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Texas Injection Molder Files Class Action Lawsuit Against Electricity Supplier

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J&M Plastics faces off against MidAmerican Energy Services, challenging fees charged to fixed-rate customers for service during record-breaking winter storm.

J&M Plastics, based northeast of Dallas in Royse City, TX, has filed a proposed class action lawsuit against Des Moines–based electricity supplier MidAmerican Energy Services. J&M Plastics alleges the supplier improperly charged commercial, fixed-rate plan customers line-item fees for service provided during the winter storm that slammed Texas in February 2021.

J&M Plastics is an injection molder that manufactures flower pots, coat hangers, dog bowls, and other products using recycled plastics. MidAmerican is a Berkshire Hathaway Energy company serving a total of 60,000 customers, including about 15,000 in Texas.

Filed in the US District Court for the Eastern District of Texas, J&M Plastics, Inc. v. MidAmerican Energy Services (Case No.2:21-cv-00206) states that J&M — a fixed-rate customer — received a statement from MidAmerican in April 2021 that included eight unauthorized line-item charges. These charges, for Supplemental Ancillary Services, were assessed during the week of the brutal Texas storm and came to nearly $54,000 — more than three times the company’s typical monthly bill. J&M heated its 55,000-square-foot facility during the storm to prevent frozen pipes, but the plant was not operating.

According to MidAmerican’s service agreement, its fixed-price plan includes “costs associated with line loss … all charges assessed by ERCOT … and other costs required to facilitate delivery of electricity to Customer’s Delivery Points.” ERCOT is the Electric Reliability Council of Texas.

The lawsuit alleges that MidAmerican ignored those terms and informed customers that “MidAmerican Energy Services will not increase the energy component of your bill; however, non-energy costs, such as ancillary charges billed by ERCOT and your local utility, are not fixed and are passed through on your bill.”

J&M, the lead plaintiff, expects other affected companies to join the class action lawsuit. “We are standing up for all businesses that are being taken advantage of by MidAmerican. Many of these companies and employees are struggling to recover from the pandemic, and these kinds of charges only make that recovery more difficult. We plan on others joining in this fight and getting these fees removed,” Shayna Levine, President of J&M Plastics, told PlasticsToday.

“MidAmerican has already acknowledged that it can’t pass through these same costs to their residential and small business customers, because of the Public Utility Commission’s consumer protection regulations. But the company’s still trying to unlawfully use a statewide disaster to take advantage of and price-gouge thousands of larger commercial customers,” said Derek Potts, attorney and founding Partner of the Houston-based Potts Law Firm, in a prepared statement.

“They can’t justify passing through these costs when J&M and other customers agreed to a fixed-price electricity plan, which specifically includes any ancillary and ERCOT-assessed charges,” Potts added.

The lawsuit’s allegations include violation of the Texas Deceptive Trade Practices Act and claims for breach of contract, negligence, and misrepresentation.

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