Monday, February 26, 2007

why the txu buyout is good for texas

Kohlberg Kravis Roberts & Co. and Texas Pacific Group will participate in the biggest corporate buyout in history as they purchase embattled energy utility TXU for a staggering $32 billion. The aforementioned will also assume around $13 billion in debt.

Today's NBC 5 4 p.m. broadcast mentioned that consumers will save a total of 10% on their energy bills: 6% by the end of March and 4% after the sale is final.

If that's not good enough for you, the deal also includes a provision to scrap eight of the controversial outdated coal plants. Thanks to this buyout, we can all breathe a little easier (and quite literally).

If this isn't good news for Texans, I don't know what is.

Job's Anger has more on how the buyout could save our environment. McBlogger has a take on the motivation for the deal. For a more in-depth look at the compromise, check out Capitol Annex.


Anonymous said...

It may not be totally good. Its a leveraged buyput where TXU will assume massive debt. In leveraged buyouts there isnt always a lot of investment in production capital. So Texas largest energy producer instead of expanding capacity will be expanding debt.

Without expanded capacity rates could shoot way up because there will be peak shortfalls coming in several years.


Anonymous said...

i would have to agree