Supreme Court
Pub. Util. Comm’n of Tex v. Luminant Energy Co.
- Case number: 23-0231
- Legal category: Administrative Law
- Subtype: Public Utility Commission
- Set for oral argument: January 30, 2024
Case Summary
This case raises questions of administrative law and judicial authority. The first issue is whether the Public Utility Commission exceeded its statutory authority by twice directing the Electric Reliability Council of Texas to affix electricity prices at $9000/MWh. The second issue is whether the court of appeals had the power, two years later, to unwind transactions with final settlement prices based upon those expired directives.
During Winter Storm Uri, the electrical power grid—overseen by the Commission through ERCOT—failed to produce enough power to meet extreme consumer demands. This failure was partially due to an error in the Commission’s electricity-pricing algorithm. When the algorithm functions properly, then as demand increases, prices should increase to signal to, and provide an incentive for, energy generators to produce more energy. But the algorithm did not account for load shedding—targeted blackouts to protect the grid’s physical integrity—necessitated by the storm’s historically unprecedented severity. In response, the Commission issued two directives to ERCOT to set the price at the maximum $9,000/MWh allowed under the Texas Administrative Code.
Luminant sought judicial review directly in the Third Court of Appeals, as authorized by statute, and several parties intervened on both sides. The court issued an opinion reversing the Commission’s orders more than two years after the appeal was filed. After rejecting mootness and other jurisdictional challenges to the appeal, the court held that the Commission had exceeded its statutory power under the Public Utility Regulatory Act by setting an anti-competitive price of $9,000/MWh.
The Commission petitioned for review, arguing that the court of appeals lacked jurisdiction to grant Luminant’s desired relief and that the Commission had acted within its statutory authority. The Supreme Court granted the petition.
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