Texas Judge Orders CPS Energy to Pay $392 Million to Energy Transfer for Winter Storm Uri Gas

The Judgment

Judge Laura Salinas of the Texas 166th District Court rendered final judgment against CPS Energy, ordering the public utility to pay Energy Transfer more than $263 million in principal, $119 million in interest, and $9.3 million in attorney's fees — roughly $392 million combined.

In her written findings, Salinas ruled that CPS Energy had breached its contracts with Energy Transfer's subsidiaries, that the contracts were "not unconscionable" as the utility had alleged, and that they must be enforced. Texas Public Radio reported the ruling.

How We Got Here

Winter Storm Uri hit Texas in February 2021 and knocked out power for millions of residents. Natural gas prices spiked dramatically as demand overwhelmed supply during the freeze.

CPS Energy, which serves San Antonio, sued two Energy Transfer subsidiaries in March 2021, one month after the storm. The utility alleged the companies had exploited the disaster to charge predatory prices and engaged in "unlawful and unconscionable price gouging."

"Texas law abhors attempts to leverage a disaster for profit," CPS Energy said in its 2021 complaint. The utility argued it had no real choice during the storm: pay whatever sellers were charging or run out of gas and lose the ability to serve customers in a life-threatening freeze.

That argument describes a genuine bind. When you're a public utility responsible for heat and power during a deadly winter storm, walking away from a contract isn't really an option.

What Energy Transfer's Side Showed

Yetter Coleman, the law firm that represented Energy Transfer, said in a Monday release that its case demonstrated CPS Energy "failed to adequately prepare for that winter storm season and relied on risky natural gas buying strategies." The firm also argued it proved that CPS Energy had ongoing power plant failures during the storm that limited its ability to generate electricity. The utility actually had enough gas to serve customers and was even selling excess power into the state's wholesale market at points during the crisis.

If accurate, this shifts the story from "predatory seller exploits trapped buyer" to "poorly prepared buyer agreed to contracts it now wants to escape." Judge Salinas found the latter more persuasive.

The Price Gouging Argument, Taken Seriously

CPS Energy's position is not frivolous, and a reasonable person can find it compelling. The utility described a market where sellers could charge virtually any price because buyers — responsible for keeping people alive — had no leverage to refuse. Prices that would be unenforceable in ordinary commerce, the argument goes, shouldn't become binding simply because a disaster created a captive buyer.

Several Texas legislators made similar arguments after Uri, and the state did pass some reforms to grid winterization requirements. The legal question of whether extreme crisis pricing constitutes unconscionability under Texas contract law is a live one. Judge Salinas answered it against CPS Energy, but the utility may appeal.

CPS Energy has NOT announced a final decision on whether it will appeal as of July 7, 2026.

Who Pays

CPS Energy is a municipal utility. It is NOT a private company absorbing this loss through reduced shareholder returns. Its customers — San Antonio residents and businesses — fund its operations. A $392 million judgment will ultimately work its way into rates or reserves that ratepayers support.

The utility had already faced significant criticism after Uri for how it managed its exposure during the storm. This ruling adds a nine-figure legal bill on top of that history.

The Unresolved Question

The core tension from Winter Storm Uri has never been fully resolved by either the courts or the Texas Legislature: when a regulated energy market fails catastrophically during a disaster, who bears the loss — the customers who needed power, the utilities that bought gas at extreme prices, or the sellers who charged those prices? Judge Salinas put the answer squarely on CPS Energy in this case. Whether the Texas appeals courts agree is the open question that now determines whether $392 million stays on San Antonio's tab.