Over 100 insurance companies have filed a joint lawsuit against the Texas power grid operator and power generating companies behind the electric grid failure following the devastating 2021 Winter Storm Uri. The historic storm resulted in over half a million insurance claims and roughly $10.3 billion in insured Texas losses.

The lawsuit was filed in late December in Travis County District Court. In it, the plaintiffs allege that 37 power generating companies (PGCs) along with operator Electric Reliability Council of Texas (ERCOT) failed to prepare the power grid for the severe cold that settled in during the winter storm. Despite the warnings of the extreme weather events, the complaint details that the defendants are guilty of gross negligence. The lawsuit explains that ERCOT and the PGCs “failed to adequately prepare for the 2020/21 winter season, and in fact, planned to fail.” Because of this failure to plan adequately, the failed power grid “caused significant property damage to the policyholders of plaintiffs.”

The 84-page complaint goes on to detail that ERCOT’s own meteorologist predictions showed that the upcoming storms could pose a risk to Texans. Their projections for the 2020/2021 winter seasons detailed that the state “would be thrown into the highest state of emergency” in the event an extreme weather system came through.

As a result of the cold, commercial and residential buildings lost heat, suffered from burst water pipes, and experienced extended blackouts. Because of these failures connected to the power grid, officials detailed that at least 246 individuals died as a result of the severe weather conditions.

By July 31, 2021, there were over half a million claims reported to insurance companies according to the Texas Department of Insurance report. The report details that the average claim for a residential property was $15,800, while the average commercial property insurance claim was $126,900. Over 85% of the claims made last year came from residential properties.

Following the devastating storm, lawmakers passed several pieces of legislation which they deemed to be reformative to prevent a similar failure from occurring. Among those reforms included the mandate of winterizing equipment. ERCOT also shared that they did inspections of generators that accounted for at least 80% of power loss during last year’s storm.

ERCOT has not responded to the lawsuit, but a spokesperson for the company shared that they do not comment on pending litigation. The plaintiffs are seeking unspecified compensation for the payments insurance companies made on behalf of claims which were filed because of the storm. The plaintiffs are seeking a jury trial and are asking the court to consider subrogation. Under subrogation, an insurance company would be allowed to recoup losses including a customer’s deductible, from the party at fault.