TXU’s emissions U-turn shocks power industry

HOUSTON (MarketWatch) — TXU Corp.’s decision to whittle down plans to build 11 carbon-spewing, coal-fired power plants as part of its buyout deal with private-equity firms sent a chill Monday through both Wall Street and Washington, signaling that utilities can no longer afford to ignore climate change.

But with coal becoming too toxic to handle, nuclear plants taking too long to build and natural-gas prices going through the roof, little in the way of specifics is being offered on how utilities will provide clean and affordable power to an energy-hungry nation as more states push to deregulate their electrical grid and open it to the market’s machinations.

Environmentalists cheered the announcement that TXU was axing eight of 11 coal-fired power plants that it had planned to build in Texas by 2010 as part of a $45 billion buyout deal with Kohlberg Kravis Roberts & Co., Texas Pacific Group and Goldman Sachs Group.

Prior to announcing the largest leveraged buyout in corporate history, the private equity firms spent about two weeks negotiating with powerful environmental groups to fashion a takeover proposal that would bring the activists on board and head off any potential costly litigation.

MarketWatch