DATELINE: 12 November 2004
TXU plans to seek higher rates
By DAN PILLER
Star-Telegram Staff Writer
TXU Corp. plans to ask for an electric rate increase after the first of the year if natural gas prices remain at their current levels, President John Wilder said Tuesday.
TXU's regulated "price to beat" has risen by almost 33 percent, from 8.24 cents per kilowatt hour in early 2002, to the 10.9 cents per kilowatt hour the Texas Public Utility Commission approved in August. Customers are free to switch from TXU to another provider, but more than two years into the deregulation, TXU still has about 90 percent of its original residential customers.
Wilder declined to detail the size of the increase it may request for TXU Energy's 2.5 million North Texas customers.
Natural gas is used to generate about half of Texas' electricity and has become the basis for retail electricity rates. Natural gas prices have pushed rates up as much as 35 percent since Texas deregulated retail and commercial electricity markets in 2002.
And gas prices continue to rise, closing over $8 Tuesday. That has pushed up wholesale electricity prices from the normal $25-$40 per megawatt hour to as high as $85 per megawatt hour on the Texas grid Tuesday afternoon.
"We have factored rate increases into our planning for next year, assuming that prices stay at this level," Wilder said. TXU asked for and received two rate increases this year from the PUC, which set TXU's "fuel factor" for natural gas at $6 per 1,000 cubic feet.
TXU said Monday that it would raise its common stock dividend by 350 percent, from 12.5 cents per share to 56.25 cents per share. The company also said that it would earn about 40 percent more in profit next year than previously projected. TXU's stock (ticker: TXU) fell 9 cents per share to close at $61.16 Tuesday afternoon.
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