On Sept. 29, 2023, the Supreme Court of Texas announced it will review a lower court’s reversal of two winter storm Uri orders by the Public Utility Commission of Texas (PUCT), which date back to 2021. During the historic winter storm that caused roughly $195 billion in damages, the PUCT’s orders resulted in power prices in the Electric Reliability Council of Texas (ERCOT) reaching $9,000/MWh for an extended period, impacting countless companies and consumers.
In Public Utility Commission of Texas v. Luminant Energy Company LLC, No. 23-0231, the Supreme Court of Texas will review the hotly contested decision of the Texas Court of Appeals for the Third District. The Court of Appeals had reversed the PUCT’s controversial orders and remanded them for further proceedings, finding that PUCT had “eliminat[ed] competition entirely” by setting the price of electricity at the cap of $9,000/MWh. Should the Supreme Court uphold the Court of Appeals’ reversal, it is unclear how the PUCT will practically resolve the pricing issues and devise potential remedies upon remand, but it likely would need to hold proceedings addressing these items under great scrutiny.
Notably, the Supreme Court of Texas has already received extensive briefing from a variety of energy companies and organizations on both sides of the issue, including from the Futures Industry Association Inc. as an amicus curiae or “friend of the court.” Oral argument is scheduled for Jan. 30, 2024, at 9 a.m. (CT). The parties’ arguments, the court’s questioning and the court’s ultimate decision will be closely watched by the energy industry and Texas consumers. Indeed, ERCOT manages the electric grid for most, but not all, of Texas and serves approximately 26 million customers.
On a parallel path, companies may continue pursuing alternative outcomes to the pending legal dispute through the Texas Legislature in the halls of the Texas Capitol.
The Texas energy lawyers and professionals of McGuireWoods LLP and McGuireWoods Consulting are monitoring the appeal and any legislative developments.