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ERCOT Is Refusing to Release Records On How it Prepared for the Winter Storm

The nonprofit corporation is asking Ken Paxton’s office for permission to ignore requests seeking information on the costliest winter storm in the state’s history.

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The Electric Reliability Council of Texas—the corporation at the center of the power grid failure that left millions of Texans with heat or power last month and dozens of deaths—is refusing to turn over records related to its preparation for and response to Winter Storm Uri. In a letter sent to Attorney General Ken Paxton’s office last week, ERCOT argued that it’s not subject to state open records law because it isn’t a public agency and have asked the AG’s office to rule as such.

Paxton’s office didn’t respond to inquiries seeking a timeline for its decision on the ERCOT letter, but generally the office has 45 business days to make a ruling on requests.

Joe Larsen, a Houston-based attorney who sits on the board of the Freedom of Information Foundation of Texas, an open records advocacy organization, says the refusal could spur a legal fight and possibly end up at the state Supreme Court’s doorstep. “There are going to be a bunch of people out there” seeking information from the electric grid operator, Larsen says. ERCOT’s oversize impact in everyday Texans’ lives, along with its central role in the blackouts and its outright refusal to comply with state open records law, could mean a hotly argued and closely followed legal case. 

In late February, the Observer submitted two public information requests to ERCOT related to the storm. One asked for emails and text messages from select ERCOT board members and top staffers before, during and after the polar vortex hit Texas. The second requested ERCOT’s communications with Vistra Energy, a Texas-based energy corporation company that claims it warned the grid operator of the impending danger days before the storm. The requests were intended to help answer questions about the disastrous power outage: How much warning did ERCOT have in advance of the storm and how did they prepare? How did ERCOT implement “rolling” blackouts across the state? And, ultimately, who’s to blame for the biggest power failure in the state’s history?

In its letter to Paxton’s office, ERCOT claims that it isn’t subject to state open records law because it already has a separate system for disseminating records that was set up by the Public Utilities Commission (PUC). The PUC is the state agency that oversees ERCOT. Attorneys with Hance Scarborough, the law firm representing ERCOT in its bid to withhold records, write that the nonprofit is under the “complete authority” of the PUC; therefore the PUC should get to decide which records are released, not the attorney general. Despite PUC and ERCOT’s arrangement, the PUC does not hold ERCOT’s records, and state law requires the request be made to the entity who holds the records. Only ERCOT holds ERCOT’s records; the PUC simply has the final say in what gets released. (The Observer has also filed a request under ERCOT’s separate records system.)

“These kinds of crazy structures are just not in the public interest,” says Adrian Shelley, director of the consumer rights group Public Citizen. “And if ERCOT is in part to blame for the recent disasters, then one would think that additional public oversight is in the public interest.”

ERCOT’s predecessor was formed in the 1930s by a group of utility companies for the express purpose of creating a grid independent of the federal government, says David Spence, a professor of business, government, and society at the University of Texas at Austin’s School of Law. “It was a funny little private organization just designed to avoid federal regulation,” he says. ERCOT came into its current form in 1970, but the nonprofit has still maintained its independence; after February’s deadly storm, ERCOT said it had “sovereign immunity” against lawsuits.

In Texas, anyone can ask a public agency for a record, and the agency has to comply or provide a reason why it won’t. If the agency refuses to hand over information, it will frequently ask the attorney general’s office for permission to withhold records. There are numerous legal loopholes that agencies employ to keep information out of the people’s hands and the list of exemptions grows after every legislative session. The AG, who has an office dedicated solely to open records, weighs any exemptions claimed by an agency and determines whether they have to give you what you asked for. Paxton’s office didn’t respond to a request for comment.

ERCOT did not respond to questions regarding the number of records requests it has fielded from good governance groups, industry analysts, news organizations, and regular people who want information on what happened during Winter Storm Uri. However, the nonprofit did email a list of the power generators that “had issues” during the storm to reporters on Thursday, along with the employment agreement between ERCOT and former President and CEO Bill Magness, who was fired last week. It wasn’t clear whether those disclosures were connected with ERCOT’s refusal to hand over other information.

The last notable open records case involving a nonprofit that serves traditional government functions was in 2015, when an economic development corporation called Greater Houston Partnership refused to turn over documents related to its activities. A requester wanted to know what the powerful business consortium that oversees the city’s economic development activities did with taxpayer money but the nonprofit fought the request all the way to the state Supreme Court. Justices eventually sided with the Greater Houston Partnership, but they also set a standard: If a significant portion of a nonprofit’s funding comes from the public, then the public gets access to its records. 

ERCOT argues this standard doesn’t apply. In its letter to Paxton, ERCOT admits that its funding stream of “system administration fees” could be considered public funds: “The system administration fee that funds ERCOT’s operations is collected pursuant to the State’s police power. Some requestors may therefore argue that ERCOT is a ‘governmental body’ because it ‘is supported in whole or in part by public funds,’” the letter reads. 

The statewide laws governing public information in Texas were created in the early 1970s partially to standardize records requests across the state. Before that, Texas had a piecemeal system with no overarching legislation regarding open records.

Larsen says that the separate set of records laws the PUC created for ERCOT runs afoul of the spirit of the Public Information Act. “This just can’t possibly fly where the PUC gets to set up its own parallel to the Public Information Act and gets to decide what its own exceptions are,” Larsen says.

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