Texas' grid operator ERCOT has 1 reason that it claims it can't be sued

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ByKeaton Fox via KTRK logo
Monday, February 22, 2021
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Lawsuits were formed in the immediate aftermath of the 2021 Texas winter storm, including one representing the family of a Conroe boy who died during the course of the weather event. But in the video, we lay out why ERCOT claims it can't be sued.

After a historic winter storm in Texas knocked out power to millions and left dozens dead, officials who manage the state's grid, the Electrical Reliability Council of Texas, say they aren't responsible in court because they have sovereign immunity to legal cases.

Sovereign immunity is the legal principle that protects some governmental agencies from lawsuits because allowing the suits would disrupt "key government services" when money is spent on litigation.

Previous courts have upheld ERCOT's immunity, claiming that despite it not being an official government agency, it is a critical part of the electric industry. If a court were to find ERCOT monetarily responsible for any action it takes, it could essentially bankrupt the system, leaving Texas and its power grid without central management.

WATCH: What does ERCOT do? And why is it a nonprofit?

Whether or not grid operators will have the right to sue is currently in front of the Texas Supreme Court in another case brought before it years ago. Dallas-based Panda Power sued ERCOT in 2016, claiming that reports the grid operator put out said the state was woefully short on power generation. Using that prediction, Panda Power spent billions building new plants. But the report was wrong and at least one of the new plants went bankrupt.

The suit says ERCOT intentionally manipulated the projections, bowing to political pressure.

An appeals court upheld ERCOT's claim to immunity in 2018 and the case has now worked its way up to the Texas Supreme Court, where it's expected to be decided by the summer.

Lawyers across the state have filed new lawsuits against the operator in the wake of the 2021 winter storm. All the suits so far allege the grid operators didn't do enough to prevent massive blackouts that affected nearly 5 million Texans.

ERCOT didn't respond to a request for comment.

SEE ALSO: Tony Buzbee and child's family sue ERCOT for over $100M after 11-year-old died during winter storm

Lawsuit alleges ERCOT ignored weaknesses in power grid