Texas Observer on TXU buyout
On the Texas Observer's blog, Forrest Wilder sounds some further cautions about the TXU buyout:- KKR and the Texas Pacific Group are unlikely to be long-term stewards of Texas' power supply. Private equity firms, which manage enormous pools of capital amassed by institutional investors and the super-rich, rarely hold onto their purchases for long, usually seeking an exit in less than five years.
- They also look for a return on investment of at least 20 percent, a profit that will ultimately be borne by ratepayers.
- In the short-term TXU will remain in private hands, making public scrutiny a whole lot harder. (Previously, TXU was a publicly traded company.)
- The new owners are promising some TXU ratepayers a paltry 10 percent reduction on rates that some consumer advocates say are inflated 30 percent.
Labels: carbon, coal, electricity, energy, global warming, TXU
