TXU abused power market, report says

AUSTIN, TEXAS - Utility TXU Corp., facing scrutiny in its planned $32 billion private-equity buyout, abused Texas's deregulated power market, an independent report says.

The Dallas company manipulated the state's wholesale power market, causing at least $70 million in higher electricity prices in the summer of 2005, the report commissioned by the state Public Utility Commission said.

TXU's wholesale arm made a profit of about $19.6 million through its anti-competitive behavior, the report said.

Overall, the investigation said TXU's actions caused wholesale prices statewide to rise an average of 15.5 percent that summer, The Austin (Texas) American-Statesman reported.

"TXU's behavior constitutes market power abuse," special projects Manager Brian Lloyd wrote in a memo about the 37-page report.

The report could lead to fines of up to $25,000 per day per violation.

TXU rejected the report's allegations, saying it "thoroughly reviewed" its conduct and believed it was "consistent with the commission's rules and policies."