Also known as more from the Brazos Electric Power Co-op lawsuit against ERCOT, but that didn’t fit well in the title.
The former chair of the Texas Public Utility Commission testified in court Thursday that during last year’s winter storm and blackout Governor Greg Abbott had ordered her to ride out to the power grid control room in Taylor with one of his top advisers.
DeAnn Walker, who resigned in the political fallout of the blackout, said Abbott told her to, “get the power back on” and keep it on and had a state game warden drive her out to the control room.
“He told me to go out to the Taylor facility and to figure out a way to get the power back on to all the customers and to not go back into rolling outages,” she said in federal bankruptcy court in Houston.
The utility commission originally ordered power prices to the $9,000 cap on Feb. 16, as power plants began freezing up and dropping off the grid at a fast rate. The next day, as generators were beginning to come back online, there was pressure from some power companies to let the power market resume normal operations.
But Magness and Walker resisted, testifying the grid was still unstable and at risk of falling into a total blackout that could take weeks to recover from.
On Thursday Walker, a former adviser to Abbott who was appointed to the utility commission in 2017, faced questions about why she didn’t call a meeting of the utility commission to consult with other commissioners about keeping power prices at the $9,000 cap.
She replied that she believed the commission’s order from Feb. 16, “was still in place.”
“That was an independent decision I made,” she said. “It wasn’t something as a commission we discussed.”
Asked if she discussed it with anyone else, Walker said, “I don’t remember.”
Walker struggled to remember details of the blackout at numerous times during her testimony Thursday, at times drawing criticism from U.S. Bankruptcy Judge David Jones.
At the end of her testimony, Jones commented, “I see no purpose in simply highlighting the areas of your unreliability.”
“I am disappointed in your conduct and your lack of candor this morning.”
See here for the previous day’s testimony from former ERCOT head Bill Magness. While it may sound like Abbott was ordering Walker to do something good, it contradicts his previous claims that he was not involved in the decisions being made by ERCOT and the PUC. In addition, the crux of this lawsuit is that ERCOT and the PUC mandated that the price cap for energy remain at the maximum level of $9,000 per kilowatt hour for days after the grid began coming back up, which put many millions of dollars into the pockets of some power generators at the expense of companies like Brazos Electric and their customers, which is to say people like all of us. The lawsuit, part of Brazos’ bankruptcy filing, is over how much they actually owe their suppliers. The plaintiff’s argument, which is backed up by a lot of outside experts, is that the max price cap, which ostensibly was to coax offline generators back online, did nothing of the sort. It was just a huge windfall for the providers that were already producing.
Anyway. A favorable decision for Brazos Electric would obviously be good for them, and I would hope good for their customers. It would also cause other power retailers to follow suit, and who knows how chaotic that might get. Not that it would be a bad thing, just a big uncertainty. And if there are a bunch more lawsuits of this nature, ERCOT is going to be very busy defending itself.
The Electric Reliability Council of Texas does not have sovereign immunity from all lawsuits and the Texas Public Utility Commission does not have exclusive jurisdiction over all claims against ERCOT, according to a ruling by an appeals court ruling this week.
The 12-to-1 decision Wednesday by the Fifth District Court of Appeals in Dallas was widely anticipated because it could have ramifications in hundreds of lawsuits pending in Houston courts stemming from the deadly winter storm in 2021 in which ERCOT is a defendant.
In the ruling, judges cleared the path for Panda Power Funds to pursue hundreds of millions of dollars in damage claims in state court against ERCOT. Panda claims that ERCOT committed fraud, negligent misrepresentation and breach of fiduciary duty when it published intentionally inaccurate reports in 2011 and 2012 that projected a “serious and long-term scarcity of power supply.”
As a result of ERCOT’s allegedly false market data, Panda invested $2.2 billion to build three new power plants — operations that have not generated the revenue that ERCOT predicted.
The Fifth Court opinion, authored by Justice Erin Nowell, also reverses a decision the same court made in 2018 that ERCOT has sovereign immunity.
“To date, the supreme court has not extended sovereign immunity to a purely private entity neither chartered nor created by the state, and this court will not create new precedent by extending sovereign immunity to ERCOT,” Nowell wrote. “ERCOT is not entitled to sovereign immunity and the legislature did not grant exclusive jurisdiction over Panda’s claims to the PUC. To the extent we previously held otherwise, that holding is in error.”
“Although ERCOT argues it has the power to make binding law, which it calls the ‘quintessential sovereign power,’ the applicable statutes do not support this argument,” the court ruled.
Justice David Schenck dissented, but there is no record of a written dissent.
Lawyers on both sides say the case is now headed to the Texas Supreme Court.
The issue of ERCOT’s sovereign immunity is critical in more than 200 individual wrongful death, personal injury and property damage lawsuits brought by victims of the winter storm that name ERCOT among defendants. Those cases have been consolidated before a judge in Houston.
“This is a huge win for both Texas consumers and businesses whose lives and livelihoods were so drastically impacted by the actions and inactions of ERCOT,” said Houston trial lawyer Derek Potts, who represents dozens of victims of the storm. “It is safe to say that more litigation against ERCOT is coming.”
See here, here, and here for more on the Panda Power case, which originated in 2019 and thus has nothing to do with the freeze lawsuits. Well, it didn’t at the time, which was of course before the freeze, but it sure does now. Justice Nowell is now a candidate for State Supreme Court, by the way. Just passing that along.