DATELINE: 16 July 2004
TXU to Pay Penalty for Giveaways
By Dan Piller
Star-Telegram Staff Writer
TXU Corp. agreed to a $220,000 settlement with the Public Utility Commission of Texas over a marketing campaign last year in which it gave away $25 movie theater gift certificates to electricity customers who returned to TXU Energy electricity service.
The commission decided that such inducements, which were given to 540 returning customers, are not allowed under Texas law.
"Because TXU has the price to beat, it was determined by the commission that any inducement is a restriction of competition," commission spokesman Terry Hadley said.
Under Texas law, an incumbent utility such as TXU is supposed to offer a regulated "price to beat" for electricity that competitors may then undercut.
TXU stopped the movie pass giveaways in November shortly after they began, TXU spokesman Chris Schein said.
"Frankly, we never realized that it might be in violation of the rules, and we quit doing it when the matter was brought to our attention," Schein said. About 540 of 67,000 former customers received the coupons shortly after the offer was made in November.
The settlement was the second action involving an electricity provider this year. The utilities commission has also fined Direct Energy $750,000 for allegedly running credit checks on customers who complained to the commission about being slammed. Direct Energy said an overzealous telemarketing firm was responsible.
TXU was chastised, but not fined, for a promotional campaign directed at its own customers reminding them that their electricity rates would drop during winter months. The reminder didn't say that those rates would automatically rise during the summer.
|
