Seen at I-10 and Sawyer
Michael Fertitta, son of Rockets owner and Landry’s Inc. CEO Tilman Fertitta, is one of three lawyers representing plaintiffs in a lawsuit against CenterPoint Energy in the wake of Hurricane Beryl.
The lawsuit, which was filed on behalf of all Houston residents who lost power, claimed CenterPoint’s response in the aftermath of Beryl constituted fraud, gross negligence and created a public nuisance. The firm is hoping to get it certified as a class-action lawsuit.
“Despite the frequency of storms, CenterPoint failed to prepare the grid against a predictable weather event and has refused to take accountability for their incompetencies and system’s failure.” the plaintiffs’ original petition stated. “CenterPoint’s grid is one of the most unstable despite being in a hurricane-prone location.”
[…]
The plaintiffs accused CenterPoint of failing to devote adequate resources — both in terms of tree maintenance and available linemen — in preparation for Beryl, which made landfall ten days ago. In some cases, the plaintiff’s claimed the company failed to trim trees overhanging power lines for years.
“Customers have reported that trees on their property have not been trimmed in over five years, despite the fact the trees were touching the wires on their property,” the suit alleged. “Those trees were in prime position to take out power lines, and on July 8, they did so.”
A representative for CenterPoint told the Chronicle that the company does not comment on ongoing litigation.
The company’s communication with customers also plays a central role in the plaintiffs’ allegations. The suit claimed CenterPoint committed fraud by allegedly lying about the number of lineman on standby.
The company’s outage map, which was released shortly after the storm, also misled customers into believing they had power when they did not, the lawsuit alleged.
“Many of its customers received inaccurate, false statements regarding the restoration of power,” the suit stated. “CenterPoint either knew that these representations were false when it made them or it made these representations recklessly.”
Add this to the Buzbee/restaurants lawsuit. I’m sure there will be others.
Here are some questions I would like to see addressed the next time there is a story about one of these lawsuits:
1. What has to happen for this to be certified as a class action lawsuit? What happens if that certification is denied?
2. If the Feritta lawsuit is certified as a class action, what if anything do we the plaintiffs have to do to collect on whatever damages there may be?
3. How likely are any of these lawsuits to succeed? If they win at the district court level, how likely are they to survive the appeals process?
4. How long is it likely to take to get to a resolution?
Not all of these questions have straightforward answers, of course, but some informed speculation based on similar lawsuits from the past would be fine. Right now, I have no idea what to expect. Are all the usual lawyer and law professor media contacts on vacation right now or something? Please send help.
There is an important story on the Channel 11 site that gives up the game. Ed Hirs spells out the facts that due to state policies for public utilities, these monopolies like CenterPoint are only allowed to make 2 or 3 percent profit on maintenance but can make 10 percent or more on disaster recovery. So this is not Centerpoint’s fault, they are just following the playbook given to them by the state.
So just like the freeze blackout, investors are sitting back hoping for a real good disaster that will give them big profits.
Here is the link-
https://www.khou.com/article/news/investigations/centerpoint-bill-hurricane-beryl/285-9ae6118f-51f6-40b4-bd75-a9d8894cff11
I would also like to point out that any monetary judgement granted to the plaintiffs, the ratepayers, will have to be recouped by CenterPoint by charging us, the ratepayers, more money. So we won’t gain anything from these lawsuits, but we will lose the millions that will be paid to Buzbee, Fertitta, and the other lawyers. These guys are just using public outrage to soak us survivors for some more cash. Gov Abbott’s fake concern is a huge smokescreen too, it is his public utility policies that created the incentives for this disaster in the first place. There will be many more disasters to come, because large scale disasters are big business in Texas, and they create significant opportunities for wealth transfers from us peons to the ultra rich.
I see these lawsuits as attention grabs more than realistic attempts to right a wrong. Buzzbee is widely considered to be an attention whore who will take long shot cases for the coverage he’ll get and didn’t Fertitta just graduate law school? The governor and SCOTX have almost always bent over backwards to protect the utility, both recognizing the PUC has almost exclusive rights to regulate them as provided by the state legislature. The governor only made this storm an issue because of all the heat he was taking for enjoying his whirlwind tour of Asia and saw the potential to exploit the situation for political gain, just like he always does.
It’s not like this is the first time the utility has left many of us without power. That has been happening as far back as the state has had an electric grid. When Texas broke up Reliant for the deregulation scheme wasn’t it always understood that the idea was to make the sales portion of the company more competitive as that was where the profits came from, not the delivery system?
The PUC could require more be spent on infrastructure and they have, CenterPoint presumably complying with whatever mandates were made. At the end of the day there will never be enough incentive for the utility to spend as much as we want unless we’re going to pay for it dearly. Good luck proving any of the major decisions made by their executives were malicious or grossly negligent as long as they reasonably complied with PUC mandates. I don’t think J’s speculations of using disasters to profit can be proven short of an admission of guilt by the company and that’s not going to happen.
If we want a utility to do a better job, wouldn’t it make more sense to incentivize spending additional funds to strengthen the grid than to fix it after a disaster takes place? Clear cut the area surrounding the lines and other infrastructure to start. Then top tall trees close enough to hit the lines, burying cable where it makes sense, and figuring out a way to better notify us, even if it means using worst case scenario restoration estimates.
Jonathan- CenterPoint is guaranteed a higher profit margin for disaster recovery, more that the profit margin allowed for maintenance, and that is the heart of the problem. I am guessing that the reason for this policy is that the state wanted to incetivize faster recovery by allowing a higher profit margin for disaster work. If you read the story I linked, you will see that this policy has ultimately led to less maintenance and bigger disasters.
J, I read the article and it did not state a word about CenterPoint reducing spending on routine maintenance. The article mentioned capital investments receive a rate of return of 10%, nothing specific to disaster recovery other than making an apples to oranges comparison of $1 of routine maintenance compared to $100 of disaster recovery, with no specifics. I agree with your belief why the state would grant them more to speed up recovery but speeding it up returns them to making money from their primary service, delivery of power, too.
I agree the PUC should rethink the incentives and provide at least as much for routine maintenance as improvements, less for recovery or even making recovery revenue neutral or the lower rate of return, but the article did not specify what you’re claiming it did. It wasn’t that long ago when the company lost almost a billion dollars, either 2019 or 2020, also incurring a loss several years before that.
None of these suits are going anywhere. Centerpoint’s contract with its customers is governed by its PUC-approved tariff, which can be found here:
https://www.centerpointenergy.com/en-us/Documents/RatesandTariffs/HoustonElectric/CNP-Retail-Del-Tariff-Book-HOU.pdf
The applicable section is Section 5.2.1, LIABILITY BETWEEN COMPANY AND RETAIL CUSTOMERS:
Company will make reasonable provisions to supply steady and continuous Delivery Service, but does not guarantee the Delivery Service against fluctuations or interruptions. Company will not be liable for any damages, whether direct or consequential, including, without limitation, loss of profits, loss of revenue, or loss of production capacity, occasioned by fluctuations or interruptions unless it be shown that Company has not made reasonable provision to supply steady and continuous Delivery Service, consistent with the Retail Customer’s class of service, and in the event of a failure to make such reasonable provisions, whether as a result of negligence or otherwise, Company’s liability shall be limited to the cost of necessary repairs of physical damage proximately caused by the service failure to those electrical delivery facilities of Retail Customer which were then equipped with the protective safeguards recommended or required by the then current edition of the National Electrical Code.
In other words, the only liability Centerpoint has is to repair the customer’s electrical equipment if it was damaged by the service failure.