Originally published Monday, February 26, 2007 at 12:00 AM
Energy giant agrees to $45 billion buyout
TXU, the largest energy provider in Texas, agreed Sunday night to a $45 billion buyout that would not only be the largest private-equity...
The Washington Post
TXU, the largest energy provider in Texas, agreed Sunday night to a $45 billion buyout that would not only be the largest private-equity deal in history but would also feature an unusual twist:
The buyers have promised environmental groups they would cancel a slew of coal-fired power plants on the firm's drawing boards.
The buyout firms' deal with environmental groups, which could become a landmark in the battle over climate-change policy, would force an abrupt turnaround in the strategy of TXU, which has defied environmentalists' and congressional criticism to expand coal use and carbon-dioxide emissions.
The environmental agreement was the idea of the private-equity firms Texas Pacific Group and Kohlberg Kravis Roberts, which made it a condition of the acquisition, according to several sources involved in the negotiations, who gave details of the deal .
Texas Pacific's head, David Bonderman, sits on the boards of the World Wildlife Fund and the Grand Canyon Trust, and was a key figure in negotiating with power plants in Arizona to reduce air pollution over the Grand Canyon.
In the TXU case, he asked William Reilly, who had led the Environmental Protection Agency under President George H.W. Bush, to reach out and negotiate with environmental groups.
If shareholders approve the acquisition, TXU would back federal legislation that would require reductions in carbon-dioxide emissions through a cap-and-trade system.
It would shelve plans for eight of 11 coal-fired plants that current TXU executives had proposed for Texas and would drop plans to build new coal plants in Pennsylvania and Virginia.
The company would also double its spending to promote energy efficiency, to $80 million a year, for five years.
"We think this is really a big deal, a watershed moment in America's fight against global warming," said Jim Marston, regional director of Environmental Defense in Austin, Texas.
He said it would reshape the electricity sector in Texas and alter the attitudes of Texas congressmen toward climate-change legislation.
The buyout firms also promised to cut TXU's emissions of carbon dioxide to 1990 levels by 2020.
![]()
In return, Environmental Defense, which has been leading the fight against TXU's coal-expansion plans, would drop its objections to three large new units in Texas.
The TXU board met Sunday night to vote on the leveraged buyout. The deal could be officially announced today.
There are financial advantages to the environmental agreement. When they buy companies, private-equity firms typically try to cut costs rather than expand operations. TXU had estimated that the ambitious coal-plant expansion would cost at least $10 billion; others suggested the ultimate price tag could be much higher.
A turnaround at TXU would represent a reproach to C. John Wilder, TXU's chief executive, who in the past has criticized new technology that burns coal with fewer greenhouse gases as too expensive or technologically unsound.
UPDATE - 09:46 AM
Exxon Mobil wins ruling in Alaska oil spill case
UPDATE - 09:32 AM
Bank stocks push indexes higher; oil prices dip
UPDATE - 08:04 AM
Ford CEO Mulally gets $56.5M in stock award
UPDATE - 07:54 AM
Underwater mortgages rise as home prices fall
NEW - 09:43 AM
Warner Bros. to offer movie rentals on Facebook

Entertainment | Top Video | World | Offbeat Video | Sci-Tech
nwautos
Turismo upgrade "Gran Turismo 5: XL Edition" for PlayStation 3 has features such as new car-tuning settings, new NASCAR vehicles, better replay video...
Post a comment
- Lakewood cop accused of embezzling $150K meant for slain officers' families
- 3 big health insurers stockpile $2.4 billion as rates keep rising
- Agency set to investigate handling of 911 call about Josh Powell
- Quick decisions: How Washington hired its new football staff
- Historic day for gay marriage as another fight looms
- Justin Wilcox's versatile defensive style is the right fit for Huskies | Jerry Brewer
- Social worker recounts minutes before Powell fire
- It's Terrence Time: Enigmatic Ross leads Huskies
- $25B settlement reached over foreclosure abuses
- Club promoter convicted in brutal 2010 murder of Des Moines prostitute
- Gay-marriage bill passes House, awaits Gregoire's signature
492 - Wanted in Seattle classrooms: more teachers of color
378 - Council members get briefing on arena proposal, minus details
282 - AP Source: Obama to change birth control rule
274 - 3 big health insurers stockpile $2.4 billion as rates keep rising
245 - Oregon live game thread
155 - Pac-12 picks ... including the UW game
140 - Worker: Josh Powell told son he had 'surprise'
108 - Rough road again
103 - USA Today further spells out how Mariners, handful of clubs next in line for huge cash windfall
74
- Wanted in Seattle classrooms: more teachers of color
- State Medicaid program to stop paying for unneeded ER visits
- 3 big health insurers stockpile $2.4 billion as rates keep rising
- Economy, blogs give survivalists new reason to look to Northwest
- State's share of mortgage settlement: $648 million
- One man's audacious pursuit of sailing history
- Darren Berg gets 18-year sentence for Ponzi scheme
- Bellevue College adds a third bachelor's degree program
- $25B settlement reached over foreclosure abuses
- 'Gauguin and Polynesia': dazzling mix-and-match | Art review







