The First Court of Appeals in Houston overturned a trial court’s decision ruling in favor of victims affected by the 2021 blackouts, according to The Texan.
Plaintiffs accused power generators, like NRG, Calpine, Exgen Handley, and others, of negligence for failing to maintain uninterrupted electricity.
The appeals court stated that there was no legal basis for the plaintiff’s claims, as there is no direct contractual relationship between individual electricity customers and power generators.
Over two decades ago, deregulation of the Texas power grid led to the separation of power generation from electricity retail and distribution, resulting in the absence of a direct relationship.
This deregulation led to a system where electricity is sold from generators to retail electric providers (REPs) and then from REPs to consumers, without direct interaction between generators and end-users.
Plaintiffs argued that power supply is a public utility and generators have a duty to maintain continuous service. However, the court emphasized that previous deregulation changed the classification of power generators, removing them from the “electric utility” category.
In its decision, the court noted that the Texas Legislature, in deregulating the market, did not impose a duty on generators to provide continuous electricity to retail customers. As a result, the court stated they could not create new legal relationships or duties not explicitly stated in the law.
A combination of factors, including inadequate cold-weatherization of power plants, low renewable energy production, and severe winter storms, led to the 2021 blackouts, as The Dallas Express reported. The Texas Supreme Court previously ruled that the Electric Reliability Council of Texas, the entity responsible for the state’s power grid, has sovereign immunity from civil lawsuits, further complicating the legal landscape.
If the plaintiffs decide to appeal, the case will escalate to the Texas Supreme Court.