Oklahoma City-based Chaparral Energy finds itself in a Texas State Supreme court battle with Oncor Electric Delivery Company as the two sight over a breach of contract claim.
The Texas Supreme Court on Friday agreed to hear oral arguments as Oncor Electric challenged a trial court judgment that sided with Chaparral Energy LLC. The suit stemmed from a contract dispute over electric service to oil wells. Oncor contends the lower court ruling should be disregarded because the Public Utility Commission of Texas was the only entity allowed to hear the dispute that goes back to 2007.
Chaparral asked Oncor to supply electricity to two wells in Texas and hired a third party to construct electrical facilities from the wells to a tie-in-pint. Oncor was responsible for extending its own electrical infrastructure to that point.
What led to the lawsuit were delays in obtaining two easements from parties who owned the land. It was not until January 2009 when the easements were obtained and in the meantime, Chaparral had used generators to power its wells. Once the project was completed, Chaparral sued Oncor for breach of contract and wanted to recover additional costs of relaying on the generators. A jury found that Oncor failed to timely comply with its agreement to provide electricity to the oil wells.