The Texas Supreme Court ruled on Friday that the Public Utilities Commission acted appropriately when it raised electricity prices during the 2021 winter storm emergency, a move that led some providers to file for bankruptcy.
Irving-based power company Luminant Corporation, a subsidiary of Vistra Corporation, argued that Texas’ power grid regulator, the Public Utility Commission (PUC), exceeded its authority by raising the price of electricity to its maximum for four days, per The Dallas Morning News.
The prices were raised to $9,000 per megawatt-hour, which is about 300 times more than the typical price of electricity. Over a period of four days during Winter Storm Uri, electricity providers were allegedly overcharged by $16 billion. One of these companies, Luminant, lost nearly $1 billion during the deadly freeze.
The sudden price inflation led to the bankruptcy of multiple utility companies.
Following the freeze, every member of PUC was fired or tendered their resignation. Additionally, the maximum price of electricity has now been lowered to $5,000 per megawatt-hour.
In late January, the Texas Supreme Court heard the case between Luminant and PUC, as previously reported by The Dallas Express.
Ultimately, the court ruled 7-0 against Luminant. The June 14 decision reversed a lower court of appeals ruling that said the skyrocketing prices violated the Electric Reliability Council of Texas (ERCOT) state-mandated competitive market design.
“During Winter Storm Uri, with the Texas electric grid on the brink of collapse, the Public Utility Commission issued two orders, the effect of which was to raise the market price of electricity to the regulatory ceiling of [$9,000 per megawatt-hour] to reflect the scarcity of supply, thereby incentivizing generators capable of adding supply to do so and large industrial users to reduce their demand,” wrote Chief Justice Nathan Hecht in Friday’s ruling. “Some market participants went bankrupt.”
The ruling states that PUC complied with “procedural rulemaking requirements.”
The winter storm resulted in the deaths of 229 Texans and 15 residents of other states. An estimated 65% of the deaths were a result of exposure to extreme cold.
Luminant also filed a complaint with the Texas Railroad Commission against the Dallas-based pipeline company Energy Transfer in January 2022. The corporation complained that Energy Transfer threatened to cut its natural gas services to Luminant’s power plants over a payment dispute between the companies.