A hearing is scheduled for Tuesday, March 9, in the 16th Judicial District Court on Denton officials’ application for a temporary injunction against the Electric Reliability Council of Texas.
They filed a lawsuit on Thursday alleging “unconstitutional use of public funds.” The city’s core argument is related to the way ERCOT, the entity that oversees energy distribution in Texas, paid for electricity during rotating power outages from Feb. 15-17.
It has since been well documented that the bulk of the grid’s missing energy production was because of natural gas and oil energy providers that hadn’t properly winterized infrastructure. Other energy providers, such as wind-powered generators, also failed because of a lack of winterization.
“In an ill-advised attempt to use ‘market forces’ to address a scarcity that was caused by nature and by poor planning,” the Public Utility Commission and ERCOT raised energy prices to unprecedented levels, according to legal filings.
Essentially, Denton attorneys argue, ERCOT has invoked a mechanism by which it “spreads the cost” of municipalities unable to pay exorbitant energy bills onto other municipalities, including Denton. For example, a city unable to pay part or all of its energy bill to ERCOT because of the sky-high costs imposed during the weather crisis would have its debt pushed onto other cities.
The city of Denton contends “cities are barred from making such payments.”
In a legal filing, city attorneys cite an article in the Texas Constitution that claims “a city has no power ‘to lend its credit or to grant public money or a thing of value in aid of, or to any individual, association, or corporation whatsoever.’”
Ultimately, the city is seeking a permanent injunction that would, in part, keep ERCOT from demanding payments to cover others’ debts and keep ERCOT from taking action against the city for not making those payments.