TXU Competition Strategy

Appreciation bonuses are on the way.
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Energy company

TXU

(TXU)

announced Tuesday a four-part strategy to retain its customers ahead of the competition in the Texas marketplace on Jan. 1, 2007.

The company's retail arm, TXU Energy, outlined a four-pronged strategy, including price freezes and bonus payments.

TXU announced its plans to provide a special, one-time appreciation bonus of $100 to all TXU Energy residential customers in areas where TXU Energy offers the PTB. The bonus will be paid via credits to customer bills in four quarterly installments beginning Nov., the company said.

The company expects the customer appreciation bonus to result in a one-time, pre- tax charge of about $165 million to $170 million in the fourth quarter.

The Dallas-based company will provide price protection to all TXU Energy residential PTB customers of record as of Dec. 31 for a period of three years until at least Jan. 1, 2010, in order to protect against the risk of rising wholesale power prices.

The company also plans to offer new pricing plans which will significantly reduce customer bills even further. TXU Energy plans allow customers to save more than 10% off of the current PTB rate, in addition to the customer appreciation bonus.

The company's shares were trading down 98 cents or 1.6% at $61.80.

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