Fact or Fiction: Texas Has Its Own Separate Power Grid, and It Failed Miserably

This is fact! Texas’s power grid is not connected to any other power grid in the country. As investigations into the power outages across Texas are still underway, residents are filing class-action lawsuits against the Electric Reliability Council of Texas (ERCOT) and electricity retailerGriddy.”

Image Source: cnbc.com

Class-Action Lawsuits Filed Against Griddy

As reported by USA Today, Griddy is facing a class-action lawsuit for allegedly engaging in unlawful price gouging amid the power outages across Texas during a once-in-a-century freezing winter storm in February.

A woman filed the class-action lawsuit against Griddy on behalf of all of the retail power company’s customers who received thousand-dollar bills amid a massive spike in electric prices.

Lisa Khoury, the woman who filed the class-action lawsuit, was charged over $9,500 from February 1 through February 19 due to skyrocketing electricity prices.

Griddy is a retail power company that charges customers variable rates for electricity. In February, Griddy’s wholesale electricity prices soared from the average rate of $50 per megawatt-hour to over $9,000 per megawatt-hour amid the power outages and unprecedented demand across the state.

Class-Action Lawsuit Filed Against ERCOT

The Electric Reliability Council of Texas (ERCOT), a non-profit organization, is facing a class-action lawsuit, too. The embattled power grid operator is in hot water after over 4 million customers in Texas had no power during a severe winter storm in February.

ERCOT is facing multiple lawsuits, including a class-action lawsuit alleging that the operator of the state’s power grid utterly failed” to make plans for sub-zero temperatures despite receiving “multiple unambiguous warnings.”

Image Source: texastribune.com

ERCOT manages the flow of electricity to over 26 million customers in Texas, representing about 90% of the state’s total electric load. ERCOT was allegedly warned on February 9, 2021, that an impending winter storm could result in the collapse of its electrical network if it does not take reasonable measures.

ERCOT and Entergy Texas Sued for $100 Million Over 11-Year-Old Boy’s Death

The family of an 11-year-old boy who died during power outages in Texas filed a lawsuit against  ERCOT and Entergy Texas, an electric power generation and distribution company.

The boy died of hypothermia amid plunging temperatures in the house due to power outages across the state. The family is suing the two companies for a total of $100 million over the boy’s death, and claims they were mislead into believing the power outages would be “rolling” and temporary.

Is ERCOT Immune from Power Outage Lawsuits?

Although ERCOT is a private non-profit organization, the Texas Public Utility Commission (PUC) oversees the state’s power grid operator. The PUC, in its turn, is a state agency that creates rules and standards for the electricity grid.

While the ERCOT is not technically governed by federal regulations, a lower court in Texas has previously ruled that the non-profit organization is entitled to sovereign immunity.

Sovereign immunity protects government agencies and entities from lawsuits. However, the sovereign immunity ruling in a 2016 case is currently under review by the state’s Supreme Court, according to KXAN.

Even if the Supreme Court finds that the ERCOT is immune from power outage lawsuits, there may still be other remedies for customers to recover damages. One of the legal remedies could be pursuing a claim under the Texas Tort Claims Act.

The statute allows plaintiffs to sue government entities, including the State of Texas, though the defendant’s liability is limited to $250,000 per person.

What do you think? Should the liability from these lawsuits be limited since the defendants provide an essential public service? Are there other ways to deter similar incompetence in the future?

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