Report says TXU manipulated Texas power market

[Dover]

WHAT?!! An energy company from Texas committing fraud??!!! Swindling poor people? We can't let this ever happen aga.....oh wait.... :mad: This country just oozes corruption from sea to polluted sea.


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.

..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

[Rowdy Church]

1. Texas Deregulation A Failure

The deregulation of the Texas Electricity market has not served the citizens of the State of Texas.

Deregulation promised that competition would result in lower prices to the consumer. That has not been the case! If the goal of deregulation was to effectively drive the cost of electricity down -- then deregulation has failed miserably.

This market is rife with one scandal after another and the citizen consumers in this market continue to pay outrageous amounts for electricity. In many cases, consumers and businesses have been overcharged and mis-charged for power .. as a matter of policy by the Retail Electricity providers.

I hope TXU is held accountable!

[The Cleaner]

23. Deregulation only provides a temporary economic benefit.

I was in telecom a few centuries back (well maybe not THAT long ago), which was deregulated in 1996. What we saw is a temporary explosion of small telecom startups that gave the economy a huge shot in the arm. But what happened is that many of them (including the one I worked at) overextended themselves and ended up going belly up.

Who survived? The original Big Bells, who theoretically were supposed to have had their monopolies challenged by deregulated independent competition.

[Chimichurri]

29. Exactly right. I have friends in TX who cannot afford to heat their homes

or cool them in the summer but they STILL vote republican and believe in deregulating everything. Boggles the mind.

[aquart]

2. Well, at least they did it to their own.

Enron had to branch out and wreck California.

Think Texas voters are awake, yet?

[The Cleaner]

25. I fear Texas voters will NEVER wake up.

And that's precisely why corruption runs so damn high in this state. It seems, from my experience anyway in talking to people here, that as long as you don't raise their taxes, they don't really care how the hell their representative State government is run. And if a candidate promises to LOWER their taxes, they fall at his or her feet no matter how corrupt or nasty the candidate may be (with one stipulation, that the candidate is a Republican).

Seriously.

[Chimichurri]

30. It is so true.

[Trajan]

3. Laughs and laughs ....

The Texans are off the farm on this fraud and graft thing ....

EVERY thing about them is about stealing more and more, from war profiteers, to oil corporations, to utility manipulation .....

EVERYTHING is in place; a well oiled theft machine humming along nicely .... and now put into 4th gear before the race is over ...

Bastards ....

[Dover]

4. We jes call 'em "good ol' boyz". They seem to congregate in Houston

but they'll spit and chit anywhere and everywhere and then move to Dubai.

[The Cleaner]

19. Indeed...

:puke:

I recall in the movie "Nixon" they depicted these "good 'ol Texas oil boys" in one scene where they were trying to boss Nixon around or something. They really do think they rule the roost.

[salin]

5. When Congressman Joe "Westar" Barton goes public to complain

that 'noone is looking out for the rate payers' when screaming outrage at a power company, you know reality has taken a funny (and opportunistic) turn - this is the same guy with no regard for taxpayers who tried, with DeLay, to slip in a provision in the Energy Bill that would grant big bucks to KC based Westar, til it came to light and they (he and DeLay) pulled the provision out. Guess that if enough $$ is flowing his way he not only is blind and 'not looking out' for rate and tax payers... but if the story looks like it is going to blow big enough suddenly he becomes "outraged", goes public and tries to milk public support (ala 'what a man of the people, am I'). Right.

[The Cleaner]

15. Oh, the hypocrisy! Thanks for that reminder.

Do you have any links to this? I remember when it happened, but have forgotten the dirty details.

It's truly like the wild west out here in Texas. Anything goes I guess. It's like if a bank robber robs a bank with his buddy at his side. He makes his buddy do the dirty work, then when they get caught, the back robber turns to his buddy and says, "How could you do such a thing! I'm disgusted! I'm outraged!"

[Dover]

18. Maybe he's milking support for the original plan of 19 Coal Plants

and would prefer this latest buyout not go through?

[The Cleaner]

20. That was 11 coal plants...

and I wouldn't be surprised in the least given the corruption around here.

[Dover]

26. No......it was NINETEEN.

https://www.uspirg.org/news-releases/clean-air/clean-air2/alternatives-to-coal-plants-tops-environmentalists39-legislative-agenda

I've often wondered if that was a negotiating tactic. Propose 19 (even though you actually want fewer) and 'settle' for 10. Those who fought the 19 would consider it a 'win'.

[The Cleaner]

33. Actually it is 17 total coal plants proposed; TXU wanted to build 11 of them + PERRY'S CORRUPTION!!

Texas already has a sorry reputation for its dirty air. Houston vies with Los Angeles, trading back and forth the No. 1 spot on the list of cities most choked by smog. Now, Texas utility companies are proposing to build 17 new coal-burning power plants and one petroleum-coke power plant over the next four years. They have the support of the governor, but mayors in some of the state's largest cities are putting up a fight...

Its owner, utility TXU, plans to build 11 of the 18 proposed new plants...

AND ON RICK PERRY'S CORRUPTION:
"The relationship between the utility companies and Rick Perry has been a cozy one," says Craig McDonald, director of Texans for Public Justice, a political watchdog group which tracks Texas campaign contributions.

"Texas has a pay-to-play government. It's not pretty, but that's the way it works down here."

McDonald says Perry has received $148,000 alone from Earle Nye, retired chairman of TXU. "Nye gave the governor $2,000 on the day Perry signed the order to expedite TXU's coal-fired plants," McDonald says. "Last year, employed 52 paid lobbyists to the tune of $3 million."

http://www.npr.org/templates/story/story.php?storyId=6110191

[MilesColtrane]

6. $140 a month electric bills for a 300 sq/ft apartment last year?

Yeah, I'd say they were f&*$ing me.

[alarimer]

7. Mine was even higher last year

$180 for about 500 sq ft. We were sold a bill of goods on deregulations. "It will lower your bills". The bills are higher than they have ever been.

[Igel]

8. Where are you and what are you doing?

Houston, 1200 sq ft apt. and monthly bills of around $100 (high $128, low $87 ... depends on how much we run the air conditioning) in 2006. And that's with all incandescent lighting.

The bills averaged lower in 2004 and early 2005.

[alarimer]

22. Corpus so the a/c is on from mid-March until Nov.

I had bills that ranged from $120-$180 over six months. I was probably paying .16/kwh, unaware that there are cheaper contracts out there. I recently switched to a company and got a 1 year contract for somewhere around .12.KWH. So at least I am protected if prices rise this summer. So I expect to save 25% over last year. I know that the a/c unit has a leak because they have to replace coolant at least once a year and the unit itself is an old, less efficient model, but they won't replace unless it completely breaks down.

And I keep it quite warm- at least 75 degrees.

[The Cleaner]

27. That's funny -

A couple months ago I got a call from corrupt TXU asking me if I wanted to join a "program" to lower my rates. Recently they have come out with a variety of such programs, which they never really explain and which are very confusing. Anyway I found you have to sign a contract locking you into TXU for 2 years at a slightly discounted rate. So basically it's "we're gonna rip your ass off, then offer you a contract to 'lower' your already inflated electricity bills."

I never did receive that contract. Good thing - I'm now considering switching. (not to Reliant though, a few years ago I tried that and THEY ended up ripping me off too, charging me $230 one winter month for a 2-bed apt!!

[The Cleaner]

12. Yeah, exactly!

This winter we got about 3 bills for around $175 on average - and we keep our heat at 65 degrees! We're in a 1060 ft2 2-bed.

Go to www.apartmentratings.com and see what other people are saying - it's a great resource.

[The Cleaner]

9. I live in Dallas - and YES! EVERYONE has been complaining about the high rates.

I thought someday we might hear the whole thing was rigged, and that TXU was scamming the public. But then I thought, "Nah, that's just conspiracy theory thinking."

Well I guess sometimes conspiracies do actually happen.

This is simply amazing. But it's true - everyone in this state is complaining about high energy costs. I live in a 2-bed apartment with electric heat/AC. Built in 1996. In the winter we keep our heat at 65 degrees. Our average winter bill is $175/month. Luckily here in Texas the cold weather generally bounces back and forth, and only lasts 2-1/2 months or so before the 70 kick back in again in early March.

Anyway I frequent the apartment discussion board called www.apartmentratings.com often, and very often some Texan in an apartment will be complaining about the sky-high cost of heating and cooling their units. They've always chalked it up to poor insulation, which is a problem too - but perhaps the real problem all along is TXU scamming them!

And to think, corrupt Rick Perry, our Governor, signed an executive order to fast-track the building of 11 coal plants which would pollute! Wrap your mind around this a bit. Rick Perry and TXU formed a pact to continue RAPING THE TEXAS CITIZENRY, and rather than cleaning up the corruption in ripping people off, they simply opted to build new coal plants so that they can rape the public EVEN MORE.

Nah, this state isn't corrupt or anything
:sarcasm:

[w8liftinglady]

10. we live in an old house-so I expect higher rates,but C'MON

mine were outrageous.I hope they throw the book at these criminals...

[The Cleaner]

14. Yep. And I think it's part of the reason we're seeing more foreclosures here

in Texas - in Dallas anyway. I've heard horror stories of electric bills of $500, $600, and more per month in a house! Now combine that with one of the highest property taxes in the country, HOA fees if you live in a planned community, along with a high sales tax - no wonder there's an increase in foreclosures here. (this is not to mention the crashing of the "subprime bubble."

Granted actual housing prices are low comparatively, but when property taxes and everything is added up, it's more than it first appears. Roof upkeep, A/C repairs, and foundations shifting and cracking walls in the house is a problem also.

[alarimer]

24. Interesting resource

Next time I move (assuming I do) I will use it. I found my apartment complex listed and saw that it gets pretty good ratings. I concur with most of the assesments, especially with regards to maintenance and upkeep. The maintenance people are there very soon after you report a problem. If it is an emergency (I had a bathroom flooding problem) they come even at midnight.

[moc]

28. I also live in DFW. Last summer I had an electric bill that topped $500.

:wow:

We live in an older, 2800 sf rancher. I can't imagine what the bills have been for 4000sf McMansions. :wow:

It's insane.

[The Cleaner]

11. A factoid - and this is a bit confusing...

I looked into how TXU is able to raise rates. Apparently they can only go to the Texas Public Utilities Commission (PUC) twice per year to ask them for a rate increase. They can't just willy nilly raise rates. At the same time, the PUC apparently NEVER denies their request for a rate hike.

So I suppose we have to look to what happened in California a few years ago for clarity on how TXU was able to rig this thing. Enron is a good example of a company who did this, remember the stories of how snickering asshole Enron employees were laughing back and forth to each other while ripping off Grandmas :(

[Blackhatjack]

13. I am shocked... just shocked that this could happen in Texas, Bush's home state...

Just goes to show you that any vulnerability in the system is free to be exploited if there is no government oversight or regulation.

How do you like the 'voluntary' regulation that power companies have been using since Bush took office?

[The Cleaner]

16. If we can't trust Rick Perry on this - how can we trust him on the Gardasil issue?

Just a thought...not trying to divert the conversation, just offering an opinion. Point is, Rick Perry has done some dirty dealings, scams, and scheming - fast-tracking and making executive orders in both cases (mandating Gardasil and allowing TXU to build 11 new coal plants in Texas even though TXU was already knowingly ripping off the public).

[Dover]

17. I guess you missed this story about Good Hair's 'authority'

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=2765250&mesg_id=2765250

[The Cleaner]

21. Thanks!

maybe I'll pop on over to LBN and join the fun. So rarely do I go to LBN...:P

[dkofos]

31. Remember the good old days, before deregulation, when we paid

HALF AS MUCH AS WE DO NOW.

Those were the days.

[BluePatriot]

32. Duh?

Had costs go from .12 a kWh to .16 a kWh in one year here. Deregulation sucks.

[Horse with no Name]

34. Thank you Bush and his croneys for allowing this to happen

And to think some actually believed that a free market would create competition.
The only competition it created was a race to the bank for the electric providers.
In the meantime, I personally suffered through $600 and $700 a month electric bills every month.
Fuck those fuckers. Everyone knew what was going on and did nothing.:mad:

[The Cleaner]

36. In THEORY, deregulation is supposed to lower prices and increase competition.

And it makes sense - the more competition out there, the lower prices will become as companies compete for your business.

But in REALITY, it rarely works. Either the new entrants go bankrupt, or the big monopolies buy them out. The big guys know exactly how to wipe out their competition, and they do it with precision.

Deregulation only provides a temporary economic benefit.

[Rowdy Church]

37. Nailed it

You hit the nail on the head there Cleaner!

I used to work for one of the Retail Electricity Providers in Texas --

If you only knew.

Its been nothing but a shell game from the git-go.

Many customer's have been overcharged and I know first hand of instances where customers were over billed as a matter of *policy* ... as a way to ensure that the bottom line was always showing growth and profit -- so that the company would be attractive and hence bought out.

I used to be a proponent of deregulation; but every market that has deregulated energy - whether it be gas or electricity, the consumer always gets screwed.

[The Cleaner]

41. Wow...

yikes! Not surprising, but still.

[Czolgosz]

35. Speaking of the abysmal failure of the Texas deregulation misadventure, does anyone have any info

on the consumer advocates' challenge of the Ignite/Stream Energy customer recruitment plan as an illegal pyramid scheme?

[Rowdy Church]

38. If You Live in Texas

If you Live in Texas -- be sure and check out

http://www.powertochoose.org

Unless you *lock* into a long-term rate (Contract) there is no rule that says you cannot change providers every month to continue to shop for the lowest rate advertised by a Retail Electricity Provider (REP).

Locking in means you give up the ability to switch randomly and freely without being charged a penalty.

I'm a proponent of Green Energy and believe we need to invest in it (nationally) -- but in the ERCOT Texas market beware of signing up for so-called *Pollution Free* or *Green* Energy ... the REPs cannot guarantee that the electricity being provided to a home is 100% generated by a green source, ie ... Wind, Solar or other environmental friendly source.

Look it up - the REPs have to purchase credits for Green Energy -- but the reality on the ground -- its just a marketing ploy and the REPs end up charging premium prices per KW for so-called Green or Pollution Free energy and the only ones winning in this game is the REPs - because the more *green* packages they sell the more they can charge the more they make !

I sat through more than one meeting where the executives got a chuckle out of their Green marketing strategy -- because it just ends up lining their pockets and effectively does little to nothing to aid truly *Green* programs.

[Dover]

39. You ought to repeat that story to a green advocacy group or a local paper

"Insider" insight is always helpful.

[The Cleaner]

42. THANK YOU THANK YOU - I Switched from TXU!!

I've always meant to check out power to choose - and it was so easy! I actually SWITCHED my provider from hideous TXU to "Amigo Energy." They were only charging 10.8 cents per kilowatt hour! And i'ts a month to month contract deal!

I'm happy now, thanks so much! :):):):):):):)

Maybe I'll post this in the Texas forum.

[Rowdy Church]

43. Not To Rain on Your Parade

Cleaner et al:

Another trick o' the trade for REPs .... beware of their posted per Kw Rate!

Because the rules for advertising Rates and *What's included* and *whats not included* in the advertised per KW rate can be misleading and is not standardized by the PUC ... and some of the smaller REPs have been known to post a rate that does not include some of the ERCOT approved charges that get bundled ie ... Fuel Charge, etc... This gives the REP the ability to post a misleading low per KW rate when in fact once your bill is calculated you will be paying more than the advertised rate.

IF you live in TX you should review your bill because in most cases the *TRUE* per KW Rate will be exposed on your bill -- but its tricky and may even be obscured in the fine print whereas your *advertised* rate is highlighted -- you may believe that you are paying 10.8 cents per KW ... when in fact with all *other bundled charges* added plus the mandated *Poles and Wires* charge by the middle man (the actual company that retained ownership of the power distribution system - and meter reading apparatus) you are probably paying more than your advertised per Kw Rate

This is what I meant in my original post by its a *shell game*.

[SoCalDem]

40. When the foxes run the chicken coop, all you end up with is feathers.

Communities used to OWN and RUN their own utilities companies. They were efficient, well-run and benefitted the communities. But of course, eventually the the people were snake-oiled into believing that privatization would save them money.

Of course now most communties are buckling under crushing debt and cannot afford to buy them back or build new ones , so they are stuck.

It's what always happens with consolidation & deregulation..