By Jonathan P. Hernon –
On June 23, 2023, the Texas Supreme Court (“TSC”) ruled the Electric Reliability Council of Texas (“ERCOT”) is granted sovereign immunity related to suits from the 2021 winter storms in Texas.
The majority unpublished opinion, located on txcourts.gov., which was delivered by Chief Justice Nathan Hecht, stated in part that ERCOT ‘provides an essential governmental service’ and that Texas law intended for ERCOT to have the power of an ‘arm of the State government’. The majority opinion further stated that while the courts system may not hold EROCT accountable, the state legislature may do so.
What the Court Focused on
A review of the opinion shows the TSC was presented with the following three issues:
- whether ERCOT is a governmental unit as defined in the Texas Tort Claims Act and thereby entitled to pursue an interlocutory appeal from the denial of a plea to the jurisdiction,
- whether the Public Utility Commission of Texas has exclusive jurisdiction over the parties’ claims against ERCOT, and
- whether ERCOT is entitled to sovereign immunity.
In reversing the court of appeals’ judgment and dismissing all claims filed against ERCOT, the TSC answered yes to the three issues presented.
According to its website, ERCOT is the first Independent System Operator (“ISO”) in the United States. The TSC additionally held while there is no evidence ERCOT performs any functions outside its role as the ISO, the entity is not immune to lawsuits outside of that role. Moreover, Petitioner CPS Energy’s constitutional claims are not barred by the TSC’s ruling.
In June 2021, Governor Greg Abbott signed two bills into law, which were aimed at providing additional regulations on ERCOT, with the goal of addressing the failure of the Texas power grid. However, the TSC’s ruling ultimately bars Texas residents’ ability to pursue independent claims against ERCOT, related to issues including the 2021 winter storm power grid failure.
For more information on this topic, you may contact Jonathan at(469) 916-7700 x109 or email him.
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About Jonathan P. Hernon
Jonathan P. Hernon is a tested trial attorney who focuses his practice on litigation involving property/title disputes, breach of contract actions, first party insurance claims, personal injury claims, and DTPA/consumer protection claims.Learn more about Jonathan…