Can ERCOT even be sued? Texas Supreme Court will decide.
The Supreme Court of Texas will hear oral arguments Monday in a case that could decide the future of the Electric Reliability Council of Texas. At issue: whether the group that runs the Texas energy grid is, in fact, a part of the state government.
The case stems from two lawsuits against ERCOT. One of them, from San Antonio public utility CPS Energy, challenges how high the agency kept electricity prices during the 2021 blackout.
In both lawsuits, ERCOT claimed it can't be sued because it's a division of government under the authority of the Public Utility Commission of Texas. Lower courts decided differently in the two cases, leading to appeals that brought the question before the Texas Supreme Court.
While ERCOT claims sovereign immunity, plaintiffs point out that it is also an independent nonprofit, a fact that the grid operator sometimes uses to its advantage.
ERCOT has been “two-faced in presenting its status,” CPS Energy argues in its appeal. “Claiming it was not a public entity when the public requested records to investigate ERCOT’s actions during the deadly storm, and now claiming that it is when faced with the consequences of its multi-billion dollar mistake.”
If the court decides ERCOT can be sued, lawyers representing the grid operator say it will undermine the group’s ability to manage the flow of electricity on the Texas power system and oversee the state's deregulated electricity market. Such a decision would also mean countless other lawsuits stemming from the 2021 blackout — demanding billions of dollars in damages — can move forward.
Oral arguments in the case will be streaming on the court's YouTube channel here starting at 9 a.m.