Lawsuits Against ERCOT Due To Winter Storm Devastation

Tragedy struck Texas this year when massive winter storms led to power and water outages for millions of residents. The below-freezing temperatures became a hazard that led to deaths, injuries, property damage, and interruption of business operations. The state is now suffering the aftermath of the devastation.

The Electric Reliability Council of Texas (ERCOT) is facing lawsuits for its failure to protect Texans. The massive power outages involved malfunctions related to natural gas, which is the state’s largest power source. Renewable energy sources also failed.

The power losses primarily related to the lack of weatherization throughout Texas’s power grid. ERCOT is in charge of the grid, and governors in the state allowed that entity to make decisions about upgrading the power company’s equipment. ERCOT’s apparent failure to update the equipment caused widespread devastation.

Past Warnings

Freezing winter storms have taken place in Texas in the past. In 2011, a massive storm caused grid failures, as did storms in 1989. After the storm in 2011, federal reports recommended that ERCOT take steps to weatherize its equipment and prevent future similar disasters, but ERCOT ignored this advice. According to many, if ERCOT had taken the recommended measures, the disaster this year would not have led to so much devastation.

While Texas may not frequently deal with freezing temperatures and snow, such weather is typical for much of the country. There are tested and proven ways to prevent cold weather from causing massive power outages. ERCOT could have increased its power reserves and installed heating elements to keep the power grid functioning during the freezing weather. This could have prevented millions of Texans from suffering from freezing cold without heat, clean water, and other necessities.

Types Of Claims Against ERCOT

The damage caused by ERCOT’s failures falls into several categories. Estimates indicate that, in total, the storms likely led to more than 20 billion dollars in losses throughout the state. Insurers may now face a flood of claims as families and businesses attempt to rebuild.

Wrongful Death Claims

Recent counts put the death toll at more than 100 people. Hypothermia was the cause of many of the deaths, including that of an eleven-year-old boy who died at home because he could not get warm. In that tragic case, the child’s family found the boy unresponsive under blankets. The family is now suing ERCOT for wrongful death.

Other fatalities involved carbon monoxide poisoning. Some Texans were desperately trying to seek warmth in their homes and cars and inadvertently poisoned themselves with the carbon monoxide released from their cars or other units they were trying to use for heat. In Harris County, officials reported hundreds of carbon monoxide poisoning cases because residents brought outdoor generators and grills into their homes to combat the temperatures.

Further fatalities involved severe house fires likely started by people who were attempting to warm their homes. Three children and their grandmother died in one such fire in Sugar Land.

Some wrongful death claims against ERCOT are seeking up to one hundred million dollars in damages.

Homeowners Claims

Victims are also filing homeowner claims against ERCOT for resulting property damage. The freezing weather and lack of electricity caused many Texans’ pipes to burst, leading to plumbing damage in homes and other structures, as well as causing significant flooding and water damage. The snow and other impacts of the storm also caused some homes’ roofs to collapse.

The severe destruction has led to many homeowner insurance claims and some lawsuits against ERCOT. Insurance companies may seek compensation from ERCOT and other smaller utility companies in the area for their losses from the billions of dollars in claim payouts.

Business Interruption Claims

Business interruption claims involve the loss of revenue related to unforeseen circumstances that were out of the business owner’s control. For example, COVID-19 led to many business interruption claims in the past year because of stay-at-home orders that prevented people from entering most establishments.

Similarly, the storms earlier this year led to the loss of business for many Texas companies. The power outages and structural damage to places of business could leave some companies unable to reopen because of the need to perform repairs. The heavy storms also caused problems for supply chains, creating a ripple effect that deprived some companies of the resources they need to keep functioning.

Many businesses carry business interruption insurance that will help compensate them in the event of these losses. However, there is often conflict between insurers and policyholders regarding how the insurers value the lost revenue versus the actual losses that businesses experienced.

Although the storm itself may have caused some of the problems, the weather’s impact was worse because of the state power grid failures. No one can change the weather, but the storm might not have been nearly as destructive if ERCOT had taken the proper steps to protect its customers.

Questions Regarding ERCOT And Sovereign Immunity

One issue that is likely to play a role in ERCOT lawsuits is whether ERCOT has sovereign immunity. In Texas, state government agencies are immune from lawsuits when they are performing their public duties, a policy called “sovereign immunity.” ERCOT is not a government agency, but one recent lawsuit found that ERCOT has these same protections from legal claims as an agent of the state government. However, that case is currently heading to the Texas Supreme Court to determine whether ERCOT really should benefit from this protection for government entities.

Even if ERCOT prevails in its defense of sovereign immunity, there may still be ways for those harmed by ERCOT’s failures to pursue compensation. Texas state law allows individuals to sue government entities for wrongful death. The law places a cap of $50,000 on the amount of damages individuals can receive from government entities in these lawsuits. However, if the court decides not to extend sovereign immunity to ERCOT, this cap will not apply, and it will be legally possible for some individuals to pursue claims worth many millions of dollars.

If the court rules that ERCOT qualifies as a government entity, individuals may still be able to pursue claims based on the Texas Constitution. It requires that the government pay individuals when it takes something from them to provide for the greater good. ERCOT or local utility companies controlled rolling blackouts in Texas to protect the grid from a worse collapse. Those decisions involved sacrificing the power of some residents to benefit the majority. Some court cases may determine whether the property damage and even loss of life due to the intentional rolling blackouts can qualify for such claims under the state’s Constitution.

In addition to ERCOT, local utilities throughout the state might also be liable for failing to protect residents. Many injured individuals have already filed lawsuits against ERCOT and other entities, even though whether they can be held liable is still unclear.

Texas Personal Injury Attorneys

If you have sustained injuries, damages or losses due to ERCOT or other utilities, then you will want to consult with an experienced attorney who can fight on your behalf to get you compensated. The attorneys at Glen Larson Law are focused on representing Texas clients in Austin Personal injury attorney, wrongful death, and property insurance claims. We are here for you. To learn more about how we can help, call +15128830277 or contact us online.

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