Was TXU/PUC wholesale settlement a turkey?

On the Wednesday before Thanksgiving the Texas Public Utility Commission and the company-formerly-known-as-TXU announced a $15 million settlement of claims the company tried to manipulate wholesale power markets back in 2005.

big_turkey Big bird: Was the pre-Thanksgiving TXU/PUC announcement a “turkey drop”? The turkey float gets ready for the 59th Annual H-E-B Holiday Parade in Houston last month. (Mayra Beltran / Houston Chronicle)

That’s a pretty big sum of money as far as PUC fines go, but a mere shadow of the $210 million regulators originally proposed in March 2007.
A lot of happened since then, mostly in front of an administrative law judge in Austin, including wrangling over the scope of the violations and the appropriate fines. In the settlement agreement it says the PUC staff wanted to hold an evidentiary hearing before the judge to argue over the way damages would be calculated, but “wishing to avoid the expense and uncertainty of litigation” the parties reached a settlement.
Fort Worth Star-Telegram columnist Mitchell Schnurman isnt’ pleased with that reasoning:

“Texas’ business-friendly PUC will never be mistaken for the Justice Department, which went after Microsoft with such gusto and unlimited resources. But it’s disheartening (and disingenuous) that a large, rich state — with scores of lawyers in the attorney general’s office — would back down because of a lack of firepower.”

The Dallas Morning News has also editorialized against the PUC accepting the settlement. The Commission may vote on the settlement as early as December 18.
Interestingly, Reliant Energy, the Houston-based electric retailer, filed a “friend of the court” brief saying while it doesn’t take a position on the size of the settlement … “The magnitude of the difference [between the original fine and the settlement] is notable” because “the need for Commission concessions beyond the reduction in penalty amount is not at all obvious.” (Reliant’s main point in the brief is an earlier agreement between the PUC and TXU about how the power producer should continue its operations should have been subject to a contested hearing — but that’s another issue).
Here’s a copy of the settlement agreement. Take a look at pages 8 to 10 of the file (several documents under one electronic file) which is as close as they come to explaining “why” the deal happened. Are you satisfied with the reasons given?
BTW, some people refer to announcements made right before a big holiday — like the PUC/TXU settlement — as a “turkey drop,” presumably since the timing is designed so that people will be distracted by other events and quickly forget about the announcement (the same might be said of this pre-holiday announcement and this one). But here’s the turkey drop many of us may be most familiar with.

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