A Texas state district judge ordered CPS Energy to pay nearly $400 million to Energy Transfer for natural gas purchased during Winter Storm Uri, rejecting the San Antonio utility's claims of price gouging. Judge Laura Salinas of the Texas 166th District Court issued the final judgment Thursday, ruling that CPS Energy breached its contracts with Energy Transfer's subsidiaries and must pay for gas delivered during the February 2021 storm that left millions of Texans without power.
The judgment requires CPS Energy to pay Energy Transfer more than $263 million plus additional costs, according to reporting cited in the article. Interest on the unpaid amounts totals $119 million, and the utility must also cover $9.3 million in attorney's fees. CPS Energy had sued two Energy Transfer subsidiaries in March 2021, one month after Winter Storm Uri, alleging they used the storm as pretext to price gouge and displayed "predatory behavior." Judge Salinas ruled that the contracts were "not unconscionable" as CPS Energy had alleged and that they must be enforced.
In its 2021 lawsuit, CPS Energy argued that "Texas law abhors attempts to leverage a disaster for profit" and claimed the Energy Transfer subsidiaries engaged in "unlawful and unconscionable price gouging." The utility said 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." CPS Energy maintained that it "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."
Yetter Coleman, the law firm representing Energy Transfer, countered that evidence showed 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 during 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. The ruling suggests that contractual obligations held firm even during a state disaster, and that utilities can't avoid payment for delivered goods by claiming market conditions made prices unconscionable. CPS Energy now faces a $400 million bill more than five years after the storm that exposed vulnerabilities in Texas's energy infrastructure.