Texas plastics company alleges unauthorized fees after winter storm in lawsuit against energy provider

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Published Saturday, June 12, 2021
by Robert Davis | The Center Square contributor

(The Center Square) - A plastics company from Royse City, Texas, is suing Iowa-based MidAmerican Energy Services for allegedly passing through unauthorized fees to commercial customers who are on fixed-rate service plans.

In the lawsuit, J&M Plastics contends that it received a statement from MidAmerican in April for $54,000 for "ancillary services" relating to the ice storm in February that knocked power out in nearly the entire state. That total is nearly three-times higher than the normal bill rate, J&M said.

The document goes on to argue that MidAmerican's service contract contains a fixed-price clause for all "costs associated with line loss...and other costs required to facilitate delivery of electricity to Customer's Delivery Points."

J&M alleges that MidAmerican notified its customers that it would violate this clause to recoup "non-energy costs" associated with the storm that were really caused by the Energy Reliability Council of Texas (ERCOT), which is responsible for maintaining Texas' energy grid.

MidAmerican contends that the company didn't violate the agreement because they didn't increase the energy component of J&M's bill.

Derek Potts, the lawyer representing J&M in the case, said MidAmerican's claims don't pass the sniff test.

"MidAmerican has already acknowledged that it can't pass through these same costs to their residential and small business customers, because of the Public Utility Commission's consumer protection regulations," Potts said in a statement. "But the company's still trying to unlawfully use a statewide disaster to take advantage of and price-gouge thousands of larger commercial customers."

The four-day storm in February caused the state's power operators to lose control of the power supply. In turn, millions were left without power and ice made many roads impassable.

The state reported that 151 people died during the storm. Another count by Buzzfeed suggested that the total may be closer to 700.

State lawmakers called for investigations of ERCOT to try to understand the root cause of the power grid failure. During the legislative session, lawmakers passed two bills--Senate Bill 2 and 3--that require energy companies to be better prepared for extreme weather events.

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