Judge Orders CPS Energy to Pay Nearly $400M Over 2021 Winter Storm Gas Costs

A Texas judge has ordered CPS Energy to pay nearly $400 million to two Energy Transfer subsidiaries after ruling the San Antonio utility breached natural gas contracts during Winter Storm Uri in February 2021.

What did the court rule?

State District Judge Laura Salinas ruled that CPS Energy breached contracts with Houston Pipe Line Company and Oasis Pipeline, both subsidiaries of Energy Transfer, for natural gas purchased during Winter Storm Uri.

In a final judgement signed July 2, the court awarded:

• Nearly $264 million in unpaid contract amounts.
• About $119 million in prejudgment interest.
• More than $9.3 million in attorneys' fees.
• Court costs and post-judgment interest.

The ruling follows a 12-day bench trial that concluded in April.

Why was CPS Energy sued?

The lawsuit stems from the 2021 winter storm, when record demand and widespread power outages caused natural gas prices to surge across Texas.

Energy Transfer argued that CPS entered into valid contracts for natural gas deliveries during the crisis but later refused to pay the full amount owed.

The court found that:

• Houston Pipe Line Company and Oasis Pipeline billed CPS Energy approximately $309 million for gas delivered during the storm.
• CPS Energy paid nearly $52 million.
• The utility withheld roughly $264 million while disputing the charges.

Judge Salinas rejected CPS Energy's argument that the prices were unconscionable.

In her findings, she concluded: "CPS breached the contracts."

She further ruled: "The contracts are not unconscionable and must be enforced."

How is CPS Energy responding?

CPS Energy said it is disappointed with the decision and is evaluating its options for an appeal.

In a statement, the utility said: "CPS Energy is disappointed by the court's decision, which will cost this community more than $390 million and may effectively end a key legal safeguard against grossly unfair treatment for essential services like natural gas during the next statewide disaster."

What does this mean for customers?

CPS Energy spent approximately $850 million on fuel during Winter Storm Uri.

Customers are already repaying a portion of those storm-related fuel costs through a monthly subcharge of about $1.26 on the average residential electric bill, a charge expected to remain in place for roughly 21 more years.

The utility has not announced whether the court's ruling will affect customer rates.