TXU deal scraps plans for 8 plants

DALLAS-FORT WORTH, TEXAS - Eight of the 11 power plants proposed to be built by TXU Corp. will be scrapped as part of a groundbreaking deal between national environmental groups and two private equity firms trying to buy the Dallas-based energy company, ending what has been perhaps the biggest environmental battle in the state's history.

The agreement to scale back TXU's $10 billion plant-building effort - first reported by the Star-Telegram - will also include a wide array of clean-air initiatives designed to stave off opposition to the sale from environmental groups and increased scrutiny from congressional leaders who are considering legislation designed to reduce pollution from power plants.

The deal would affect eight electricity-generating units at the seven plants.

"There's a new sheriff in town that has a vision on energy production that does not include fighting every environmental concern or regulation that comes along," said Jim Marston, regional director of Environmental Defense in Austin.

The two firms trying to buy TXU - Kohlberg Kravis Roberts & Co. and Fort Worth-based Texas Pacific Group - approached officials at Environmental Defense about a week and a half ago, said Marston, who flew to Texas Pacific Group's offices in San Francisco for a marathon negotiating session.

They wanted to know what it would take to appease clean-air advocates who vehemently opposed the new power plants. Sources caution that the agreement is contingent upon the companies' completing the buyout of TXU, which has not been finalized and could conceivably fall apart.

In addition, the agreement would allow the new owners to build the controversial Oak Grove power plant in Robertson County, which has been hotly contested by nearby residents and some elected leaders. A state administrative law panel last year recommended against permitting the plant because it did not use the best available pollution control technology.

If the deal sticks, it would be a major victory for environmental groups that have fought hard against the plant-building plan. Pollution from the plants would increase ozone in Waco and Dallas-Fort Worth and, according to a recent study by a Texas Christian University geologist, could send toxic mercury emissions as far away as Ohio and Illinois.

TXU's proposal has sparked state legislation to stall the plant- building effort and has led to widespread opposition from citizens groups, clean-air advocates and a coalition of mayors led by Laura Miller of Dallas and Bill White of Houston.

"This is a major victory for the citizens of Texas," said Karen Hadden, executive director of Sustainable Energy and Economic Development Coalition, one of the power-plant opponents.

The agreement, as well as the possible sale of TXU, comes just days after the company suffered a setback in its plant-building efforts. A state district judge blocked a portion of Gov. Rick Perry's 2005 executive order that sped up the process by which citizens can challenge permits to build power plants. TXU had promised stockholders that it would get permission to build the plants quickly.

TXU has said the new plants are needed to deal with increasing energy demands in a rapidly growing state.

In addition to scrapping the eight plants, the two firms would also:

- Commit to cut emissions companywide by 20 percent, a commitment TXU had vowed to make, but only if it received permission to build the 11 plants.

"They're going to do exactly what TXU promised to do, but they're not going to build all the plants," Marston said.

- Agree to slash emissions of carbon dioxide, the chief man-made contributor to climate change and a major environmental concern, to 1990 levels by 2020.

- Agree to support congressional legislation capping emissions of carbon dioxides. TXU's 11 proposed plants would have emitted 78 million tons a year.

- Pledge to increase the amount of renewable energy sources that make up the company's energy portfolio.

"I really do believe this is a milestone where we will look back and say, 'That really was the moment when we started to do something about global warming,'" Marston said.

Energy-efficiency bill enlists state in war on warming Feb 25, 2007 - The Daily Oklahoman Members of the Oklahoma House of Representatives entered the political fray over global warming recently, considering legislation aimed at improving air quality and curbing the state's contribution to global climate change. A bill passed out of subcommittee would require state government agencies to reduce their energy consumption by 30 percent within 15 years.

Its author, Rep. Ryan Kiesel, said "we have to act today" to blunt the effects of global warming.

Those effects are expected to include more severe drought-flood cycles, as well as rising sea levels.

Kiesel said he hopes the bill would encourage businesses to follow the state government's lead in addressing climate change.

"There has been some political reluctance to impose mandates on the private sector," Kiesel said. "This is lead-by-example legislation. We want to show the private sector that energy conservation is in fact pro-business."

If Kiesel's Oklahoma Carbon Emissions Reduction Act passes, Oklahoma would become one of a growing number of states with legislation designed to fight global climate change.

Evidence of effortOther states - like California and Arizona - have passed mandatory carbon emissions caps on all industries.

Oklahoma's bill is narrower in scope. But it is still "great news" for people concerned about climate change, said Judi Greenwald, director of innovative solutions for the Pew Center on Global Climate Change.

"You know... it's Oklahoma," Greenwald said of a state that's not known for its environmentalism. "It's sort of just more evidence that just about every state is doing something."

She said a better and more certain scientific understanding of climate change contributes to the trend, as well as a "popcorn" effect of states feeding off the actions of others.

Oklahoma's bill would require all state agencies to develop energy efficiency and conservation plans.

The bill sets out a timeline for energy cuts: a 10 percent cut in five years, a 20 percent cut in 10 years and a 30 percent reduction in energy use within 15 years.

'We are doing our best'Rep. Guy Liebmann, R-Oklahoma City, said the requirements are extreme. He said departments are doing all they can now - adjusting thermostats and using half as many light bulbs - to save energy. He doesn't see how a 30 percent cut is possible.

"We are doing our best," he said.

David Deming, who has a doctorate in geophysics and is an associate professor at the University of Oklahoma, said the energy efficiency piece of the legislation very well may be a good idea.

But he said technology does not exist to make alternative energy sources cost-effective. He said the state will lose money if the bill is passed.

Deming, a global warming skeptic, also said state agencies making energy cuts could never affect the atmosphere.

"If people think that they are going to make a difference in the earth's climate... by mandating energy efficiency, they're stupid or ignorant," he said.

Bill seeks savingsThe legislation suggests ways agencies could start to comply with its timeline, such as buying energy-efficient appliances, driving hybrid-electric vehicles and buying electric power from cleaner sources such as biofuels, solar, geothermal and wind power.

Kiesel hopes state agencies would save money under the plan.The bill provides for the agencies to enter into a cap-and-trade program run by the Chicago Climate Exchange, a Wall Street-like market where companies buy and sell pollution credits.

Businesses and other groups able to reduce their emissions get paid for doing so; those that emit more than their share have to pay for the right to pollute.

The Chicago Climate Exchange is a voluntary program. President Bush has opposed mandatory caps on emissions, but many large companies are choosing to limit their greenhouse gas emissions on their own, either because they expect federal regulations soon or they want to reduce effects of global warming - and get paid for doing so.

If Kiesel's bill passes, Oklahoma would become the third state government to sell its energy reductions on the Chicago Climate Exchange, according to the Pew Center.

The University of Oklahoma in 2004 became the first public university to participate in the market, which is the only one of its type in North America.

Any revenue made from greenhouse gas trading would go back to the state agencies under the bill, minus 10 percent for bookkeeping.

If the agencies spent less on their energy bills, they would put a quarter of those savings back into the General Revenue Fund of the state treasurer. The rest - 75 percent - would be kept by the agency.



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