Report says TXU manipulated Texas power market

[Dover]

March 12, 2007, 8:38PM
Report says TXU manipulated Texas power market


Associated Press

ARLINGTON — TXU Corp. manipulated the Texas electric market in 2005, costing consumers $70 million and giving the utility $20 million in extra profits, according to an outside expert whose report was released by state regulators today.

TXU, the largest power generator in Texas, sold power to the market at inflated prices and caused electricity prices to rise 15.5 percent during a four-month summer stretch, the market expert said.

"Since TXU, in fact, raised prices in the market and profited from its activities, the (monitor) concluded that TXU's behavior constitutes market power abuse," said staff of the state Public Utility Commission.

The PUC released the report by Potomac Economics Ltd., and the findings drew an immediate angry reaction from a key lawmaker who was already critical of TXU's rates.

"I am personally outraged that TXU would intentionally manipulate prices in the wholesale market to create higher profits," state Sen. Troy Fraser, R-Horseshoe Bay, said at a news conference in Austin. "Consumers of this state deserve to be treated fairly, and for a company that delivers an essential service to millions of Texans, this behavior is unacceptable."

The report could further complicate TXU's pending $32 billion sale to a group of private investors.

Fraser, chairman of the Senate Business and Commerce Committee, has introduced one bill that would effectively force TXU to sell generating plants, and another to let the PUC review the proposed sale of the utility. The latter measure was approved 9-0 by his committee.

A TXU spokeswoman said the Dallas-based company was "obviously disappointed" in the findings of the market monitor.

..snip..

"In this proposed buyout, nobody is looking out for the ratepayer, and I mean nobody," Barton said.



...cont'd

http://www.chron.com/disp/story.mpl/front/4623537.html

[depakid]

1. Color me surpirsed....

Color me even more surprised if anyone's held accountable for it. Enron did a similar thing to Oregon ratepayers and actually STOLE money from them, for taxes that they never paid.

Did the ratepayers get anything back? LOL.

[kestrel91316]

6. Enron and friends screwed CA, too. And that's what opened the door

for election of Ahnuld. :puke:

[Skink]

2. Rebate time.

interesting that for 500 square feet electricity goes from 50 to 150 every summer. Of course electricity has been deregulated in Texas since 2000. The NYT finally ran a front page, above the fold, story this year.

[shance]

3. That's not the only market they manipulated.

n/t

[Manifestor_of_Light]

4. they learned well from Enron

I read on this site, I believe, that TX has the highest utility rates in the nation.

I believe it. Our juice bills are horrible and we need our AC in the summer due to the insufferable humuggity.

[Skink]

5. You must live in Houston if you have Hummugity.

[babylonsister]

7. More rethug personal outrage; lots of that going around lately. nt

[Joanne98]

8. Look who bought out TXU!

TXU subsidiaries to issue $1.8B in notes
Dallas Business Journal - 11:06 AM CDT Tuesday, March 13, 2007
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TXU Corp. said Tuesday that its TXU Energy Co. and TXU Electric Delivery Co. subsidiaries plan to issue $1.8 billion in new debt to replace existing short-term debt.

Dallas-based TXU (NYSE: TXU) agreed last month to be bought by an equity group led by Fort Worth-based Texas Pacific Group and New York-based Kohlberg Kravis Roberts & Co. for $32 billion, plus the assumption of debt. The deal is worth about $45 billion.


The notes being offered are expected to include $1 billion of senior unsecured floating rate notes of TXU Energy, and $800 million of senior unsecured floating notes of TXU Electric.

TXU said proceeds from the offerings will not be used to fund the pending merger transaction.

The notes will be mandatorily redeemable when the deal closes.

Web site: www.txucorp.com



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[The Backlash Cometh]

9. Someday, even Texans will cry for nationalizing of our 'lectric co.