TXU Corp. announced another step to support relief efforts for Hurricane Katrina victims by delaying consideration of a price to beat (PTB) change until October and voluntarily proposing a potential discount when any such change is approved to moderate electricity prices through the end of 2005 for its North Texas customers. TXU's other efforts include assisting with electric service restoration in Florida and Louisiana, assisting victims of the hurricane who have relocated to Texas, contributing and matching certain contributions to the Power of Hope Fund, and working with governmental and social service agencies in Texas to identify best methods of assistance.
To address concerns regarding potential increases in retail electricity prices at the same time customers are also dealing with the effects of Hurricane Katrina, TXU Energy, a subsidiary of TXU, announced an agreement with the Public Utility Commission of Texas (PUC) Staff and the consumer advocate Office of Public Utility Counsel (OPUC) that in spite of substantial increases in natural gas and wholesale power prices, TXU Energy will not consider filing for a change in its PTB prices until Oct. 3 or 4. While the company had offered to moderate prices by waiting until at least Oct. 11 to request a PTB change, the PUC Staff and OPUC prefer this agreement, which provides for an earlier filing and approval, combined with a discount through the end of the year.
The agreement provides that for such a PTB filing by TXU Energy on Oct. 3 or 4, the PUC will act by its open meeting on October 28. In addition, upon PUC approval of the adjustment and implementation of the new PTB, TXU Energy will voluntarily implement an across-the-board discount for all PTB customers, if the approved PTB is above the discount level. This discount will result in a price equivalent to a PTB based on natural gas prices in the week prior to Hurricane Katrina making landfall in New Orleans, or $9.743 per million British thermal units (MMBtu). This plan, endorsed by the PUC Staff and OPUC, provides customers with further price certainty and savings of $40 million to $50 million relative to the even higher commodity price levels that are currently forecasted. The discount will expire on Dec. 31, and the rate at that time will reflect commodity price levels as of the October filing date. TXU Energy's PTB is expected to remain one of the lowest in the state after these actions.
"This is a time for everyone to pull together, and we understand the difficult circumstances created by Hurricane Katrina on our customers. This plan will enable the company to offset the significant increase in wholesale power prices while simultaneously moderating the impact on our customers," said Jim Burke, chairman and CEO of TXU Energy. "This is another step TXU Energy is taking, in addition to those by employees of the entire TXU system of companies, to assist the relief efforts, the needs of our local communities and our customers."
Other actions the company has taken to respond to Hurricane Katrina include TXU Electric Delivery assisting in electric service restoration efforts with 770 employees and contractors now deployed in Louisiana. Like many other electricity companies, TXU and its subsidiaries are also working with victims of Hurricane Katrina who have relocated to Texas to waive deposits and expedite connection of electricity service. TXU employees are assisting several families of employees of a utility company in Louisiana by coordinating housing in the Dallas/Fort Worth area and providing furnishings and supplies. TXU has also made a direct corporate contribution of $250,000 and pledged to match employee and contractor donations to the Power of Hope Fund, which Entergy Corporation, a major electric service provider in the Gulf Coast region, has set up and seeded with $1 million to provide long-term aid to families affected by the catastrophic storm. TXU continues to work with government officials and social service agencies to determine additional steps to provide the most effective support.