Court Denies Lawsuits Over Texas Power Grid Failure

The Electric Reliability Council of Texas (ERCOT), which manages the Texas electric grid that failed during the 2021 winter storm, qualifies for ‘sovereign immunity’ from lawsuits as an “essential government service” despite being a private entity, ruled the Texas Supreme Court last week.

As Emily Foxhall explains in the Texas Tribune, Chief Justice Nathan Hecht wrote in the majority opinion that “If anyone is going to hold ERCOT accountable for its actions … it should be state regulators or the Legislature, not the courts.”

The Court’s 5-4 ruling comes after two cases were filed against ERCOT by San Antonio’s utility company and Panda Power Funds, a private equity firm that specializes in clean energy investments. “Justices Jeff Boyd and John Devine, along with two others, disagreed that ERCOT has sovereign immunity. Purely private entities are clearly not sovereign, and making them so undermines the public trust, they wrote.”

During the storm, ECOT cut power to millions of customers to prevent a wholesale collapse of the Texas electric grid, which, unlike other states, operates independently. “More than 200 people died. Experts estimated afterward that financial losses totaled between $80 billion and $130 billion, including physical damage and missed economic opportunity.”