TXU

The proposed $45 billion purchase of TXU Corporation by private equity firms Kohlberg Kravis Roberts & Co and Texas Pacific Group hit the market like a financial hydrogen bomb. It was so big that it pushed Anna Nicole Smith off the front page for a minute. The cast of characters included William K. Reilly, former EPA Adminstrator under Bush 41, Fred Krupp of Environmental Defense and the Natural Resources Defense Council (NRDC). The enviros signed off on the deal with a promise that the new outfit would only build 3 coal plants instead of 11. Some people think this is smoke and mirrors, but there was a lot of excitement anyway.

Reilly works for Texas Pacific and he negotiated the deal with the environmental groups. TXU Corp is the largest power company in Texas with 2.4 million electricity customers and 18,300 megawatts of capacity (from 50 generating plants). The enviros agreed to drop their opposition to TXU's coal plant expansion in exchange for the 3 for 11 switch.