Power Keg

The TXU buyout ignites a frenzy of speculation.

IN A SPRING of acronym soup—HPV, TYC—so far one set of letters has topped them all: TXU. The proposed $32 billion sale of the North Texas electric giant—the largest corporate buyout in the history of the universe—raises the most questions for average Texans. Yes, there are the feel-good promises: Prospective buyers Kohlberg Kravis Roberts and Company and Texas Pacific Group have offered to abandon plans to build eight carbon dioxide–spewing coal plants and throw in a 10 percent reduction in electric rates for TXU’s 2.3 million customers for good measure. But is this really the breath of fresh air we were waiting for? Cynics in the Legislature, worried that consumers will get the short end of the stick, are scurrying to give the Public Utility Commission final say on the sale, and additional suitors will likely materialize before the deal is finalized. Will the controversial plants be revived by alternative investors? And if KKR and TPG (more acronyms!) prevail, how long will they keep their promise to scale back on dirty coal? Juicier speculation persists: How many millions of dollars does TXU CEO John Wilder stand to make on the deal? And just who is the Securities and Exchange Commission going to nail for insider trading? With buyer’s remorse rampant in the Legislature—over college tuition deregulation, toll roads, and now deregulation of the Texas electric industry, which has only given us climbing rates—lawmakers may use the time left in the session to show Texas utility companies who’s really got power. So don’t crank down the air-conditioning just yet.

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