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Legal efforts by some of the largest energy companies in Texas to force the Texas Public Utility Commission to reprice the record-high electricity rates it charged during Winter Storm Uri three years ago were flatly rejected Friday by a unanimous Texas Supreme Court. The state’s highest court ruled that the PUC did not exceed its legal authority in February 2021 when it ignored market competition to set electric rates at $9,000 per megawatt-hour because the Texas grid faced an emergency crisis and possible collapse “that would have plunged the state into darkness for weeks, maybe months.”

The unanimous 30-page opinion reverses the decision of the Austin court of appeals in 2023 that the PUC overstepped its legal authority by ignoring integrated market competitive procedures and instead manually set electric rates during the four days of Winter Storm Uri.

Chief Justice Nathan Hecht, writing for the unanimous court, explained that when the royalty provisions are read “together, not separately” and are considered in the context of the parties’ agreement, they are not ambiguous. But the ruling that sided with the University of Texas System Board of Regents did not give the university an outright win.