TXU’s Election Year Gambit

When you’re a major power company that contributes to Rick Perry’s campaign and his numbers are steadily going down the crapper, what do you do?

Why, stage an October Surprise, one the governor can probably try in vain to take credit for:

Reliant to cut Texas power rates

HOUSTON, Oct 3 (Reuters) – Power company TXU Corp. (TXU.N: Quote, Profile, Research) said on Tuesday it will take a fourth-quarter charge of $165 million to $170 million to fund a one-time payout of $100 per household to its north Texas customers, an incentive to retain them as the state moves to full electric competition next year.

TXU Energy, the largest Texas power retailer, and Reliant Energy Inc. (RRI.N: Quote, Profile, Research), the second-largest, on Tuesday launched a round of new price offers designed to lock in customers at rates slightly below the current “price-to-beat,” or PTB, which expires at the end of the year.

In addition to the $100 loyalty payout to current PTB customers, which TXU will pay via credits in four quarterly installments beginning in November, the company is offering customers the option of fixed rates for up to three years.

Wachovia Securities analyst Samuel Brothwell cut his TXU 2006 earnings estimate by 22 cents to $5.33 per share, to reflect the $100 million after-tax impact of the bonus payment. In a note to clients, Brothwell said the move was a "smart, pre-emptive move" to limit customer loss in 2007. He rates TXU shares "outperform."

It's a "smart, pre-emptive move," so Rick Perry can say that his coal power plants are getting us lower electric rates.

You know, I am not a tinfoil-hat-conspiracist, but crap like this really makes me wonder what's going on in TXU's boardroom and if Rick Perry has these jokers douches on speed dial.

Sure, it's a great idea for TXU. But, with high energy prices a campaign issue this year, it's a purely political move when you get right down to it. That, and TXU's damned tired of all the bad press it's getting as a result of the coal power plants Rick Perry's trying to fast track.

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