Where environmental groups had been fighting against new coal plants only days ago, a record buyout will put TXU firmly behind their agenda:
Under a proposed $45 billion buyout by a team of private equity firms, the TXU Corporation, a Texas utility that has long been the bane of environmental groups, will abandon plans to build 8 of 11 coal plants and commit to a broad menu of environmental measures, according to people involved in the negotiations.
The roster of commitments came through an unusual process in which the equity firms asked two prominent environmental groups what measures could be taken to win their support. The result is an about-face from the company’s earlier approach to climate-change issues, and includes a goal of returning the carbon-dioxide emissions by TXU to 1990 levels by 2020.
Environmental groups said yesterday that they had never known of a financial deal with such an ambitious built-in environmental component.
Two private equity firms, Kohlberg Kravis Roberts & Company and the Texas Pacific Group, have proposed to buy TXU in what would become the largest leveraged buyout ever.
The consensus about climate change among scientists isn’t enough. The consensus among businesses is much more interesting, since it makes it easier to move on to the important conversation, the one over what is to be done.
The NRDC and Environmental Defense did yeoman’s work to pull this deal together, and it has the potential not just to realign the policy debate, but to make measurable progress towards a renewable energy supply. Texas is already a leader in wind power, and this deal should spark an even stronger push towards such renewable sources, lowering costs and improving quality for the technologies involved.