Ercot Must Face Liability For Blackout Losses, Texas County Says
(Bloomberg) -- The power grid operator in Texas shouldn’t be allowed to hide behind government immunity to avoid legal responsibility for billions of dollars in blackout-related losses, attorneys for the largest county in the state told Texas’s highest court.
The Texas Supreme Court is deliberating whether to extend so-called sovereign immunity to the Electric Reliability Council of Texas, in a long-running separate fight over power plant construction. But if the court grants Ercot immunity in that case, the repercussions could be wide-ranging with the operator using the ruling to avoid liability in other cases, Harris County Attorney Christian Menefee said in a court filing Tuesday.
“Let those who have suffered bring and prove their case,” Menefee said, urging the all-Republican court to leave Ercot exposed to blackout-related claims. “Simply being regulated and serving a public purpose is not enough to confer immunity -- many private businesses do just that.”
Menefee filed a “friend of the court” brief in the case of Panda Power Infrastructure LLC. The private utility is trying to recover the costs for building unnecessary power plants on what the company claims were Ercot’s misrepresentations of future electricity demand. Ercot claims it should be shielded from such lawsuits under sovereign immunity granted to state-funded agencies.
Ercot is a private entity that receives no taxpayer funds and is managed by “an industry-centric board of directors,” Menefee said, and as such doesn’t deserve the same shield from private lawsuits. The attorney for Houston’s home county also said Ercot “carries significant insurance, including for losses incurred in the performance of its duties,” which means no public funds would be at risk if it were held legally responsible.
The Perryman Group, a Texas-based economic research firm, projects the state’s economic impact from the February winter storm at $195 billion to $295 billion, according to the filing. The week-long freeze killed more than 80 people, as the state’s electricity grid shut down, subjecting millions of Texans to freezing darkness and burst water pipes.
Chad Seely, Ercot’s general counsel, didn’t immediately respond to a phone or email request for comment on Harris County’s filing.
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