Today's Ft. Worth Star-Telegram says that TXU is facing a $210 M fine for manipulating prices. I couldn't understand what they did, but they certainly deserve to be fined. A few years ago we in North Texas had relatively low electricity rates: now we have the highest rate in the nation. This came about because the Texas legislature let TXU tie the rate for electricity to the cost of natural gas. Even though TXU only generates about one-fourth of its power with natural gas, the legislature let TXU increase the cost of electricity as the price of natural gas increased. Since the cost of coal and nuclear fuel didn't go up like natural gas did, this let TXU make a lot of money. And then, it turned out that, through oversight, the legislature didn't require TXU to reduce the price of electricity as the cost on natural gas went down. So TXU has been making huge profits as the natural gas cost has fallen to one-half the peak level. The TXU stock price is up and the chairman got an enormous bonus for his good work. And, private equity firms are now trying to buy TXU. It seems to me that there are three possibilities with regard to the legislature:
1) they are stupid
2) they are lazy or aren't paying attention, ie, they are incompetent
3) they are on the take.

It doesn't look good for the legislature in any event.