Jun 5, 2007 1:20 pm US/Central
TXU Reaches $5 Million Settlement With Regulators
DALLAS (AP) ―
The electric retail business of TXU Corp. has tentatively agreed to pay state regulators a $5 million fine to resolve allegations it broke the law by signing up several thousand business customers to one-year contracts without their consent.
The settlement, in which TXU does not admit any wrongdoing, is pending approval by the Public Utility Commission, agency spokesman Terry Hadley said Tuesday.
State regulators claimed unit TXU Energy broke the law when it renewed contracts of about 4,000 small commercial customers for one year without their explicit consent.
Beginning in 2005, regulators said TXU sent notices to the customers saying their service would be renewed for 12 months unless they contacted TXU or changed plans to move to another provider.
The filing said that under state law, any service renewed through an automatic renewal clause can last no longer than 31 days.
"We entered into the settlement to demonstrate our willingness to cooperate with the PUC and its staff," TXU spokeswoman Lisa Singleton said. "We wanted to stay focused on customer service, and it's hard to focus on customers when you're involved in costly litigation."
Dallas-based TXU stopped doing the renewals once the PUC informed the company it was investigating the practice in October 2006, Singleton added.
The PUC already has proposed a different $210 million penalty against TXU over charges it jacked up electric prices in the summer of 2005 by selling power at inflated prices. TXU has contested the charges.
The latest fine comes amid the proposed $32 billion sale of TXU to private equity companies Kohlberg, Kravis Roberts & Co. and Texas Pacific Group in the largest private buyout ever.
The sale still needs approval from federal regulators and TXU shareholders.
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