A Texas district judge issued a final judgment on Thursday against CPS Energy, ordering the utility to pay nearly $400 million to midstream energy company Energy Transfer for natural gas it procured during Winter Storm Uri.

In March 2021, one month after Winter Storm Uri, CPS Energy sued two subsidiaries of Energy Transfer, accusing them of price gouging under the guise of the storm and exhibiting "predatory behavior."

"Texas law abhors attempts to profit from a disaster," CPS Energy argued in the lawsuit. "Defendants' price-gouging sales were illegal, violated Texas public policy, and were unconscionable. CPS Energy will pay the lawful amounts owed under its natural gas sales contracts, but it will not pay prices that reflect illegal and unconscionable gouging that violates Texas law and public policy."

According to Texas Public Radio, Judge Laura Salinas of the 166th District Court of Texas rejected that argument and ruled in favor of the defendants, Energy Transfer.

Salinas ordered CPS Energy, a publicly owned utility based in San Antonio, to pay Energy Transfer more than $263 million, plus costs, including $119 million in interest and $9.3 million in attorney fees.

According to Texas Public Radio, Salinas found in her written ruling that CPS Energy breached its contracts with Energy Transfer's subsidiaries, and that those contracts were not "unconscionable" as CPS Energy had claimed, and therefore must be enforced.

CPS Energy stated in its 2021 lawsuit that the natural gas it needed during Winter Storm Uri was "critical to meeting the basic human needs of residents and businesses, saving lives, and preventing significant property damage. Therefore, utility companies like CPS Energy had no choice but to continue to find and purchase natural gas at any price, no matter how high, and sellers chose to charge such prices in this distressed and chaotic market."

"As prices skyrocketed, CPS Energy faced a dilemma: pay exorbitant natural gas prices or deplete the natural gas supply needed to maintain critical infrastructure and provide essential human needs for natural gas customers," the utility said. "At the mercy of the defendants, and with no other options, CPS Energy purchased natural gas from the defendants at unconscionable prices and continued to do so during a statewide disaster."

Yetter Coleman, the law firm representing Energy Transfer in this litigation, said in a statement on Monday that the evidence it presented in court showed that CPS Energy "failed to adequately prepare for that winter storm season and relied on risky natural gas purchasing strategies... The firm proved that CPS experienced ongoing power plant failures during the storm, limiting its generation capacity, even though it had sufficient natural gas to serve its customers and even sold excess power to the state wholesale market."