TXU
Encyclopedia
Energy Future Holdings Corporation is an electric utility
company headquartered in Energy Plaza
in Downtown
Dallas, Texas
, United States
. The company was known as TXU until its $45 billion leveraged buyout
by Kohlberg Kravis Roberts, Texas Pacific Group and Goldman Sachs
. That purchase was the largest leveraged buyout in history.
Texas Utilities was formed in 1945 as a publicly-owned holding company that owned DP&L, TP&L and TESCO. The three operating companies continued to operate separately until 1984, when they were merged into one operating company, called TU Electric ("TU" meaning "Texas Utilities"), in 1984. Following acquisitions of The Energy Group plc
in 1998 in the United Kingdom
and a power generator in Australia
, Texas Utilities became TXU.
In 1996, TXU merged with the parent company of Lone Star Gas, allowing TXU to become the largest provider of electricity
and natural gas
in the state of Texas
. In 2002, the state of Texas deregulated the Texas electric market
, and TXU lost its monopoly on retail electric sales in northern Texas; TXU now competes statewide against other energy companies like Dynowatt
, Texas Power
, Reliant Energy
, Bounce Energy, Direct Energy
, Stream Energy
, Gexa Energy
, Green Mountain Energy
, Cirro Energy
and Commerce Energy
.
TXU divested itself of its European holdings in late 2002 mainly due to the collapse of its UK
holdings and then its Australian holdings in 2004. Also in October 2004 TXU sold its natural gas properties to Atmos Energy
. TXU's former Australian assets were sold to Singapore Power
and then split up, with Singapore Power retaining the distribution businesses (electricity
and natural gas
distribution networks) in the state of Victoria
, while divesting the retail and generation businesses to Hong-Kong-based CLP Group, trading as TRUenergy. On May 18, 2004 TXU and Capgemini
then entered a limited partnership to form Capgemini Energy Limited Partnership, a new company that will initially provide business process services and information technology solutions to TXU.
firms KKR, TPG Capital and Goldman Sachs
purchased TXU in 2007; the sale became final on October 10, 2007. As part of the buyout, the electric distribution part of the company is now called Oncor Electric Delivery
, the electric generation business is called Luminant
, leaving TXU Energy as solely a retail provider of electricity without any electrical distribution or production assets. Luminant owns and operates the Comanche Peak
nuclear power plant
.
Electric utility
An electric utility is a company that engages in the generation, transmission, and distribution of electricity for sale generally in a regulated market. The electrical utility industry is a major provider of energy in most countries. It is indispensable to factories, commercial establishments,...
company headquartered in Energy Plaza
Energy Plaza
Energy Plaza is a skyscraper in the City Center District of downtown Dallas, Texas, north of Thanks-Giving Square at 1601 Bryan Street. Designed by I.M. Pei and Partners, the building is and 49 stories, making it the ninth tallest building in Dallas....
in Downtown
Downtown Dallas
Downtown Dallas is the Central Business District in Dallas, Texas USA, located in the geographic center of the city. The area termed "Downtown" has traditionally been defined as bounded by the downtown freeway loop: bounded on the east by I-345 Downtown Dallas is the Central Business District...
Dallas, Texas
Dallas, Texas
Dallas is the third-largest city in Texas and the ninth-largest in the United States. The Dallas-Fort Worth Metroplex is the largest metropolitan area in the South and fourth-largest metropolitan area in the United States...
, United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
. The company was known as TXU until its $45 billion leveraged buyout
Leveraged buyout
A leveraged buyout occurs when an investor, typically financial sponsor, acquires a controlling interest in a company's equity and where a significant percentage of the purchase price is financed through leverage...
by Kohlberg Kravis Roberts, Texas Pacific Group and Goldman Sachs
Goldman Sachs
The Goldman Sachs Group, Inc. is an American multinational bulge bracket investment banking and securities firm that engages in global investment banking, securities, investment management, and other financial services primarily with institutional clients...
. That purchase was the largest leveraged buyout in history.
History
The company traces its history to the beginnings of electric service in northern Texas. Predecessor companies include Dallas Power & Light (DP&L), which served the city of Dallas; Texas Electric Service Company (TESCO), which served areas surrounding Fort Worth; and Texas Power and Light (TP&L), which served other areas of northern and west-central Texas.Texas Utilities was formed in 1945 as a publicly-owned holding company that owned DP&L, TP&L and TESCO. The three operating companies continued to operate separately until 1984, when they were merged into one operating company, called TU Electric ("TU" meaning "Texas Utilities"), in 1984. Following acquisitions of The Energy Group plc
The Energy Group
The Energy Group plc was a British power generator and distributor. After it was demerged from Hanson plc in 1996 it was listed on the London Stock Exchange and was once a constituent of the FTSE 100 Index but it was acquired by Texas Utilities in 1998....
in 1998 in the United Kingdom
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
and a power generator in Australia
Australia
Australia , officially the Commonwealth of Australia, is a country in the Southern Hemisphere comprising the mainland of the Australian continent, the island of Tasmania, and numerous smaller islands in the Indian and Pacific Oceans. It is the world's sixth-largest country by total area...
, Texas Utilities became TXU.
In 1996, TXU merged with the parent company of Lone Star Gas, allowing TXU to become the largest provider of electricity
Electricity
Electricity is a general term encompassing a variety of phenomena resulting from the presence and flow of electric charge. These include many easily recognizable phenomena, such as lightning, static electricity, and the flow of electrical current in an electrical wire...
and natural gas
Natural gas
Natural gas is a naturally occurring gas mixture consisting primarily of methane, typically with 0–20% higher hydrocarbons . It is found associated with other hydrocarbon fuel, in coal beds, as methane clathrates, and is an important fuel source and a major feedstock for fertilizers.Most natural...
in the state of Texas
Texas
Texas is the second largest U.S. state by both area and population, and the largest state by area in the contiguous United States.The name, based on the Caddo word "Tejas" meaning "friends" or "allies", was applied by the Spanish to the Caddo themselves and to the region of their settlement in...
. In 2002, the state of Texas deregulated the Texas electric market
Deregulation of the Texas Electricity Market
Electricity deregulation in Texas was the result of the coming into force of Texas Senate Bill 7 on January 1, 2002. According to the law, deregulation is to be phased in over several years....
, and TXU lost its monopoly on retail electric sales in northern Texas; TXU now competes statewide against other energy companies like Dynowatt
Dynowatt
Dynowatt, headquartered in Dublin, Ohio is an American electricity supplier to residential customers from Dallas to Houston to Corpus Christi to Odessa and most places in-between....
, Texas Power
Texas Power
Texas Power is a retail electricity provider serving all deregulated electricity areas in Texas. They are located in Arlington, Texas. Texas Power bills customers for electric service provided by the power distribution companies....
, Reliant Energy
Reliant Energy
RRI Energy, Inc. , based in Houston, Texas, United States, was an energy company that provided electricity to wholesale customers in the United States. The company was one of the largest independent power producers in the nation with more than 14,000 megawatts of power generation capacity across...
, Bounce Energy, Direct Energy
Direct Energy
Direct Energy is a North American retailer of energy and energy services. The company was founded in 1986. With over six million customer relationships in Canada and the United States, it is the largest energy and home services retailer in North America. The current President and Chief Executive...
, Stream Energy
Stream Energy
Stream Energy is an American retail electricity and natural gas firm active in the Texas, Pennsylvania, New Jersey, Maryland and Georgia deregulated energy markets and headquartered within the building in Dallas...
, Gexa Energy
Gexa Energy
Gexa Energy, headquartered in Houston, Texas, is an American retail electricity provider which sells electricity service to residential and commercial customers in all deregulated markets in Texas.The company is a subsidiary of NextEra Energy Resources...
, Green Mountain Energy
Green Mountain Energy
Green Mountain Energy is a United States company that offers clean electricity products, and carbon offsets to residential and commercial customers.-History:...
, Cirro Energy
Cirro Energy
Cirro Energy is an American retail electric provider based in Richardson, Texas, that delivers electrical service and customer service to tens of thousands of power customers throughout the Electric Reliability Council of Texas distribution grid within the deregulated Texas electricity...
and Commerce Energy
Commerce Energy
Commerce Energy Group, Inc., based in Costa Mesa, California, was the parent company of a wholly owned independent electricity and natural gas marketing company, Commerce Energy Inc. The company was purchased by Universal Energy Group on December 11, 2008....
.
TXU divested itself of its European holdings in late 2002 mainly due to the collapse of its UK
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
holdings and then its Australian holdings in 2004. Also in October 2004 TXU sold its natural gas properties to Atmos Energy
Atmos Energy
Atmos Energy Corporation , headquartered in Dallas, Texas, is the largest distributor of natural gas in the United States, serving 3.2 million customers nationwide. Atmos acquired TXU's natural gas and pipeline holdings in 2004. The company began as Energas in 1983, a spinoff of the natural gas...
. TXU's former Australian assets were sold to Singapore Power
Singapore Power
Singapore Power is a company which provides electricity and gas transmission, distribution services, and market support services to more than a million customers in Singapore. It is the only electricity company in Singapore, and is also one of the largest corporations in Singapore...
and then split up, with Singapore Power retaining the distribution businesses (electricity
Electricity
Electricity is a general term encompassing a variety of phenomena resulting from the presence and flow of electric charge. These include many easily recognizable phenomena, such as lightning, static electricity, and the flow of electrical current in an electrical wire...
and natural gas
Natural gas
Natural gas is a naturally occurring gas mixture consisting primarily of methane, typically with 0–20% higher hydrocarbons . It is found associated with other hydrocarbon fuel, in coal beds, as methane clathrates, and is an important fuel source and a major feedstock for fertilizers.Most natural...
distribution networks) in the state of Victoria
Victoria (Australia)
Victoria is the second most populous state in Australia. Geographically the smallest mainland state, Victoria is bordered by New South Wales, South Australia, and Tasmania on Boundary Islet to the north, west and south respectively....
, while divesting the retail and generation businesses to Hong-Kong-based CLP Group, trading as TRUenergy. On May 18, 2004 TXU and Capgemini
Capgemini
Capgemini is a French global IT services company, one of the world's largest management consulting, outsourcing and professional services companies with a staff of 114,274 operating in 40 countries. It is headquartered in Paris and was founded in 1967 by Serge Kampf, the current chairman, in...
then entered a limited partnership to form Capgemini Energy Limited Partnership, a new company that will initially provide business process services and information technology solutions to TXU.
Buyout
Private equityPrivate equity
Private equity, in finance, is an asset class consisting of equity securities in operating companies that are not publicly traded on a stock exchange....
firms KKR, TPG Capital and Goldman Sachs
Goldman Sachs
The Goldman Sachs Group, Inc. is an American multinational bulge bracket investment banking and securities firm that engages in global investment banking, securities, investment management, and other financial services primarily with institutional clients...
purchased TXU in 2007; the sale became final on October 10, 2007. As part of the buyout, the electric distribution part of the company is now called Oncor Electric Delivery
Oncor Electric Delivery
Oncor Electric Delivery is Texas's largest regulated electric delivery business and the sixth largest in the U.S. It supplies electricity to approximately 7.5 million consumers in a service area of over 400 communities in east, west and north-central Texas, including Dallas, Fort Worth, Midland,...
, the electric generation business is called Luminant
Luminant
Luminant is a Texas-based electric utility. It is a wholly owned subsidiary of Energy Future Holdings Corporation. Luminant's operations include electricity generation and wholesaling, mining, construction, and development...
, leaving TXU Energy as solely a retail provider of electricity without any electrical distribution or production assets. Luminant owns and operates the Comanche Peak
Comanche Peak Nuclear Generating Station
Comanche Peak Nuclear Power Plant is located in Somervell County, Texas. The nuclear power plant is located 40 miles southwest of Ft. Worth and about 60 miles southwest of Dallas. It relies on nearby Squaw Creek Reservoir for cooling water...
nuclear power plant
Nuclear power plant
A nuclear power plant is a thermal power station in which the heat source is one or more nuclear reactors. As in a conventional thermal power station the heat is used to generate steam which drives a steam turbine connected to a generator which produces electricity.Nuclear power plants are usually...
.
See also
- Deregulation of the Texas electricity marketDeregulation of the Texas Electricity MarketElectricity deregulation in Texas was the result of the coming into force of Texas Senate Bill 7 on January 1, 2002. According to the law, deregulation is to be phased in over several years....
- Electric Reliability Council of Texas (ERCOT)
External links
- Energy Future Holdings
- Luminant
- Oncor
- TXU Energy
- World Energy Magazine - Texas Electric Market Restructuring: Unleashing "Competitive Darwinism" - Article by John Wilder, CEO of TXU
- World Energy Magazine - Powering the Future of Texas" - Article by John Wilder, CEO of TX