Ohio insurance company refuses to defend ERCOT, pay damage claims from Texas winter storm lawsuits

AUSTIN (KXAN) — The Electrical Reliability Council of Texas might be left to pay for the authorized protection and damages ensuing from greater than a dozen lawsuits filed in opposition to the state’s energy grid supervisor following the February storm.

The storm left greater than 4.5 million Texans with out energy.

The storm is blamed for the deaths of 125 individuals throughout the state, in line with the Texas Division of State Well being Companies. Nearly all of the deaths resulted from hypothermia, the state says.

Inside days of the storm, tales of Texans freezing to dying started exhibiting up throughout the state.

One included Cristian Pindea, 11, from Conroe, whose mother and father stated spent a part of the day enjoying within the snow. The household stated energy was reduce to their cell residence and temperatures inside dipped to 10 levels at one level.

Pineda’s mother and father informed reporters they discovered the boy useless in his mattress the subsequent morning. Lawmakers mentioned Pineda’s dying many occasions throughout Feb. 25 legislative hearings into the state’s energy grid failure.

The Cincinnati Insurance coverage Firm, headquartered in Ohio, filed a federal swimsuit on Tuesday asking a court docket for a declaratory judgement, permitting the insurer to say no paying damages in bodily damage or property injury lawsuits the place ERCOT is discovered to be liable.

If the federal court docket doesn’t grant the declaratory judgment, the Cincinnati Insurance coverage Firm would possible must cowl ERCOT below its present coverage contract.

Cincinnati and ERCOT entered into the coverage on June 1, 2019 and the coverage was set to run out on June 1, 2022.

As of March 4, ERCOT’s insurers acquired 19 lawsuits alleging ERCOT was liable for lack of life, bodily damage and property injury ensuing from the lack of energy throughout the state.

On March 18, The Cincinnati Insurance coverage Firm notified ERCOT it was performing its personal protection investigation. ERCOT didn’t reply to the insurance coverage firm’s data requests, in line with the lawsuit.

The federal court docket submitting lists the next circumstances as at the moment pending in opposition to ERCOT and others:

“There isn’t a obligation to defend or indemnify the Underlying Issues as a result of there isn’t a incidence. To ensure that there to be an incidence, there have to be an accident. An accident is a fortuitous, sudden, and unintended occasion,” attorneys for The Cincinnati Insurance coverage Firm wrote within the federal court docket submitting.

“Not one of the allegations within the Underlying Lawsuits assert that the alleged damages had been brought on by any accident. In truth, every asserts info on the contrary. The allegations within the Underlying Lawsuits allege ERCOT both knew, ought to have identified, anticipated, and/or supposed, that Winter Storm Uri would trigger the identical energy outages which occurred on account of earlier storms in Texas, together with storms in 1989 and 2011,” the swimsuit continued.

A winter storm hit Texas in February 2011, slicing energy to greater than three million Texans then. A federal investigation into Texas’ energy grid failure then confirmed Texas’ failure to winterize its energy grid led to the statewide outages, which lasted for days for some Texans.

The 2011 Federal Power Reliability Fee report detailed a number of steps Texas ought to take to winterize its energy grid. Laws mandating winterization by no means handed and ERCOT’s Chief Govt Officer testified earlier than a Texas Senate committee on Feb. 25 that mandates to winterize had been nonetheless not in place when the winter storm of 2021 hit Texas.

The 2011 report detailed 9 findings — half of these handled Texas’ lack of winterization inside its energy grid. Regulators wrote the phrase “winterization” a complete of 92 occasions within the report.

“The Underlying Lawsuits allege the facility outages brought on by Winter Storm Uri had been a results of the very same failures together with failures of the identical turbines which failed within the earlier winter storms, and subsequently, the facility outages had been foreseeable, anticipated, and/or supposed,” the Cincinnati lawsuit argued.

ERCOT desires Cincinnati to pay to defend the lawsuits and to pay any damages arising from them, in line with the insurer’s federal swimsuit.

A message left for ERCOT’s media staff requesting touch upon the lawsuit had not but been returned as of the posting of this report.