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Texas state Supreme Court rules that ERCOT gets sovereign immunity

ERCOT has been sued by hundreds of parties as a result of the statewide blackouts during the 2021 Texas freeze.

AUSTIN, Texas — In a divided decision, the Texas State Supreme Court has ruled that ERCOT, the Electric Reliability Council of Texas, cannot be sued because it is a necessary, state authorized entity.  "Sovereign immunity" stems from feudal times when a King or Queen, or agent of the sovereign, was legally immune from legal challenges.   

Editor's note: Video above is from January before the Texas Supreme Court's decision

ERCOT had been sued by Panda Power in 2016 and has been sued by hundreds of parties as a result of the statewide blackouts during the 2021 Texas freeze. The official state death count is 246, and economist Ray Perryman has estimated that the state lost as much as $200 billion in damages to property and businesses. 

The net effect of the court's ruling may be minimal. Co-defendants in the lawsuits related to the 2021 winter storm include generation companies, transmission companies, and local utility such as CenterPoint Energy in Houston.   

Because everyone in Texas was on notice from the 2011 freeze that the federal government recommended that each local utility prepare to manage rolling blackouts in the event of generator failures during another freeze, the companies themselves may not be able to dodge the liabilities. 

In particular, this paragraph from page 197 of the FERC/NERC Staff Report on the 2011 Southwest Cold Weather Event:

"While the probability of a winter event in the predominantly summer peaking Southwest appears to be low, shedding load in the winter places lives and property at risk. The task force recommends that all entities responsible for the reliability of the bulk power system in the Southwest prepare for the winter season with the same sense of urgency and priority as they prepare for the summer peak season."

During the 2021 Texas freeze, CenterPoint blacked out Houston neighborhoods while empty buildings in downtown Houston were awash with lights.  Dozens died in CenterPoint's service area, reportedly due to the blackouts, and, according to the Houston Chronicle, CenterPoint CEO Dave Lesar received $37.8 million in compensation for 2021.

Ed Hirs is KHOU 11's energy expert

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