The Independent View: Judge Says TX Laws Restricting Power Business Discriminatory

When it comes to Power, Texans have to Share. At least that's what U.S. District Court Judge Robert Pitman Ruled in favor of Florida-based NextEra Energy and New York-based LS Power, who Filed a Lawsuit with East Texas Electric Cooperative against the Public Utility Commission (PUC) of Texas, alleging the State was Blocking them from building New Transmission Lines.

The PUC was Operating in accordance with State Law. Texas Senate Bill 1938, Passed in 2019, explicitly Notes that "owners of an existing transmission facility in Texas" only have "the ability to build, own, or operate new transmission lines."

But, according to the Suit, "NextEra alleged that SB 1938 was unconstitutional under the Commerce Clause, because it discriminates against Interstate Commerce on its face, in effect, and in purpose."

The Commerce Clause describes an Enumerated Power listed in the U.S. Constitution (Article I, Section 8, Clause 3). The Clause states that the U.S. Congress shall have Power: "to regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes".

NextEra had been trying to enter the Texas Power Market for years, working within PUC Guidelines stating that Out-of-State Utilities without Presence in the Lone Star State, could build Lines in Two areas not Maintained by the Energy Reliability Council of Texas (ERCOT). These areas are maintained by the Midcontinent Independent System Operator (MISO) and Southwest Power Pool (SPP).

The Lawsuit says that in 2017, the Company had closed in on buying Transmission Lines in the SPP area in East Texas.

Then in 2018, NextEra's Corporation that builds Lines in the Midwest entered into an Agreement with MISO. But according to the Suit, NextEra's attempts at entering the Texas Market paused once SB 1938 went into effect.

NextEra filed a Lawsuit against the PUC in 2019, and its Agreement with MISO has been On-Hold ever since.

Pittman's Ruling includes a Permanent Injunction, allowing Out-of-State companies such as NextEra and LS Power, to go forward with the Projects in the areas Not maintained by ERCOT, whether they're Buying up Existing Lines or building New Ones.

Subsidiaries of Xcel Energy and Entergy, which have Lines in Texas, Opposed the Out-of-State Plaintiffs and Defended SB 1938.

"While we are disappointed with the court’s decision, we are evaluating our next steps and we remain committed to strongly advocating for rights of first refusal in transmission development," Xcel said in a Statement.