City of Denton v. Electric Reliability Council of Texas, Cause No. 21-1421-16
On February 25, the City of Denton filed suit against the Electric Reliability Council of Texas (ERCOT) in the District Court of Denton County seeking to prevent the unconstitutional use of public funds. The City of Denton owns and operates Denton Municipal Electric (DME). ERCOT manages the statewide electric grid in Texas.
ERCOT is using a mechanism within its protocols known as “uplift”. Due to the recent record-high wholesale energy prices, some ERCOT market participants have failed to pay ERCOT for power purchases. Ultimately, uplift may spread the costs of those ERCOT market participants to other market participants, including DME.
The City views the payment of the costs of other utilities as an unconstitutional gifting of public funds and unconstitutional lending of its credit. The City of Denton will explore all legal options to protect the financial assets of the City of Denton and its ratepayers from improper use.
DENTON, TX, June 15, 2021 – The lawsuit filed by the City of Denton against the Electric Reliability Council of Texas (ERCOT) has been dismissed under the judge's order on ERCOT's previously filed plea in abatement. A hearing regarding these filings was held on May 10. The City has until July 6, 2021 to appeal this ruling.