SAN ANTONIO — Many have filed property damage, personal injury and wrongful death lawsuits against the Electric Reliability Council of Texas, or ERCOT – the private, nonprofit group that manages the Texas power grid – after losing power for days during the February winter storm.
There is no clear answer on if these lawsuits will be successful or if they will even be allowed to proceed in the courts. The big question right now is whether or not ERCOT has what is legally called “sovereign immunity." If so, that means ERCOT may be protected from lawsuits.
The Texas Supreme Court is currently looking a case that will decide that issue.
“They haven’t made their ruling yet, but they’re on that specific question on whether or not ERCOT, based on what it does, are they considered a governmental unit entitled to sovereign immunity?” said Eric Cedillo, a Texas attorney and law professor at Southern Methodist University’s Dallas campus. “If the Texas Supreme Court maintains that they are, then there would an incredible limitation to a lot of the plaintiffs that are filing lawsuits against ERCOT.”
There may be two other options for people seeking to make ERCOT pay if the Texas Supreme Court gives the agency immunity. The first is the Texas Torte Claims Act, but that law restricts how much money people can get.
“It’s limited in terms of caps and may be capped at $250,000 per person, $500,000 per occurrence,” Cedillo said. “There would be an incredible limitation to a lot of the plaintiffs that are filing lawsuits against ERCOT. We’re looking at billions and billons of dollars in personal property damage. I don’t think it would be anything akin to taking care of the true amount of loss and claims that we’re seeing across the state.”
The second way to seek money might be under what is known as the “taking” law. Patrick Luff, a Dallas attorney with Fears Nachawati who is suing ERCOT, explains how that law works:
“When the government takes an action that deprives you of all reasonable use of your property, that is a taking to which the state and federal constitutions entitle you to just compensation,” he said. “In instituting these blackouts that ended up lasting for several days, even though they were taken, as they say, to prevent an even greater disaster, that is never the less taking under the law for which homeowners and businesses are going to be entitled to compensation.”
Who ends up paying the price if ERCOT is made to pay? Well, you.
“The consumer, at the end of the day, bears the brunt because they’ll spread those costs out over the paying consumer in terms of the adjustment of their prices,” Cedillo said. “So, you know, ultimately, it always comes back to us, the consumer, in terms of who pays for they they’ve done.”
Many are seeking justice for problems from the power outage. What that looks like is still to be determined, but agencies cannot be sent to jail.
“Corporations can’t go to jail, but actually under our penal code they can be, of course, indicted for criminal activity,” said Cedillo. “Usually those are tied to monetary fines.”
Legal experts said the Texas Supreme Court is likely to determine if ERCOT can be sued by the summer.