On March 10, 2008, a preliminary settlement agreement was reached in a class action lawsuit filed against PEC in July of 2007. Travis County District Court Judge John Dietz read the following terms of the preliminary settlement agreement into the court record:

• Beginning in 2008, PEC will retire $23 million in patronage capital over a five-year period, or as soon thereafter as feasible. The retirement will be in the form of bill credits to then-current PEC members and will be subject to the restrictions imposed upon PEC by its lending institutions and the maintenance of PEC's financial integrity.
• Navigant Consulting, Inc., will conduct an independent internal investigation of the financial and management operations of PEC. The review will cover 10 years, with an emphasis on the last five years, and its report will be made publicly available.
• PEC and its insurer will pay the plaintiffs' costs, including but not limited to attorneys' fees, out-of-pocket expenses, court costs, and other nontaxable costs. This amount will not exceed $4 million.

On April 3, 2008, the parties formalized this agreement in a written Settlement Agreement. Also on April 3, Judge Dietz approved the official notice form that was sent to all members of the settlement class. The plaintiffs' current petition is also available for review.

On May 5, 2008, one member of the class action lawsuit filed an appeal with the Third Court of Appeals in Austin. This appeal challenged the order for final approval of the settlement agreement.

On March 5, 2009, the Third Court of Appeals issued a ruling unanimously affirming the trial court's judgment in its entirety. This decision upholds the original settlement agreement.