A state district judge in Texas issued a final judgement against CPS Energy on Thursday, ordering the utility to pay close to $400 million to midstream energy company Energy Transfer for natural gas purchased during Winter Storm Uri.
CPS Energy sued two Energy Transfer subsidiaries in March 2021, a month after Winter Storm Uri, alleging that they had used the storm as pretext to price gouge and displayed “predatory behavior.”
“Texas law abhors attempts to leverage a disaster for profit,” CPS Energy argued. “Defendants’ price gouging sales are unlawful, against Texas public policy, and unconscionable. While CPS Energy will pay lawful amounts due under its gas sales contracts, it will not pay prices that reflect unlawful and unconscionable price gouging in violation of Texas law and public policy.”
Judge Laura Salinas of the Texas 166th District Court ruled against this argument, rendering judgment for the defendant, Energy Transfer, according to reporting from Texas Public Radio.
Salinas ordered CPS Energy, a public power utility based in San Antonio, to pay Energy Transfer more than $263 million plus costs, including interest in the amount of $119 million and $9.3 million in attorney’s fees.
In her written findings, Salinas ruled that CPS Energy had breached its contracts with Energy Transfer’s subsidiaries, that the contracts were “not unconscionable” as CPS Energy had alleged, and that they must be enforced, Texas Public Radio reported.
CPS Energy said in its 2021 lawsuit that the gas it required during Winter Storm Uri “was critical to meet essential human needs for residences and businesses, to save lives, and to prevent substantial damage to property. As a result, utilities such as CPS Energy had no choice but to continue to search for and purchase natural gas at any price, no matter how high, that sellers were choosing to charge in this distressed and disrupted market.”
“As prices skyrocketed, CPS Energy faced a Hobson’s choice: Pay an exorbitant price for gas or run out of the gas supply it needed to power critical infrastructure and serve its gas customers’ critical human needs,” the utility said. “At the mercy of Defendants and with no other alternative, CPS Energy purchased natural gas from Defendants at unconscionable prices and continued to do so for the duration of the statewide disaster.”
Yetter Coleman, the law firm which represented Energy Transfer in this lawsuit, said in a Monday release that in court it showed evidence that CPS Energy “failed to adequately prepare for that winter storm season and relied on risky natural gas buying strategies … The firm proved that CPS had ongoing plant failures in the storm that limited its ability to generate electricity, despite having enough gas to serve customers and even sell excess power into the state’s wholesale market.”
