Wall Street Financiers Scrap Proposed TXU Coal Binge
Some environmentally enlightened Wall Street heavy hitters stepped up to the plate last week to take a crack at reducing carbon dioxide emissions by buying out an ailing Texas-based utility, TXU. The company had been intent on building 11 new coal-fired power plants across Texas in the coming years. The new investors, Kohlberg Kravis Roberts & Co. and Texas Pacific Group, say that after consulting with an ad hoc group of environmentalists they will scuttle plans for all but three of the new proposed plants. Coal-burning power plants account for about 40 percent of total U.S. carbon dioxide emissions in the U.S. The new company will make up for the prospective loss of future supply by encouraging customers to reduce demand through energy efficiency upgrades.
According to the terms of the deal, which is known in the financial industry as a leveraged buy-out, the new version of TXU will also support a mandatory nationwide limit on greenhouse gas emissions paired with a market-based emissions trading system, and will join the recently formed U.S. Climate Action Partnership, a diverse group of American corporations (such as Alcoa, Duke Energy and Lehman Brothers) and environmental groups allied in efforts to lobby for strong national emissions reduction legislation. The nonprofit Environmental Defense and other environmental groups helped craft the deal between TXU and its new investors.
In related news, influential NASA climate scientist James Hansen, who has been publicly talking up the threat of human-induced global warming since the late "80s, called on federal and state governments to consider a moratorium on the construction of new coal-fired power plants. According to Hansen, such a move would do far more to stave off global warming than upping emissions standards for automobiles. Existing coal-burning power plants in the U.S. spew 2.5 billion tons of carbon dioxide into the atmosphere every year, while America’s total automobile fleet is the second-largest contributor at 1.5 tons.
Sources: Environmental Defense; chron.com