Winter Storm Uri

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On March 17, 2023, the Texas Court of Appeals for the Third District issued an opinion reversing two winter storm Uri orders by the Public Utility Commission of Texas (PUCT) that had raised power prices in ERCOT to $9,000/MWh. ERCOT, the Electric Reliability Council of Texas, manages the electric grid for most, but not all, of Texas and serves approximately 26 million customers.

The decision by the Court of Appeals in Luminant Energy Company LLC v. Public Utility Commission of Texas, No. 03-21-00098-CV, has the potential to affect certain transactions made under the PUCT’s orders. The Court of Appeals not only reversed the PUCT’s orders but remanded them for further proceedings. Should the Court of Appeals’ opinion be upheld, it is unclear how the PUCT will resolve the pricing issues, but it would likely need to hold proceedings to address them. The opinion also raised questions about the authority of the PUCT to issue price caps for Texas’ energy market. Continue Reading PUCT Winter Storm Uri Orders Reversed and Remanded by Texas Court of Appeals

On Feb. 15, 2023, the U.S. District Court for the Northern District of Texas held that the force majeure provision contained in the parties’ contract applied to excuse performance even if the event — Winter Storm Uri — did not render performance impossible.

In MIECO LLC v. Pioneer Natural Resources USA, Inc., 2023 WL 2064723, the parties had entered into an agreement in which MIECO (Buyer) would purchase 20,000 million British thermal units of natural gas from Pioneer (Seller) each day from Nov. 1, 2020, to March 31, 2021. But from Feb. 14, 2021, to Feb. 19, 2021, Pioneer failed to deliver the full amount of the contracted natural gas due to Winter Strom Uri. On Feb. 16, 2021, Pioneer sent MIECO a notice of force majeure.Continue Reading Winter Storm Uri Qualifies as Force Majeure, Even When Performance Was Not “Impossible”