Topline
The Texas Supreme Court voted 5-4 that the Electric Reliability Council of Texas, which operates the state’s electrical grid, has sovereign immunity from lawsuits—likely allowing the government entity to curb litigation over widespread power outages during a deadly winter storm in 2021 that left more than five million without electricity.
The U.S. and Texas flags fly in front of high voltage transmission towers on February 21, 2021 in … [+]
Key Facts
The 5-4 ruling on immunity resulted in the dismissal of a lawsuit from CPS Energy, San Antonio’s municipal electric utility firm, and reversed a previous appeals court judgment.
The majority opinion delivered by Chief Justice Nathan Hecht said ERCOT was eligible for immunity on grounds that it “provides an essential governmental service,” noting the entity operates under the Public Utility Commission of Texas.
Dissenting justices argued that no statute designates ERCOT as part of the government, considering the entity to be a private corporation.
In addition to the CPS Energy lawsuit, the ruling is also rooted in a claim made by Panda Power Funds, which accused ERCOT of issuing reports several years ago that misled the company about the grid’s actual power needs, ruining billions of dollars worth of investments that were based on the reports.
Sovereign immunity protects the government and its various entities from civil lawsuits, thousands of which were filed by Texans over deaths, injuries and damages suffered as a result of the winter storm.
Big Number
$195 billion. That’s the estimated cost of the damages caused by the 2021 winter storm, according to a report from the city of Austin and Travis County.
Key Background
Texas officials estimated the winter storm of February 2021 that devastated the state’s power grid resulted in the deaths of 246 people, with nearly two-thirds of the deaths resulting from hypothermia. The historic storm engulfed Texas and also affected large sections of the U.S., Mexico and Canada. As blackouts in Texas lingered, lawmakers called for an investigation into ERCOT. Gov. Greg Abbott (R) even called for the resignation of the entity’s leadership, considering the blackouts to be a failure on ERCOT’s part. Texans joined in on the harsh criticism levied toward ERCOT—some of whom elected to sue the company for damages, deaths and injuries.
Further Reading
ERCOT can’t be sued over power grid failures during 2021 winter storm, Texas Supreme Court rules (The Texas Tribune)
ERCOT can’t be sued over deadly 2021 winter storm, Texas Supreme Court rules (The Dallas Morning News)
