On Winter Storm Uri, the Texas Supreme Court and the Public Utilities Commission’s Power to Address Statewide Emergencies

Earlier this summer, the Texas Supreme Court decided two highly publicized, high-stakes cases arising out of Winter Storm Uri: Public Utility Commission v. Luminant Energy Co., about the power of the Public Utilities Commission to respond to statewide emergencies by issuing orders to adjust pricing of electricity in an emergency so as to set the prices at the high offer cap; and Public Utility Commission v. RWE Renewables Americas, which examines the oversight of rulemaking by the Electric Reliability Council of Texas. Both cases matter greatly to the Texas electricity industry.In Luminant, the plaintiffs — purchasers of electricity — sought to recover potentially billions of dollars for increased electricity costs mandated through PUC orders during the storm, as well as to cabin the Commission’s ad hocpowers in emergencies. In RWE, the plaintiffs sought not only to invalidate the pricing orders but also to invalidate the PUC’s approval of an ERCOT protocol to automatically raise electricity prices to the regulatory maximum offer cap during a statewide emergency of the highest energy alert level. In both cases, the Texas Court of Appeals for the Third District invalidated the PUC’s action, creating a great cloud of uncertainty for both electricity producers and purchasers in…