After a five-year legal battle and intense 3-week trial, Yetter Coleman won a $393 million judgment for its good client Energy Transfer in what may be the largest gas pricing dispute to emerge from Winter Storm Uri.
The case arose after CPS Energy, the city-owned utility serving San Antonio, purchased large volumes of natural gas from Energy Transfer and other suppliers during Winter Storm Uri in 2021 at storm-elevated market prices. After the storm, CPS refused to pay the agreed prices. It sued its gas suppliers in its hometown San Antonio state courts, with Energy Transfer as its largest supplier during the storm. With a team of respected law firms, CPS argued that the bills were “unconscionable” under Texas law and its gas suppliers had price gouged in a time of crisis. Energy Transfer brought counterclaims seeking payment for its unpaid invoices plus contract interest.
At trial, Yetter Coleman presented evidence that CPS failed to adequately prepare for that winter storm season and relied on risky natural gas buying strategies. When gas supplies ran short during the storm, Energy Transfer was prepared to prioritize CPS and other human-needs customers with substantial gas deliveries. The firm proved that CPS had ongoing plant failures in the storm that limited its ability to generate electricity, despite having enough gas to serve customers and even sell excess power into the state’s wholesale market. Finally, Yetter Coleman rebutted CPS’s litigation position that $38 per MMBtu was the “maximum legal price” for natural gas during the storm, far below the market prices reflected in the parties’ supply contracts.
The trial ended in an across-the-board win for our client. The court’s final judgment awards the full invoiced amounts to Energy Transfer, plus substantial interest and attorney fees.
The Energy Transfer team was led by its Assistant General Counsel Jessica Sykora. Yetter Coleman lawyers Bryce Callahan, Paul Yetter, Tyler Young, Mollie Bracewell, Alishan Alibhai, and Daisy R. Gray handled all pretrial and trial proceedings, including extensive discovery and motion practice before the MDL court and extensive trial court arguments, expert and fact witness examinations, and trial briefing. Co-counsel Emma Cano of Jefferson Cano LLP was a major contributor in the case.