ERCOT faces class-action lawsuit, resignations in wake of Texas power outages

Texas’ embattled power grid operator is facing lawsuits and resignations after more than 4 million customers lost electricity last week during a deadly winter storm.

Morgan & Morgan, a Florida-based national law firm with over 700 attorneys, filed a class-action lawsuit on Tuesday against the Electric Reliability Council of Texas (ERCOT), alleging that the nonprofit corporation "utterly failed" to plan for the cold weather despite multiple warnings, leading to the collapse of its electrical network and resulting in widespread blackouts.

"Despite receiving multiple unambiguous warnings, ERCOT’s alleged failure to ensure reliable generating capacity during anticipated conditions forced many of its customers to endure dangerous freezing temperatures for long periods of time," attorneys Mike Morgan and Rene Rocha said in a statement Tuesday. "This was not the first time ERCOT has failed to plan and prepare for cold weather. But instead of learning the lessons of its past failures, ERCOT yet again disregarded its duties to its customers. Over 70 people have died and millions of others have suffered emotional and physical trauma due to ERCOT’s alleged gross negligence."

ABC News has reached out to ERCOT for comment.

The lawsuit was filed in a district court of Texas' Harris County on behalf of a putative class that includes all current retail customers of ERCOT -- millions of Texans -- "who lost electric services or potable water services during the week of February 14, 2021 as a result of ERCOT’s failure to ensure adequate generating capacity," according to the complaint.

ERCOT, which manages the flow of electric power to more than 26 million customers in Texas, representing 90% of the state's electric load, allegedly received warning as early as Feb. 9 that an impending winter storm may jeopardize the integrity of its electrical network if reasonable measures were not taken, according to the complaint. Texas Gov. Gregg Abbott, who has been critical of ERCOT in the storm's aftermath, issued a disaster declaration in all 254 counties on Feb. 12 ahead of the severe weather, which the lawsuit argued "should have further emphasized the need for ERCOT to take appropriate measures to ensure system performance under the anticipated conditions."

The storm moved into Texas on Feb. 14, blanketing the Lone Star State in snow and ice. During a press briefing last Thursday, ERCOT president and CEO Bill Magness admitted that the Texas power grid had been just "seconds or minutes" away from a complete and catastrophic failure, as power demand increased and generators fell offline on the night the storm hit. By the morning of Feb. 14, more than 4.4 million customers were without power in Texas, according to data collected by PowerOutage.US.

The extended power outages combined with record-low temperatures caused freezing pipes to burst across the state, depleting water reserves. Millions of people were also under a boil-water advisory due to concerns about potential contamination as water treatment plants suffered power outages.

Mariaelena Sanchez, the named plaintiff in the lawsuit, was among those who lost electrical services and potable water for "several days" due to ERCOT's alleged failures to plan and prepare for the deep freeze, according to the complaint. Sanchez was forced to "huddle under blankets in her dark and freezing home and ration scarce supplies of bottled water. During that time, Sanchez had to use snow to preserve "the little food she had that was not spoiled by the outages," according to the complaint.

The lawsuit alleged that the "total state energy demand during the cold weather event peaked at around 69,000 megawatts -- significantly less than the total capacity of the ERCOT system or typical peak demands in summer." ERCOT allegedly failed "to reserve enough capacity to meet such foreseeable demands" as well as "to assess the integrity of its infrastructure, the environmental limitations of its power sources, and how abnormally cold weather may impact the availability of its power sources," according to the complaint.

Although winter storms are not as common in Texas as elsewhere in the United States, the complaint noted that the state has experienced a number of cold weather events over the past few decades. The lawsuit alleged that "ERCOT has repeatedly disregarded its responsibilities" throughout the years to plan and prepare for the effects of cold weather on its electrical grid. The complaint cited winter storms in 1989 and 2011 that caused ERCOT's systems to fail, resulting in widespread blackouts and human suffering.

The lawsuit is demanding a jury trial and is seeking class certification, injunctive relief, damages and litigation costs for the named plaintiff as well as all other class members proposed in the complaint.

This is not the only lawsuit to hit ERCOT in the wake of the historic cold snap. The family of an 11-year-old boy who died during last week's power outages in Conroe, about 40 miles north of Houston, filed a $100 million lawsuit against ERCOT and Entergy Texas, an electric power generation and distribution company.

Meanwhile, ERCOT's top board leaders announced Tuesday that they will step down amid outrage over the corporation's handling of the storm. Four board directors, including the chairwoman and vice chairman, submitted their resignations, which are effective Wednesday. A candidate for a board director position also said he was withdrawing his name from consideration. All five live outside of Texas, which only intensified scrutiny of ERCOT.

In a letter to ERCOT board members on Tuesday, the four departing leaders noted the "recent concerns about out-of-state board leadership."

"We want to acknowledge the pain and suffering of Texans during this past week," they wrote. "Our hearts go out to all Texans who have had to go without electricity, heat, and water during frigid temperatures and continue to face the tragic consequences of this emergency."

In a separate letter to the Public Utility Commission of Texas, which oversees ERCOT, the board director candidate said he was requesting the withdrawal of his name "to avoid becoming a distraction," citing "concerns regarding the propriety of out-of-state directors."