In yesterday's item, we covered the reaction of environmentalists to news of the acquisition of TXU Corp. by a group of prominent Wall Street firms. Today, we'll outline some of the promises made by the potential new leadership of TXU to create future energy supplies from more environmentally friendly resources and see what an industry insider thinks of those pledges.
In announcing the transaction on Monday, TXU said that it will make significant investments in alternative energy, as well as implement an aggressive demand reduction program to become a leader in conservation and energy efficiency. It said the company will reduce its own carbon emissions by increasing efficiency of its generating facilities by up to 2 percent. And it promised to 'become a leader in providing electricity from renewable sources' by more than doubling its purchase of wind power to more than 1500 megawatts, 'maintaining its status as the largest buyer of wind power in Texas'. TXU also mentioned that it will promote the use of solar power through solar/photovoltaic rebates to consumers.
Whether these plans will come close to matching the future needs of TXU's customers is unclear at present. Certainly, the involvement of state officials, from the governor on down to regulators, is a promising sign that sufficient planning has been done to satisfy future reliability concerns.
Here's what one industry analysts is making of the whole TXU proposition. Nick Lenssen, practice director of Renewable Energy Strategies at Energy Insights, a publisher of power industry research and analysis, said the purchase of TXU clearly demonstrates that climate change has become a central issue within the electric power industry in the United States, but that "it also conveniently provided TXU an escape strategy for its ill-fated plan to build 11 new coal plants in Texas, a plan that was confronted with strong opposition from local Texan governments and advocacy groups, as well as Wall Street."
"TXU has made a number of pledges to push for greenhouse gas reducing policies, investment in energy efficiency programs, and purchase more renewable energy, but the company's planned efforts pale to those from some of its peers and should be seen more as a means to obtain regulatory and stakeholder approval for the proposed acquisition rather than a sea-change in company vision.
"The proposed acquisition of TXU and the environmental agreement behind it is clearly a step forward in favor of greenhouse-gas limiting policies and renewable energy, but there's still room for ample improvement. The bottom line is, despite the promises, what occurs upon the completed transaction will be telling as to the company's future."
As usual, we'll have to wait to see if these good faith statements by TXU and its prospective new owners will, indeed, live up to their intentions to do the right thing for customers, investors, and the environment. In the meantime, we'll most likely remain guilty of the human trait of suspicion, wondering whether the words of the old song are more appropriate: "meet the new boss, same as the old boss."