Dallas, Texas — (METERING.COM) — February 28, 2007 – TXU Corp., based in Texas, has been bought by an investor group led by Kohlberg Kravis Roberts & Co. (KKR) and Texas Pacific Group (TPG) and will become a private company. Public benefits arising from the transaction include price cuts, price protection, investments in alternative energy and stronger environmental policies.
C. John Wilder, chairman and chief executive officer of TXU Corp., said, “This is a momentous event for our company in our long journey to transform TXU from a former integrated monopoly to high performance businesses. The new ownership and business structure will enable us to better meet the growing energy needs of Texans. The long-term capital, expertise and resources of the investor group will allow us to increase our focus on reliability, lower prices, outstanding customer service and innovative products, and investments in long-term environmentally sound technology. TXU is a proud Texas corporate citizen, and the company will continue to operate with the same commitment and dedication to serving Texas.
“KKR, TPG and the rest of the investor group are all world-class investors who bring valuable experience in the industry. With these long-term and very informed investors, we can execute a new strategy that will allow us to reshape TXU’s program to build new electric generation units,” Wilder continued. “Our new strategy will meet two important objectives: addressing Texas’ immediate and future energy and reliability needs; and doing so in a manner that responds to the desires of policy makers and other key stakeholders to incorporate new technology advancements and conservation.”
The acquisition of TXU by the investor group will be accompanied by an environmental focus that will make TXU a leader in conservation and energy efficiency, creating a fundamental change in the Texas electric market. In addition, the company’s new strategic direction will seek to achieve top environmental performance in the industry and greater involvement and dialogue with environmental, government and community leaders.
Some of the benefits to customers are:
- A 10 per cent price decrease, resulting in savings of over $300 million annually for residential customers.
- Price protection through September 2008.
- Planned coal-fueled generation units reduced from eleven to three, preventing 56 million tons of annual carbon emissions.
- A $400 million investment in demand side management initiatives.
TXU will be reorganized into three separate businesses – generation, transmission and distribution, and retail. These businesses will have distinct names and separate management teams, headquarters and boards of directors.
Luminant Energy will be the new company name for the generation business, reflecting its new direction and encompassing TXU’s power, wholesale, development and construction businesses. TXU Electric Delivery, encompassing transmission and distribution, will be renamed Oncor Electric Delivery, and: TXU Energy will retain the use of its name for the retail business.
Headquarters for each of the three businesses will remain in the Dallas/Fort Worth area.