Can power companies be held negligent for 2021 winter storm? Texas Supreme Court must decide

AUSTIN, Texas - The Texas Supreme Court on Wednesday heard arguments to decide if electric power providers can be held negligent for blackouts that occurred during a 2021 winter storm that were ordered by ERCOT, the agency in charge of the Texas power grid.

What we know:

Hundreds of lawsuits were filed against power providers in the wake of 2021's storm that led to more than 200 deaths across the state.

Those cases were eventually collected as a single, multidistrict lawsuit. 

As those cases went through the court system, the claims that providers were negligent and that they violated contract agreements with customers to provide power were dismissed.

The courts, however, have allowed the case to continue on the grounds of gross negligence and intentional nuisance claims.

The case focuses on whether power transmission companies, like Oncor in North Texas, could have acted differently when the Energy Reliability Council of Texas (ERCOT) told utilities to cut power to homes and businesses to lessen the strain on the grid.

Oncor argues that they cannot be held liable as they were just moving ahead with the request of the Energy Reliability Council of Texas (ERCOT) in good faith.

Those filing against the providers argue that providers, like Oncor, knew there would be issues with power delivery under heavy demands.

They also argue that the providers did not issue rolling blackouts and favored certain neighborhoods over others.

"These orders did not instruct the [providers] to leave some customers to freeze to death while others never lost power," those claiming the providers were negligent argued in court filings.

Court filings argue that the blackouts also targeted natural gas suppliers that prevented the generation of more energy.

Wednesday's Hearing

What they're saying:

Attorneys for Oncor argued that energy providers are a part of a heavily regulated industry and were required to follow ERCOT's protocols.

Attorney Michael Heidler argued that the load shedding was done to protect the entire Texas power grid.

"Throughout the entire load shed event, our load shedding decisions were constrained by ERCOT's protocols," Heidler said.

He also claimed that ERCOT's protocol required leaving power on to some neighborhoods while being able to cut power from others, essentially preventing energy providers from performing rolling blackouts.

"When it comes to EEA3 load shedding, our obligation is to protect the power grid," Heidler said.

Heidler went on to explain that if power providers are obligated to follow ERCOT orders, then they cannot be held liable to the customer for not providing consistent power during an emergency.

On Wednesday afternoon, Oncor released the following statement:

"Every action Oncor took during Winter Storm Uri was for the purpose of successfully preventing the collapse of the Texas grid and protecting Texans from what that may have entailed. We recognize this does not lessen the anguish experienced by our customers and by Texans across the state during that time. We are also certain that the actions we took to follow regulatory directives and protect the grid prevented even greater suffering. We are confident these lawsuits are without understanding or merit for the critical facts at hand and we look forward to the Supreme Court’s ruling on this matter."

The other side:

Sherri Saucer argued that the Texas Supreme Court had already ruled that energy providers could be held liable despite being regulated.

The court, however, was concerned that since the other claims were dismissed, there was no basis for a gross negligence claim.

"If you can't be negligent, it's pretty hard to be grossly negligent, at least the way the relators are arguing it," Justice Jeff Boyd said.

What they're saying:

Saucer said that even though the negligence claims were dismissed, the 14th Court of Appeals' decision provided a blueprint to move forward with gross negligence claims.

Saucer argued that the power companies decided where to cut power when ERCOT said they collectively needed to shed 20,000 megawatts of power and then the companies decided not to perform rolling blackouts.

"They preferred some neighborhoods over others. And they knew it, and they did it on purpose," Saucer said.

Saucer argued that power providers were warned in 2011 by federal regulators to not shut off power to natural gas providers and then did it again during the 2021 storm.

What's next:

The Texas Supreme Court is expected to issue a ruling in the case in the next few months.

2021 Winter Storm

The 2021 snowstorm was one of the most dangerous weather events in Texas history, causing 246 deaths and leaving millions without power for days.

Nearly two-thirds of those deaths were from extreme exposure to cold.

The storm's deadly aftermath was caused by the failure of ERCOT power grids, leaving millions without electricity, according to NWS. Federal energy regulators blamed frozen equipment at power plants and natural gas facilities for the outages.

The Federal Energy Regulatory Commission reports more than 4.5 million people in Texas lost power – some for as long as four days.

While demand hit record levels, supply of power fell. At one point, nearly 50% of power generation was knocked offline.

Frozen precipitation knocked out wind turbines. The largest chunk of power generation knocked out was from generators that use natural gas, many because they couldn’t get the gas they needed due to freezing temperatures.

TexasEnvironment