CITY OF BRENHAM GAS PROVIDER CLAIMS CITY BREACHED CONTRACT DURING WINTER STORM URI
The City of Brenham’s gas provider alleges the city breached its contract during Winter Storm Uri in February, and is seeking over $1 million in damages.
Amidst an ongoing legal battle between the city and WTG Gas Marketing in 335th District Court, the gas company claims that the city violated an emergency order issued by the Railroad Commission of Texas (RRC) on February 12th by delivering “excessive amounts of gas to its industrial customers, at WTG’s expense.”
The order, which remained in effect until February 23rd, specified that the transportation, delivery or sale of natural gas should be reduced unless serving human needs customers. WTG alleges that Brenham’s action was “a violation of the emergency order to the extent that industrial users were served before all human needs customers,” and as a result was a breach of the gas sales contract between the two entities.
WTG claims that it arranged for Brenham to receive the gas it needed to satisfy human needs, through WTG’s gas delivery agreement with Oasis Pipeline. However, the company says it was “forced to purchase, ship and supply the industrial volumes of unusually expensive gas that Brenham was illegally causing to be distributed, delivered and/or sold for industrial end-use.”
The company is seeking monetary relief in excess of $1 million, along with recovery of attorneys fees and expenses incurred as a result of Brenham’s “misconduct.”
WTG’s counterclaim does not specify how much gas was delivered to industrial users or to human needs customers during the period of the emergency order.
In a response to the counterclaim, the city says WTG’s assertions are devoid of any fair description of alleged damages, instead providing “a smattering of obscure and general statements.” The city states it is left to speculate what the nature is of the damages WTG alleges and seeks.
The city and WTG remain embroiled in a lawsuit after the city claims the company did not honor its existing gas sales contract, which has been in place since 2016 and sets a price at the first of each month. According to a motion for partial summary judgment filed by the city in August, the city claims WTG ignored the first-of-the-month pricing provision from February 12-23, substituting for daily rates that the contract did not allow. The city says WTG is attempting to charge the city $8.07 million for gas delivered during the month of February, and claims that the total bill should have instead been $271,502.
In the city’s motion, it disputes WTG’s claims that its pricing was justified based on the contract’s force majeure provision, which says the seller shall not be liable to the buyer for its failure to deliver gas, as the city claims the provision only applies when gas is not delivered. It also says WTG asserted it could charge daily rates because of penalties charged against WTG by Oasis Pipeline; the city states WTG cannot charge Brenham for any alleged penalties incurred in a separate contract.