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ERCOT Faces Class Action, Lawsuits Over Texas Power Grid Failure

— February 25, 2021

The Electric Reliability Council of Texas, or ERCOT, is facing a potentially massive class action after the state’s power grid failed in deadly cold conditions.

ABC News reports that the lawsuit was filed by Morgan & Morgan, a Florida-based law firm with hundreds of attorneys nationwide. In its complaint, Morgan & Morgan allege that ERCOT “utterly failed” to make plans for sub-zero temperatures, even though multiple sources had warned that Texas could be facing a nigh-unprecedented winter disaster.

In spite of weather forecasts and widespread concerns, ERCOT—a nonprofit utility—purportedly did not take adequate measures to ensure that its power grid could stay online.

Morgan & Morgan attorneys Mike Morgan and Rene Rocha said that, not only had ERCOT refused to prepare itself, but this wasn’t even the first time the utility had let Texans down.

“Despite receiving multiple unambiguous warnings, ERCOT’s alleged failure to ensure reliable generating capacity during anticipated conditions forced many of its customers to endure dangerous freezing temperatures for long periods of time,” the two said in a statement. “This was not the first time ERCOT has failed to plan and prepare for cold weather. But instead of learning the lessons of its past failures, ERCOT yet again disregarded its duties to its customers. Over 70 people have died and millions of others have suffered emotional and physical trauma due to ERCOT’s alleged gross negligence.”

Person snowblowing
Person snowblowing; image courtesy of JillWellington via Pixabay,

ERCOT, notes ABC News, manages power distribution for more than 26 million people across Texas—a number that accounts for roughly 90% of Texas’s entire electrical load.

Shortly before the storms hit, Texas Gov. Gregg Abbott issued a disaster declaration in all of the state’s 254 counties.

This declaration, says Morgan & Morgan, “should have further emphasized the need for ERCOT to take appropriate measures to ensure system performance under the anticipated conditions.”

When winter weather began pummeling Texas on February 14th, ERCOT’s capacity buckled—its president and CEO, Bill Magness, made a public statement acknowledging that the state’s electrical grid was “seconds or minutes” from catastrophic failure.

After ERCOT’s grid collapsed, millions of Texas were left without electricity, heat, or running water.

While the evidence seems to be against ERCOT, the utility has responded to the numerous lawsuits piling up against it by claiming sovereign immunity.

Sovereign immunity doctrine purports that government agencies are typically immune from civil litigation, were such litigation to pose a direct threat to their critical operations. Although ERCOT isn’t technically run by the government, the company has claimed that it is so integral to Texas that a lawsuit could bankrupt it—threatening to leave ERCOT bereft of management, despite its obligations to tens of millions of Texans.


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