Recent Development In Retail Power And Contracting With Texas Governmental Entities

A Texas Court of Appeals recently rejected a retail electric provider's attempt to sue a Texas public school district for breach of contract—holding that the then-effective supply contract at issue was void and that the school district was therefore immune from suit under state sovereign immunity grounds after finding that the contract's purported extension violated Texas statutory competitive bidding requirements.

On October 31, 2016, the Texas 12th Court of Appeals upheld a trial court order dismissing TXU Energy Retail Company, LLC's ("TXU") breach of contract suit against the Fort Bend Independent School District (the "District").¹ The underlying suit stemmed from a retail electric supply arrangement between TXU and the District that was competitively bid in 2010. The 2010 bid process involved bids for one- and two-year supply contracts covering the period from June 2011 through May 2013. TXU won the bid, and the parties entered into a one-year contract that