Just Energy Group Seeks to Recover $274M From Electric Reliability Council of Texas Under Sections 542 & 549
November 12, 2021, Southern District of Texas – Plaintiffs Just Energy Texas LP, Fulcrum Retail Energy, LLC, Hudson Energy Services LLC, and their foreign representative, Just Energy Group, Inc., bring an action against Defendants Electric Reliability Council of Texas, Inc. (“ERCOT”) and the Public Utility Commission of Texas (“PUCT”) under sections 502(b), 502(d), 542(a), 549, 553 and 558 of the Bankruptcy Code as well as claims for avoidance under Canadian and other applicable laws in the bankruptcy case of Just Energy Group et al (“Debtors”).
Specifically, the Plaintiffs challenge transfers worth $274 million out of the $335 million that ERCOT allegedly invoiced. The complaint alleges that transfers should be recovered and distributed to Just Energy’s creditors because the Court did not approve the post-petition transfers, and they are subject to avoidance on that basis alone. The complaint further argues that the Court could never have approved the alleged transfers as the invoices are based on the PUCT Orders, which themselves are allegedly unlawful under the Texas Administrative Procedure Act and the Public Utility Regulatory Act and inconsistent with the ERCOT Protocols and standard form market participant agreement.