As Texas nears the first anniversary of the freeze that left much of the state without heat and electricity for days, more than 100 insurance companies are suing Texas' main power grid operator as well as a host of electricity companies.

The suit blames the Electric Reliability Council of Texas — and companies that supply electricity into the ERCOT system — for the energy failure and the significant property damage that followed. Austin Energy is not a listed defendant in the case, but other lawsuits have taken aim at the city-owned utility.

ERCOT "failed to adequately prepare for the 2020-2021 winter season, and in fact, planned to fail," the suit argues, citing ERCOT's projections that if an extreme weather event occurred in Texas, the state would be thrown into the highest state of emergency.

As of July, insurers indicated they had 500,196 freeze-related insurance claims and expected to ultimately pay about $10.3 billion in losses from the event, the Texas Department of Insurance reported. The majority of claims were residential.

The insurers in the lawsuit said they've paid damages above the legally required minimum, and ERCOT should compensate them as a result.

"Defendants failed to properly prepare for a widely predicted, forewarned and entirely foreseeable event," the suit says. The defendants "even — despite multiple warnings by state and federal agencies — failed to winterize their facilities and equipment, so as to cause the power generating equipment to stop working."

ERCOT declined to comment on the pending litigation.

ERCOT — a consortium of consumers, energy cooperatives, utilities and other power providers — manages the electric grid for more than 26 million Texas customers who represent about 90% of the state’s electric load. The nonprofit corporation is overseen by the state's Public Utility Commission and the Texas Legislature.

After the February disaster, Texas lawmakers mandated for the first time that power generators on the grid be required to winterize their facilities. New reporting requirements also were implemented to improve communication across energy sectors, in preparation of an emergency event that might require generators to cut off electricity to some users.

The Texas Public Utility Commission also recently approved a blueprint for changes to the Texas electricity market to shore up the grid. 

However, energy experts say state leaders' guarantee that the grid will function this year is risky and could discourage people from taking necessary steps to prepare for an outage. 

ERCOT released a report last month indicating that it had received all but one of the 847 winter readiness reports required to be submitted as part of the PUC's new winterization mandates for generators. Still, nearly 30% listed a "good cause for non-compliance" with some part of the winterization rules.

https://www.statesman.com/story/news/2022/01/07/over-100-insurance-companies-sue-ercot-over-claims-related-february-freeze/9106055002/?itm_medium=recirc&itm_source=taboola&itm_campaign=internal&itm_content=SectionFrontFeed-FeedRedesign