Insurance companies are suing ERCOT for damages caused by February winter storm

More than 100 insurance companies are suing ERCOT and dozens of power generation entities for the grid outage during last February’s winter storm.

A report estimates that insurers had to pay more than $10 billion in losses.

This lawsuit, filed by dozens of insurance companies, alleges ERCOT was responsible for last year’s power outage and claims it could have been avoided.

As we head into the first winter season after last February’s power outage, Texans are hoping the grid is better prepared for the cold.

While many are looking ahead, dozens of insurance companies are still focused on 2021.

The companies filed a joint lawsuit in Travis County against ERCOT, the state’s main electric grid operator.

The massive blackout in February 2021 resulted in over 500,000 insurance claims being filed and over 200 deaths.

“The purpose of this lawsuit is to recover those costs,” said Rich Johnson of the Texas Insurance Council (ICT).

ICT is not involved in the lawsuit.

Johnson said while this large-scale lawsuit is not common in recent Texas history, similar actions have been taken in other states.

“I know in California there were a few lawsuits that were settled with insurance companies and their power companies because of wildfires in 2017, 2018,” Johnson explained. “There have been massive wildfires where it has been discovered that lack of maintenance was the cause of several wildfires.”

FOX4 has contacted ERCOT for comment, but has not received a response.

The lawsuit claims that ERCOT “failed to adequately prepare for the 2020-2021 winter season and, in fact, planned to fail.”

After widespread backlash and finger pointing at ERCOT, the Public Utilities Commission and Gov. Greg Abbott, lawmakers passed several laws they called reforms.

A law made it mandatory to winterize equipment, but left multiple loopholes for energy companies.

ERCOT recently said it carried out inspections on generators that accounted for 80% of power loss last year.

Johnson said the trial can be a long process.

RELATED: After Inspection, ERCOT Says Texas Power Grid Is Prepared For Harsh Winter

“Citizens can recover some of their out-of-pocket costs. So if they had a deductible on their home or car that was damaged, they may be able to recover the costs if it’s part of the settlement or if it’s does the insurer, if that’s if that’s what’s going on in this process,” he said.

Last month, ERCOT said it had received all but one of the generator winterization reports.

This is a new requirement from the Public Utility Commission.

Kristan F. Talley