NEW YORK — A legal battle between a Chinese billionaire and a Texas power grid operator is spotlighting growing tension between U.S. federal and state restrictions on investment from China.
GH America Energy, a subsidiary of China’s Xinjiang Guanghui Industry Investment Group, in June sued Texas’ independent power operator and its directors for violating the U.S. Constitution’s supremacy clause, which establishes that federal laws take precedence over state ones. The Electric Reliability Council of Texas (ERCOT), which runs the state’s independent electric grid, had blocked the Chinese company’s wind farm project in 2022 using the Lone Star Infrastructure Protection Act, a state law that prohibits companies controlled by Chinese, North Korean, Iranian and Russian nationals from gaining access to the state’s critical infrastructure on security grounds.
