Almost three years since the deadly Texas blackout of 2021, a panel of judges from the First Court of Appeals in Houston has ruled that big power companies cannot be held liable for failure to provide electricity during the crisis. The reason is Texas’ deregulated energy market.
The decision seems likely to protect the companies from lawsuits filed against them after the blackout. It leaves the families of those who died unsure where next to seek justice.
In February of 2021, a massive cold front descended on Texas, bringing days of ice and snow. The weather increased energy demand and reduced supply by freezing up power generators and the state’s natural gas supply chain. This led to a blackout that left millions of Texans without energy for nearly a week.
The state has said almost 250 people died because of the winter storm and blackout, but some analysts call that a serious undercount.
Deregulating the electricity industry has been a complete and utter disaster.
You have the right to food, clothing and shelter, and eventually they’ll rule those aren’t required either.
You must not be from the US…
I’m from and live in Texas, trust me, I realize how bad it is 😑
Better pull up those bootstraps and start finding your own individual source of power. Maybe you can drill for oil in your backyard?
But don’t do this by installing solar panels. That’s “woke!”
Don’t stop paying big power. Just ready yourself to die quietly when you’re supposed to.
During the storm one iirc Republican Texan politician said something along the lines of “you people need to solve it yourself”. They bought hard into private market solves everything.
It was Tim Boyd. He called the people complaining “socialists,” lol.
[People want electricity.]
“Is this socialism?”
But pretty sure the one I’m thinking of was a woman.
Then once you strike oil find out you never owned the mineral rights to begin with ¯\(ツ)/¯
Second only to the lack of responsibility that Texan judges have.
Corporations are people, my friend. Just people with all the rights and no responsibilities.
And no taxes or very little.
Yeah … SCOTUS.
If there are no people, there is no company. If there are no companies, people will survive.
That takes care of whatever stupidity SCOTUS was thinking when they made companies and people equal.
They’re not even equal. Corporations are given more freedom than actual people.
You can’t arrest a company. You apparently can’t even arrest the company’s executives for the company’s crimes.
I really want to figure out how to make a company and sell it all my debt.
You set up a company A. You also make a consultant company B. Company A hires very highly paid consultants from company B. Meanwhile you make paintings. You sell those paintings to company B at high prices with the money you got from company A. Now your debts are gone and company A is in debt. Fold company A and B. Add in some shell companies in the Bahamas if needed.
But, you need to have enough money to set up companies, have expensive accountants and lawyers, and to pay off some officials. You’ll have to be rich to become more rich basically.
Don’t follow this advice, it’s just fiction.
Were you born to rich parents?
Sadly no, I’ve been bootstrapping it.
You’re probably out of luck.
It’s called the Texas two step.
You file business papers in Texas and open an account there.
You use that business to buy all your underwater assets and other liabilities, leaving you free and clear. Then you declare bankruptcy with your Texas company, wiping out the debts. It what you do when grandpappy and the old board sold asbestos to everyone and their kids and now that you’re in charge you just want that to go away so you can enjoy your trust fund without fear of any destitute widows or their children trying to take any of it.
In any normal state, this is treated as a sham transaction or a straw purchase and is void ab initio. In Texas though, as a handout to the mining, chemical, and business insurance industries, you can follow none of the corporate formalities needed anywhere else to preserve your corporate viel, and just declare that your company is now two, unrelated companies, sort of like that movie Twins where, even though they are genetically identical and born at the same time from the same parents, one of the newborn companies has all the good stuff and the other has all the crap, and you can pretend it was separated at birth, like it never even existed. And that’s how you do the Texas two step. Step three actually is profit.
Hot take: The ruling is accurate.
Vote for candidates who privatize utilities. Get what you vote for.
Only sucks for those that can’t leave and are stuck with a system they can’t correct.
As one of those people who is stuck in the system I can’t correct: I agree.
I had to shit in grocery bags for a week because my toilet was frozen solid. But the blame only partly lies on the power companies. The vast majority of the blame lies on the regulatory agency who had the opportunity to require winterized gear for power plants… And repeatedly refused to do so.
Companies will always choose the cheapest option for whatever market they’re in. And winterizing all your gear is expensive when compared to… Well… Not. Could they have taken the initiative and winterized anyways? Absolutely. But if there’s one thing humans are generally really really bad at, it’s emergency preparedness. Because nobody wants to spend a ton of money building an earthquake-resistant home until after they experience their first earthquake. But that’s why building codes exist, to ensure everyone is forced to build to a minimum safe standard. To use this same metaphor, the building codes didn’t require winterized gear, so the companies didn’t build winterized gear. The fault primarily lies with the people who wrote the building codes, while knowing full well that the area could and would experience winter weather.
ERCOT is the regulatory agency that set those standards, and ERCOT is the agency that refused to require winterized gear. It wouldn’t be fair to penalize the power companies for failing to provide power, when ERCOT should have ensured their facilities were adequately prepared. It would also set a weird precedent to require companies to provide something in a disaster. Yes, they’re utility companies, and are subject to more regulation than most. But does this also mean they could be penalized for downed power lines during a tornado, or for blown transformers during a hurricane flood in Houston?
Right, but also power delivery shouldn’t be privatized at all. Sure the energy providers might not technically be at fault, but having a corporate middle man providing an essential service is ridiculous. We shouldn’t be talking about electricity providers as corporate entities at all. But you are still technically correct
I’m sorry you had to go through that, and even more sorry your vote isn’t joined by others in greater numbers.
That would take away their liberties!
Capitalism 👌
How can a power company realistically be compelled to provide power, in an emergency? They cannot guarantee that any more than a police officer can guarantee their ability to protect you.
Such a law could only be there to create scapegoats for politicians to hang after they botch the response to a natural disaster or some minor event that significantly disrupts power distribution.
SLOs and SLAs are a thing. And yes, they do and can guarantee power to enterprises that pay for it. So it’s not a matter of “if” but, like all things Texans, “how much”.
IMO it should be less about compelling them during an emergency as ensuring adequate disaster preparation and grid stability well before an emergency. Not much to do once the damage is already done other than figure out how to ensure it won’t happen again.
Friendly reminder about the event in question: the temperature wasn’t even THAT cold (minimum 0F IIRC). Much of the world deals with ice storms and freezing temperatures without the entire grid failing. I understand a state that deals with heat more than cold being less prepared for ice, but the lesson should need to be learned only once.
Of course, the problem as well as the solution was already recognized - distributed systems to provide redundancy. That would require being regulated nationally, which is far worse for them than some people dying.
This exact problem is systematised in software and other infrastructure regions. Even hospitals for example have backup generators.
The problem is that power companies making resilient grids eats into their profits and so they won’t do it unless they’re compelled to
Power companies don’t make grids its the independent operator, in Texas’ case ERCOT, who reported on this potentiality many times but did not receive direction to require facilities to cold proof their gas infrastructure or mediate the risk through gas storage etc. The power companies can’t be held liable for what wasn’t required of them and the regulator can’t because they publicized the risk and recommended it. Ultimately it’s the government at fault.
I’m on board with this. It goes to my original coment, though. It’s not just the government’s fault. It’s the people’s fault for electing them.
This is the same for other jurisdictions as well, it’s just that emergency situations will be investigated. The northeast blackout is another use case in North America and it happened in August so things were much different. We’ve had ice storms that took out transmission infrastructure too. Ultimately the regulator in Texas case actually reported on these risks and recommended changes to regulations.
Absolutely. Protecting profits and shareholders is priority #1.
GOP: “Cry more, peasants.”
First world, third world, and Texas.
Texas is a shithole, and even more insufferable are the Texan nationalists. It’s funny from a distance, but being there not so much.
Texas power plants have no responsibility to
provide electricitysave lives in emergencies, judges rule <- FTFYAfter all, why should they care if you suffer or die? There’s plenty more where you came from.
The judge just said that the lawmakers who wrote the law and were elected by the people to do that writing didn’t consider electricity as a requirement of the people they represented
Fucking Christ, did the judge calculate the amount of legally harvestable cord wood on their property as well?
Not angry at the posters for sharing facts, I’m just Angered by them.
I hate this fucking state so much.
In the opinion, Justice Adams noted that, when designing the Texas energy market, state lawmakers “could have codified the retail customers’ asserted duty of continuous electricity on the part of wholesale power generators into law.”
Wow, so helpful to say that 20 years after the fact
I agree with the problem, but I also kind of agree with the judge. The point of separation of powers is that the judicial system interprets the will of the legislative. We have had similar cases in Finland , where the law clearly should say one thing and the courts conclude that the law in fact says another thing. Fortunately, this situation occasionally leads the parliament into saying ‘well fuck’ and changing the law.
I will admit I don’t really understand the role of courts making law in the US and other common law countries, so it might be different there.
It’s a tough spot because most people, and maybe legislators themselves, didn’t think they had to write down “power companies must provide power to the best of their ability” and whatever other legalese that would force companies to do something about winterization. It feels like there should be an implicit “hey, if you’re aware of an issue that might kill people and destroy homes, maybe try to fix it.” The new laws around winterization are little comfort to those who have already lost loved ones to an avoidable problem. Of course, then you have litigious idiots who will sue because the tractor company didn’t say you shouldn’t try to play jumprope with the harvester blades. I don’t know what the solution is there, it seems we can only really be reactive.
Well, I guess the saying “regulations are written in blood” didn’t come from nowhere.
Well, they were providing it “to the best of their abilities”. With those maxed out prices, they were sure as hell trying to squeez out every kilowatt. Their abilities just sucked due to underinvsetment in reserve capacity. But you can hardly blame them for that. Unlike in most states, they don’t get paid for reserve capacity in Texas (and are not required to have any either). Therefore, whichever power company invests in it will have to raise prices, become uncompetitive and go bankrupt. Its not the companies to be blamed, its the politicians/officials who set up Texas electricity market like that. Capitalism can’t work if you don’t set up and regulate markets to align consumer and public incentives with company incentives.
I recommend practical engineerings video for technical details.
It’s not just about reserve capacity, ERCOT was warned about insufficient winterization after the last power grid failure due to cold weather, they just didn’t act on it. Should the Texas government have mandated improvements at that time? Absolutely. Do I still believe that ERCOT has at least some blood on their hands because they knew about the problem and chose not to fix it despite the hardship it could cause their customer base? Absolutely.
Also I have seen the practical engineering video, love that guy.
Unless I am missing something, ERCOT is a distributor. They don’t own the power plants and would have hard time forcing power plant owners to make those improvements without government mandate, no? Or does ERCOT already make similar regulations for plants?
My understanding is that ERCOT manages the reliability of the entire grid. I won’t pretend to understand the exact nature of their purview and powers, but I’ll defer to what Abott describes as their role in this incident:
Five days before the winter storm hit Texas, Abbott said ERCOT ensured officials that the power generator was prepared for the cold temperatures, and even issued notices to power plants to ensure they were winterized properly.
And the statement from ERCOT
ERCOT officials have said that some power generators implemented new winter practices after the freeze a decade ago, but they were voluntary.
Admittedly, I don’t know the extent of ERCOTs control over the individual companies that manage the generators or infrastructure of the power grid, but it does appear they had enough oversight to claim that the grid could weather another storm, which it could not.
Source: https://www.texastribune.org/2021/02/18/greg-abbott-winter-storm/
Well, even if they had no power to do anything, saying things have been fixed and are fine should make them liable. How should anyone (legislature, public) work on fixing the issue if they hide it? They should be the ones raising the issue in the first place.
Nah. Thanks for the info but I’m totally fine with blaming both the government and the shady utility company.
I mean, if it really is shady then blame away. I am just saying you can’t blame a company for not paying out of their own pocket for something the government should have secured.
It would be literally illegal for a corporation to do that. (breach of fedutiary duty, corporations are required by law to make as much profit for investors as they legally can. I am oversimplifying incredibly but it is mostly true)
The one time I remember something like that happening in the US was the 2003 Do Not Call telemarketing act. There was a court case that concluded that Congress had not properly authorized regulators to enforce the Do Not Call registry. Congress then took a day or two to pass a new law authorizing the thing they forgot to the first time.
This comes down to two things:
- Americans really, really hate taking telemarketing calls, regardless of party affiliation
- The telemarketing industry didn’t have significant lobbying at the time to tell anyone in Congress to argue against it
So bizarre, you’d think there would be some implicit realities of what is constituted by contracting for grid load power generation & even peaker plants. The grid has to be maintained to function and can’t lose frequency even if that does mean shedding there should be key named emergency services that should be maintained that would warrant liability on power generators. This is all upside with little cost or risk & also why there was no effort to coordinate because nobody is responsible.
As I understood it, critical circuits like hospitals were being prioritized and being kept (mostly?) online.
But house heating is generally not on a different circuit. They would normally rotate the houses which are blacked out so they would at least have power some of the time but this one was so bad all the power went into the priority circuits (like hospitals).
Cops don’t have to serve and protect or abide by the law. Power companies don’t have to supply power. People who sell you things can deny you access to them.
Hey this is fun, let’s do more!
Health Insurance companies don’t have to provide payment for health services you pay them to cover.
The whole social contract thing in the USA is giving off an EULA vibe these days.
Reminds me of Kimberly Latrice Jones’ chat.
that is the greatest compliment thank you
What a shit hole state.
Texans must love the abuse, they keep voting for it.
There’s also a lot of voter suppression and gerrymandering.
It’s not that they love it. They’re just so dumb they’ll be convinced it was the fault of the gays and/or trans people.
I just moved out of that state.
Never blamed anyone for leaving but use to advocate a lot to push for change in red states like mine but at this point its obvious they are trying to make living in those states untenable for those with a conscious or not completely crushed & apathetic.
Are you sure its not just Gerrymandering and laws that make it harder for votes to actually matter?
From what I’ve heard is that there’s a large majority stuck in Texas who disagree with the decisions of their government but are too poor to leave the state.
I’m sure gerrymandering is a large part of it.
Suckers with no self esteem.
This election’s got me so low
If they keep it up, people might pack up and go
Let me guess, if I don’t like it I’m free to start my own power generation company, in a city that’s had only one provider for over 60 years.
Oh no that’s California. In Texas there’s 500 providers and no service.
