Energy Future Holdings
32°46′59″N 96°47′57″W / 32.783139°N 96.799106°W
TPG Capital Goldman Sachs Capital Partners | |
Website | energyfutureholdings |
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Energy Future Holdings Corporation is an
As of February 2013[update], the company has been described as "struggling"
History
The company traces its history to the beginnings of electric service in northern Texas. Predecessor companies include Dallas Power & Light (DP&L, founded 1917 with roots dating to 1882), which served the city of Dallas; Texas Electric Service Company (TESCO, founded 1929 with roots dating to 1885), which served
DP&L, TP&L and TESCO were connected by a single
Deregulation
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, a maneuver which set the stage for deregulation.[14] In 2002, the state of Texas deregulated the Texas electric market, and TXU lost its monopoly on retail electric sales in northern Texas.
TXU continued to own transmission and distribution facilities, but was required to open retail sales to competition. Competitors during this time period included
2002–2004 divestitures
TXU divested itself of its European holdings in late 2002 mainly due to the collapse of its UK holdings and then of its Australian holdings in 2004. The UK operations had been purchased following a bidding war with PacifiCorp which pushed up the price paid substantially from opening offers but most of the cost thereof was indebted back onto the UK businesses themselves.[15] Falling UK energy prices (which later rose substantially) and outstanding purchase debt eventually crippled the European business. TXU considered investing £250 million from its US business to bolster the equity base, but following Rating Agency pressure this was shelved in order to protect the credit ratings of the US parent. As a consequence the directors of the UK businesses appointed Administrators in September 2002. The UK retail business and several of its gas fields were purchased by Eon (owners of Powergen), who closed its commercial operations in Rayleigh, Essex and relocated them to Powergen offices in Nottingham & Coventry. TXU's incomplete new UK headquarters were not part of the deal and are now used by Suffolk County Council.
Also, in October 2004, TXU sold its
On May 18, 2004 TXU and Capgemini entered a limited partnership to form Capgemini Energy Limited Partnership, a new company that will initially provide business process services and information technology solutions[buzzword] to TXU.
2007 buyout and 2014 bankruptcy
Subsidiaries
In 2012, financial ties among subsidiaries were substantially severed, securing their financial independence.[1]
- Oncor Electric Delivery, an independent, regulated subsidiary which is the company's electricity delivery unit, focusing on power transmission and distribution.[1]
- Texas Competitive Electric Holdings, an independent unregulated subsidiary when engages in competitive selling in the Texas electricity market.[1]
- Luminant
Financial problems
The upcoming maturity of a significant amount of debt, coupled with sizable financial losses, had many observers predicting that EFH will ultimately file for bankruptcy,[17] which it did on April 29, 2014. The prominent credit-rating firm Moody's had called EFH "a financially distressed company with an untenable capital structure."[18]
The pending bankruptcy represents the biggest bankruptcy of a private equity-backed company since the failure of Chrysler Group in 2009.[19]
Environmental impacts
Energy Future Holdings owns, and has closed the mines for, four of the nation's highest emitting coal-fired power plants, which together account for approximately one quarter of all industrial/utility air pollution reported to Texas regulators. Its Big Brown (closed) , Martin Lake (mines closed), Monticello (closed), and Sandow (closed) plants have been the subject of scrutiny by environmental groups for pollutants such as nitrogen oxides, mercury, and sulfur dioxides.
The Martin Lake, Big Brown, and Monticello plants ranked first, third, and fourth, respectively, in airborne mercury pollution in the United States according to company reports submitted to the EPA.[17][20] Such high levels of mercury pollution have drawn criticism for their harmful effects on child development.[20]
NOx emissions from EFH's coal plants help contribute to harmful levels of ozone in the air in Dallas and other parts of east Texas, and ozone pollution can trigger asthma attacks and respiratory problems.[20]
"Beyond TXU" campaign
The Sierra Club and allies launched their "Beyond TXU" campaign to encourage retail electricity customers to switch from EFH's TXU Energy to other retail electric providers without a connection to the EFH coal fleet. Through a variety of advertisements in the DFW area, coupled with a social media campaign, these groups have encouraged customers to visit www.powertochoose.org, a website administered by the Public Utility Commission of Texas, that provides information on retail electric providers.[20]
Environmental litigation
EFH and its Luminant subsidiary are the subject of litigation by the Sierra Club for alleged violations of the Clean Air Act at the Big Brown Plant, and in 2013 a federal district court judge ruled in favor of Sierra Club on a motion by EFH to stop or slow the case from coming to trial.[21] Similarly, Sierra Club has filed a Clean Air enforcement case against the Martin Lake Plant, and a magistrate judge in that case made a recommendation in 2013 in favor of Sierra Club on an EFH request to stop or slow the case.[22] On July 13, 2012, the U.S. Environmental Protection Agency sent EFH's Luminant subsidiary an enforcement notice under the Clean Air Act about alleged violations of the "New Source Review" provisions of the act, for actions taken by Luminant at the Big Brown and Martin Lake plants.[23]
Property tax litigation
Luminant, a subsidiary of Energy Future Holdings, sued Milam, Freestone, Rusk, and Titus counties in 2011 to challenge the taxable values that the counties had set for Luminant coal plants in each county. As a result of the lawsuits, Luminant reduced its tax liabilities by several hundred million dollars. As significant taxpayers in each county, the decisions have reduced funding to local school districts. Some have suggested that Luminant only sued over property appraisals for coal plant sites that will require pollution upgrades or changes in the near future.[24][25]
See also
- Deregulation of the Texas electricity market
- Electric Reliability Council of Texas (ERCOT)
- List of power stations in Texas
References
- ^ a b c d e Mike Spector; Matt Wirz (9 February 2013), "Texas Power Giant Could Be Split Up", The Wall Street Journal, Ryan Dezember, pp. B1–B2
- ^ "Former Qualcomm chairman Jacobs to exit board of directors". Reuters. 2018-03-16. Retrieved 2018-03-18.
- ^ Energy Future Holdings Offers Bankruptcy Plan April 15, 2013 New York Times
- ^ "Chapter 11 Petition" (PDF). PacerMonitor. Retrieved 29 October 2015.
- ^ Fuquay, Jim; Kaskovich, Steve (28 April 2014). "Energy Future Holdings files for Chapter 11 bankruptcy". Fort Worth Star-Telegram. Gary Wortel. Retrieved 29 October 2015.
- ^ "Berkshire Hathaway Makes a $9 Billion Bid for Energy Future Holdings". The New York Times. 7 July 2017.
- ^ "Sempra Energy Announces Agreement To Acquire Ownership Interest In Oncor". Retrieved 2017-12-10.
- ^ Jameson. A (22 October 200w). "Eastern Electricity changes hands again". The Times.
- ^ Fisher. Daniel (9 August 1999). "Waiting Game". Forbes.
- ^ "TXU to Become Second Largest Energy Retailer in the United Kingdom". Power Engineering International. 8 August 2000.
- ^ OFGEM (7 August 2000). "TXU Europe's acquisition of Norweb Energi" (PDF).
- ^ "WORLD BUSINESS BRIEFING: EUROPE; TXU BUYS UTILITY STAKE". New York Times. 8 July 2000.
- ^ "TXU buys Braunschweiger Versorgungs-AG". Energie Chronik. No. 20506. 2 May 2002.
- ^ TEXAS UTILITIES TO BUY ENSERCH CORP.
- ^ "ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934". United States Securities and Exchange Commission. 21 March 2001.
- ^ Chediak, Mark (15 April 2013). "Energy Future Proposes Pre-Packaged Bankruptcy of Some Units". Bloomberg. Bloomberg News.
- ^ a b Lee Loftis, Randy. "Sierra Club steps up campaign against Energy Future Holdings". Dallas Morning News.
- ^ Schnurman, Mitchell. "Debt bomb ticking at Energy Future Holdings". Fort Worth Star-Telegram.
- ^ Carey, David (25 February 2013). "Biggest LBO Failure Is Energy Future Purgatory for KKR". Bloomberg. Bloomberg News.
- ^ a b c d Garland, Jenna (11 April 2013). "Sierra Club Launches Beyond TXU Campaign with Dallas Ad Buy". Sierra Club.
- ^ "SIERRA CLUB, ALLIES ISSUE STATEMENT ON COURT RULING AGAINST LUMINANT, BIG BROWN". Sierra Club. 8 February 2013.
- ^ "Federal Magistrate Judge: Texas Coal Plant Can't Dodge Clean Air Act". Earth Justice. 6 March 2013.
- ^ Souder, Elizabeth. "EPA accuses Energy Future Holdings' Luminant of pollution violations at two coal plants". Dallas Morning News. Archived from the original on 2013-09-27. Retrieved 2013-04-24.
- ^ Chubb, Curtis. "Luminant, county settle on taxable property value". Cameron Herald. Archived from the original on 2013-06-28.
- ^ Souder, Elizabeth. "EFH sues four rural counties over coal plant appraisals". Dallas Morning News.
External links
- Official website
- Luminant
- Oncor
- 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