Texas appeals court says winter storm lawsuits against transmission and distribution utilities can move forward

A three-judge appeals panel in Texas ruled Wednesday that winter storm lawsuits against transmission and distribution utilities (TDUs) can move forward.

The ruling came from Texas’s 14th Court of Appeals in Houston and will allow lawsuits related to the deadly 2021 winter storm to proceed on allegations of negligence against defendants CenterPoint Energy, Oncor Electric Delivery and American Electric Power.

Lawsuits say these TDUs were responsible for providing power and a “record-setting demand for energy” amid the storm. Thousands of customers sued companies participating in Texas’s electric grid seeking damages for the power outages during Winter Storm Uri, when more than 200 people died.

The companies have previously argued that they are not liable for the alleged damages under a state Supreme Court precedent and the “comprehensive regulatory scheme, including the TDUs’ tariffs for retail delivery service.”

In an emailed statement, CenterPoint Energy said it is pleased with the court’s decision that affirms the TDU’s tariff provisions. The panel of judges said the plaintiffs failed to “allege facts to rebut the presumption of reasonableness,” kicking the tariff debate to other courts if they determine a motion to dismiss.

But ultimately, the panel said the companies were negligent when they interrupted electricity in response to the Electric Reliability Council of Texas, which declared a level three emergency declaration within an hour.

The panel said the TDUs are not shielded from “gross negligence or intentional misconduct.” The ruling outlined specific allegations plaintiffs made, including the company’s decisions during the storm that rotated outages to different neighborhoods and to cut power off to certain areas.

“There is no denying the deliberate actions and blatant disregard for the TDU’s own customers,” Nachawati Law Group lawyer Ann Saucer told Business Wire. “It was a conscious decision to cut off power to certain neighborhoods and several people lost their lives as a result. These companies were warned, and they chose not to act.”

CenterPoint said in its statement that it “maintains that Texas law requires that the remainder of plaintiffs’ claims to be dismissed and will be further analyzing the court’s opinions in the coming days.” 

Uri knocked out power for millions of Texas when temperatures dipped below freezing, kick-starting an ongoing conversation about the state’s electric grid. Hundreds of fatalities were recorded, and $300 billion in damages has been estimated.

The Hill has reached out to the utilities for comment.

Updated on Thursday, April 4 at 5:22 p.m.