CPS Energy Ordered to Pay $400M to Energy Transfer
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- CPS Energy was ordered by Texas 166th District Court Judge Laura Salinas to pay Energy Transfer close to $400 million for natural gas the utility purchased during Winter Storm Uri.
- The judgment against CPS Energy breaks down to more than $263 million in principal, $119 million in interest, and $9.3 million in attorney's fees.
- CPS Energy had sued two Energy Transfer subsidiaries in March 2021, a month after the February 2021 storm, alleging the company used the disaster as "pretext to price gouge" and displayed "predatory behavior."
- Judge Salinas rejected CPS Energy's claim, ruling the gas contracts were "not unconscionable" and must be enforced, siding with Energy Transfer.
- CPS Energy had argued it faced a "Hobson's choice" during the storm — pay any price for gas or lose supply needed to power critical infrastructure and meet "essential human needs."
- Yetter Coleman, the law firm representing Energy Transfer, countered that CPS Energy "failed to adequately prepare for that winter storm season" and suffered "ongoing plant failures" that limited power generation even while it had enough gas to serve customers and sell excess power into the wholesale market.
Why it matters: San Antonio ratepayers — CPS Energy is a public power utility — will ultimately absorb the roughly $400 million, costs that typically flow through to customer bills. The court also explicitly rejected the argument that storm-era gas contracts were "unconscionable," validating the extreme prices utilities were forced to pay and closing off the legal route CPS Energy tried to use to escape them.
