Tuesday, October 1, 1996

State Agency: TU Owes Customers $105 Million For Overcharges

By Associated Press

AUSTIN (AP) - A state agency says Texas Utilities Electric Company owes customers $105 million for charges it deems unreasonable.

The Office of Public Utility Counsel, an ombudsman agency representing ratepayers, filed expert testimony Monday in a Public Utility Commission case regarding fuel costs paid by customers between 1992 and 1995.

TU admits it overcollected $101 million in fuel expenses during that span, according to the ombudsman.

But the Office of Public Utility Counsel claims it found another $105 million that TU owes its customers.

The biggest portion of that amount is related to the collapse of a 600-foot-high stack at the TU steam generation plant in Mount Pleasant three years ago.

The collapse, which killed one worker and injured three others, resulted in additional replacement fuel expenses of $66 million.

The ombudsman claims TU "has not demonstrated that it exercised prudent oversight of the problems which resulted in the ultimate collapse of the stack."

"(TU) cannot be permitted to keep any payments for fuel expenses which were not proven to be subject to vigorous and effective management performance," said Public Counsel Suzy Ray McClellan.

Other charges excluded by the ombudsman agency:

- $500,000 in excessive aircraft usage, executive bonuses, and lobbying activities charged to ratepayers as fuel expenses.

- $17.2 million in excessive payments to the company's affiliate corporations.

- $1.22 million in replacement fuel cost caused by inadequate performance at TU's Martin Lake lignite-fired generating plant.

- $16 million in costs not authorized by the Public Utility Commission.

TU spokesman Jim Lawrence said the company had not yet seen the ombudsman's report by late Monday and would have no comment.

The State Office of Administrative Hearings will begin evidentiary hearings regarding TU's fuel costs on Oct. 24.