ERCOT can't be sued over deadly 2021 winter storm, Texas Supreme Court rules

In a reversal of a Dallas state appeals court, the Texas Supreme Court granted ERCOT immunity from lawsuit

Vernon Bryant, DMN

System operators work in the command center of the Electric Reliability Council of Texas in Taylor. About 90 percent of Texas’ electric load is managed by ERCOT.

The Texas Supreme Court ruled Friday that ERCOT, the operator of Texas’ power grid, is a government entity, granting the organization immunity to lawsuits stemming from 2021′s deadly winter storm.

The Supreme Court ruled 5-4 on immunity, reversing a previous judgment from a Dallas state appeals court. Justices dismissed lawsuits from San Antonio’s municipal electric utility and a private energy developer.

The court ruled unanimously that ERCOT is a governmental entity, something the organization has waffled on in recent legal challenges. For instance, it claimed it was not a government entity when it was sued over Texas’ government open records law. ERCOT officials claimed it fell under government protection under the suits that were decided Friday.

ERCOT is the country’s sole power grid contained wholly within a single state. It encompasses roughly 75% of the state and maintains a grid providing electricity to 90% of Texas’ population. It is a government-created non-profit corporation that is regulated by the Public Utility Commission.

Because of this, ERCOT should be immune to suit because “it prevents the disruption of key governmental services, protects public funds, and respects separation of powers principles,” Chief Justice Nathan L. Hecht wrote for the majority.

“ERCOT’s governmental nature is demonstrated most prominently by the level of control and authority the state exercises over it and its accountability to the state,” Hecht’s ruling stated.

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