FARMERS ELECTRIC COOPERATIVE INC v. BALENTINE (2025)

OPINION

In this interlocutory appeal, Farmers Electric Cooperative, Inc. challenges the trial court's order denying its plea to the jurisdiction. Because we conclude Farmers Electric is not a governmental unit entitled to bring an interlocutory appeal, we dismiss this appeal for want of jurisdiction.

Farmers Electric is a privately owned, nonprofit electric cooperative corporation formed by its members pursuant to the Electric Cooperative Corporation Act (ECCA). See Tex. Util. Code Ann. § 161.001–.254. According to the petition filed by Hali Balentine, individually and as next friend of A.B., a minor, Farmers Electric directed three of its employees, including Balentine's husband, to repair a storm-damaged section of power lines. While performing the work, Balentine's husband was fatally electrocuted. Balentine alleges Farmers Electric was aware that, in some cases, the use of emergency generators by its customers during a power outage could result in energizing power lines that appeared to be de-energized. Balentine asserts Farmers Electric was grossly negligent in failing to provide its linemen with adequate training, safety equipment, or warnings about this risk.

In response to the suit, Farmers Electric filed a plea to the jurisdiction claiming it is entitled to governmental immunity. Balentine responded that Farmers Electric is not an entity to which sovereign or governmental immunity applies. The trial court denied Farmers Electric's plea, and this interlocutory appeal followed.

As an initial matter, we must determine this Court's jurisdiction over Farmers Electric's appeal. Section 51.014 of the Texas Civil Practice and Remedies Code states that an interlocutory appeal may be taken from an order that “grants or denies a plea to the jurisdiction by a governmental unit as that term is defined in Section 101.001.” Tex. Civ. Prac. & Rem. Code Ann. § 51.014. Section 101.001 defines a “governmental unit” to include an “institution, agency, or organ of government the status and authority of which are derived from the Constitution of Texas or from laws passed by the legislature under the constitution.” Id. § 101.001(3)(D). It is undisputed that Farmers Electric derives its status and authority from the ECCA. Accordingly, we must determine whether Farmers Electric is an “institution, agency, or organ of government.” See CPS Energy v. Elec. Reliability Council of Tex., 671 S.W.3d 605, 614 (Tex. 2023).

A private, non-governmental entity may qualify as an organ of the government if it performs a “uniquely governmental function” and “operates as part of a larger governmental system.” Univ. of the Incarnate Word v. Redus, 518 S.W.3d 905, 910–11 (Tex. 2017) (Redus I). To date, the Texas Supreme Court has found only three private entities qualified. In LTTS Charter School, Inc. v. C2 Construction, Inc., 342 S.W.3d 73 (Tex. 2011), the court held that open-enrollment charter schools, created in accordance with the laws of this state, are governmental units because they operate as part of the Texas public-school system and, together with traditional public schools, have primary responsibility for the uniquely governmental function of implementing the state's system of public education. Id. at 82.

In Redus I, the supreme court addressed whether a private university's police department was an organ of the government. See Redus I, 518 S.W.3d at 909. The court concluded the department qualified because law enforcement is a uniquely governmental function and the school's police officers were authorized by the legislature to enforce the law using the same resources as state and local police. Id. at 911. In addition, the court noted the university's police were granted the same powers, privileges, and immunities as other peace officers. Id.

Finally, in CPS Energy, the supreme court concluded the Electric Reliability Council of Texas (ERCOT) qualified as a governmental unit. CPS Energy, 671 S.W.3d at 617. ERCOT is an independent system operator (ISO) established under the Public Utility Regulatory Act by the Public Utility Commission (PUC), a governmental entity. Id. at 616; Tex. Util. Code Ann. § 39.151. As an ISO, ERCOT exercises the authority delegated to it by the PUC and operates as part of the state's system for electricity regulation under the PUC's direct oversight. CPS Energy, 671 S.W.3d at 616–17. ERCOT is charged with the uniquely governmental task of regulating electric-utility market participants by, among other things, adopting and enforcing rules related to the reliability of the regional electrical network and enforcing operating standards. Id. at 616.

Recently, the Tyler Court of Appeals addressed the identical issue presented here and concluded an electric cooperative is not a governmental unit entitled to bring an interlocutory appeal. See Cherokee Cnty. Elec. Coop. Ass'n v. Gaitan, No. 12-25-00060-CV, 2025 WL 2902076 at *4 (Tex. App.—Tyler Sept. 24, 2025, no pet. h.). Like the electric cooperative in Gaitan, Farmers Electric characterizes itself as similar to ERCOT, arguing it is part of the larger governmental system of utility regulation because it establishes and regulates electric-utility rates. But Farmers Electric is merely a member of the marketplace of electric service providers along with municipal utilities and other private entities. See id. at *3. To the extent it “regulates” electricity rates, it does so only for its own members, not the public at large. In contrast, ERCOT is the sole system operator for the Texas power region and is statutorily required to be independent of the marketplace to prevent being influenced by it. See Tex. Util. Code Ann. § 39.151(b).

That electric cooperatives are outside the larger governmental system and have the same status and liabilities as other electric service providers, including private, for-profit entities, is demonstrated by the legislature's recent enactment of section 38.081 of the utility code. Under section 38.081,

[a]n electric utility, municipally owned utility, or electric cooperative that submits and obtains commission approval for a wildfire mitigation plan under Section 38.080 may use the plan as evidence in an action brought against the utility or cooperative for damages resulting from a wildfire ignited or propagated by the utility's or cooperative's facility.

Tex. Util. Code Ann. § 38.081(a). The section limits the liability of a utility or cooperative only if it is in compliance with a mitigation plan approved by the PUC. Id. § 38.081(b).¹

We recognize that electric cooperatives, unlike other private electricity providers, are subject to the statutory constraints of the ECCA. See Hilco Elec. Coop., Inc. v. Midlothian Butane Gas Co., 111 S.W.3d 75, 78–79 (Tex. 2003) (powers of electric cooperatives are derived solely from and measured by ECCA). But heavy regulation, by itself, does not make an entity an organ of the government. See Rosenberg Dev. Corp. v. Imperial Performing Arts, Inc., 571 S.W.3d 738, 750 (Tex. 2019). Unlike ERCOT, Farmers Electric is not directly accountable to a state agency and no state agency has complete authority over Farmers Electric's finances, budget, and operations. See CPS Energy, 671 S.W.3d at 616. Instead, Farmers Electric's business and affairs are managed by its private board of directors. See Tex. Util. Code Ann. § 161.071.

Farmers Electric contends that “delivery of electricity is an important governmental function.” But when defining the governmental functions of municipalities, the legislature specifically exempted the operation and maintenance of a public utility, stating it was a proprietary function. See Tex. Civ. Prac. & Rem. Code Ann. § 101.0215(b)(1). Citing this Court's opinion in City of Greenville v. Branch, 152 S.W. 478 (Tex. App.—Dallas 1912, writ ref'd), Farmers Electric suggests the legislature classified utility operations as proprietary because historically cities operated utilities at a profit. Id. at 486. Although we noted the for-profit status of the municipal utility in Branch, we concluded the city's operation of an electric utility was proprietary based on the now-codified general rule that a city is “not liable for torts committed by its officers in the discharge of its duties in the interest of the public at large, but is liable for their unlawful acts in discharging functions conferred for the peculiar advantage of its own inhabitants.” Id.; see also Tex. Civ. Prac. & Rem. Code Ann. § 101.0215(a)–(b) (generally defining governmental functions as “those functions that are enjoined on a municipality by law and are given it by the state as part of the state's sovereignty, to be exercised by the municipality in the interest of the general public” and proprietary functions as “those functions that a municipality may, in its discretion, perform in the interest of the inhabitants of the municipality”). Because the City of Greenville was “operating its plant for the purpose of furnishing private lights to its citizens,” we concluded the city was not engaging in a governmental function. Branch, 152 S.W. at 486.

As with the City of Greenville's electric utility, Farmers Electric operates its cooperative solely for the purpose of providing electricity to its own members, not the public at large. We see no reason why, therefore, the characterization of operating a utility as proprietary should be different for an electric cooperative than for a municipality. See Gaitan, 2025 WL 2902076 at *3. It follows that, if the operation and maintenance of an electric utility is a proprietary function rather than governmental, Farmers Electric is not performing a “uniquely governmental function.”

Farmers Electric leans heavily on the laudable purpose of electric cooperatives, which is to bring electrification to rural areas. See Hilco, 111 S.W.3d at 77. Serving a public purpose “says nothing about the nature of the entity itself,” however, and “does not ipso facto equate to status as a governmental entity.” Rosenberg, 571 S.W.3d at 750. Though important, the provision of electricity is not a uniquely governmental function, and Farmers Electric does not operate as part of the larger state system of electricity regulation like ERCOT. Therefore, it does not qualify as a governmental unit entitled to bring an interlocutory appeal under section 51.014 of the civil practice and remedies code. See Redus I, 518 S.W.3d at 910–11.

We dismiss this appeal for want of jurisdiction.

FOOTNOTES

1.   Farmers Electric attempts to differentiate itself from other private entites by pointing to the fact that the legislature granted electric cooperatives the power of eminent domain. See Tex. Util. Code Ann. § 161.125. The power of eminent domain is not uniquely governmental and has been granted to a wide range of private entities. Gaitan, 2025 WL 2902076, at *3.

Opinion by Justice Jackson