DALLAS (AP) - TXU Corp. told regulators Friday to disregard a threat to shut down some of its power plants because of a dispute over accusations of price manipulation, and said it might even put some mothballed plants back into operation.
Chief Executive C. John Wilder acknowledged that the company had mishandled the situation and promised to 'get it right the next time.'
The retreat came after investors trying to buy TXU for $32 billion sharply criticized the company and said they had no intention of closing plants.
Kohlberg Kravis Roberts & Co. and Texas Pacific Group, who are leading the investor group, said they had not seen the letter threatening the plant shutdown before it was sent 'and we strongly disagree with it.' They said they were 'strongly advising TXU' to settle its dispute with regulators over power prices.
If KKR and Texas Pacific Group succeed in buying TXU, the largest power generator in Texas, it would be the biggest private buyout ever.
The state's independent market monitor and the Public Utility Commission staff accuse TXU of manipulating wholesale power prices in the summer of 2005 by offering power to the state's main grid at inflated prices. The maneuvers cost consumers $70 million, regulators say.
The PUC staff has proposed a $210 million penalty.
TXU is contesting the charges and separately negotiating with the PUC to avoid similar charges if peak-demand electric prices spike in the future.
TXU and the investor group said the Dallas-based utility cannot shut down power plants without a review by operators of the power grid.
'There is no intention among the investor group to shut down plants, especially those needed to ensure reliability,' the investors said in a statement. They said they would inform the PUC of their commitment.
Since agreeing in late February to buy TXU, leaders of KKR and Texas Pacific have criticized the company, especially over high rates for consumers. They continued that tack on Friday.
'We don't own the company,' they said. 'The more quickly this transaction can be completed, the sooner that TXU can set a different course and a new direction, one that encourages open and productive dialogue with regulators, elected officials and other stakeholders.'
TXU chief Wilder repeated the company's pledge to invest more than $3 billion to increase power supply in Texas and said the company 'stands ready' to bring back more than 1,600 megawatts of generating capacity.
That promise of bringing back idled plants was in direct contrast to language used by Mike McCall, the CEO of TXU's wholesale power division, in his letter this week to the PUC.
McCall said Friday that 'TXU apologizes for creating any perception of threatening to shut down power plants in Texas ... We are asking the PUC to disregard this filing.'
The state's independent market monitor is looking into unusually high prices that occurred again Tuesday.
Dan Jones, an official with the monitoring company, Potomac Economics Ltd., said he expected to determine by next week whether the high prices were caused by market manipulation or an early spell of warm weather that raised demand for power.
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