TXU made about $20 million in profit by manipulating wholesale power prices in the Texas electric market, according to a report released by the Public Utility Commission of Texas. The report said that TXU cost consumers $70 million in 2005.
The Public Utility Commission hired a firm to investigate TXU’s pricing activities after a state of the market report released by Potomac Economics that showed TXU had a larger share of unused economic capacity than other suppliers.
According to bizjournals.com, TXU spokeswoman Kim Morgan said the utility company received a copy of the IMM report Monday and was reviewing it. "We are obviously disappointed in the findings ... We have thoroughly reviewed our conduct during the referenced time period, and believe it is consistent with the Commission's rule and policies," Morgan.
The IMM investigation found that TXU's bidding behavior during the peak usage hours in the summer of 2005 inflated energy prices by 15.5 percent on average, increasing costs to customers by about $70 million more, said the bizjournals.com story.
The power company made $19.6 million more in profit during the study period than it would have made had it bid in a competitive manner.
The state of the market report said TXU's actions caused wholesale power prices to spike 657 times. According to an Associated Press story, most of those times TXU was in prime position to benefit from the higher prices because strong demand for electricity couldn't be met without TXU's supply, the consultant said.