freeze and cause damage in your home as a result of losing power? Did your business lose income? Did power outages cost you in terms of what you had to pay out? Did your insurance pay for everything that you lost? Did you get an outrageous power bill? Did someone suffer injury or death out of this? What we’re not even talking about is, think about the implications of this. I’m not an attorney, but if 400 people died as a result of this winter storm and it didn’t have to be, they did not have to be in the cold, they did not have to freeze the depth, and the energy companies could have done something about this and they chose not to; and they count those 400 lives as acceptable collateral damage for the profit that they made; there’s something wrong with that.
For the individual household, if you lost power and you lost everything in your refrigerator and if it costs you $100 to replace the food in your refrigerator, that wasn’t covered by your insurance. But that $100 now gives you a claim and eligibility for 90 times that $100. So, we’re talking about now $100 translates into being able to recover $9,000. We’re not guaranteeing that, but what we’re saying is the law is on your side. The law says, this is what you could recover. Now multiply every $100 that you had to spend, whether it was your deductible for your insurance or repairs on your house, trying to get a plumber to come out during the winter storm.
I had a pipe burst on the outside of my house. I never lost power, but I had five households in my home. Because my mother-in-law, my two son-in-laws, my son; I had everybody here. And, the fact of the matter is, when you can hold people accountable and you can receive justice and renumerations, I think that’s a win-win in so many ways.
But I think accountability is the key piece. And one of the reasons a lot of people are quiet about this is, one, they don’t have the data. They don’t have the information. And then secondly, they’re in the pockets of the energy companies. At the end of the day, energy companies are some of the largest contributors to our state officials. And in some instances, local governmental officials. So, it’s not an accident that they’re not going to be held accountable by state legislators and state government officials when some of the largest contributors to their political coffers are these energy companies.
[Energy companies will say] “Who cares? We’ll spread $1 billion around in political donations. You let me make $55 billion in two weeks, and I’ll give you back $1 billion. That’s math you can’t argue with. That’s what we’re seeing happening now. So, for me, as a person who fights for people, it’s never been about money, which is probably why I’m broke now. I just never have fought for money. I’ve never taken a stance for money and I don’t have a problem with a for-profit company engaging in this.
Here’s what I will tell you though, CirclesX, if you check out this company, they’re as committed, if not more committed, to helping people around the world than many churches are. And I think that comes out of the character Erik as the CEO. Their water filtration systems and the economic development, microlending that he’s doing with people on the continent of Africa, in India, this guy puts his money where his mouth is.
DEFENDER: Where do people go if they want to be part of this lawsuit?
SIMPSON: Super simple. Google or Bing “Texans Helping Texans Recovery Fund.” The website is www.thtrf.com, which is the abbreviation for Texans Helping Texans Recovery Fund. You can onboard and file your claim there. It takes two minutes. It’s free.