Memphis Who wants to read another story about Wall Street hustlers and the funny money going south and then jumping through more hoops to try to save their butts in bankruptcy court? Well in this case the answer is “Me!” when it comes to the wheeling-and-dealing involving TXU, the struggling Texas power company.
The bottom line is that the Wall Street folks that took TXU from being a major power company in Texas to being a financial plaything are trying to go to bankruptcy court in order to get rid of $32 billion worth of debt while managing to continue to hold ownership of the outfit. The gang of KKR, TPG, Goldman Sachs and others are trying to bail themselves out of a disaster they made of the Texas utility operations on a bad bet that presumed natural gas prices would go up and that they would get away with charging more for electricity.
This is one of those, “I told you so” moments, since ACORN in Texas had been pretty much all alone with precious few friends in opposing this crazy merger in the first place since we were arguing that we, as Texas utility bill payers were going to end up paying for this craziness. Stacked against us on the other side, if you have a long memory, were a lot of big time environmentalists, like the Natural Resource Defense Council and the like who were lined up for this wild buyout for a couple of reasons.
The buyers, included Bill Bondurant, who was on the board and a donor to some of the enviro national groups, and a mega-rich principal of TPG. To get the environmentalists on their side they promised that if they made it through the Texas regulatory process with their help, they would shelve plans to build some of the coal fired plants that had been on TXU’s wish list. I say “wish list,” because it was obvious to us, and I would have thought the DC enviro honchos, that the offer to not build some of the new plants was gratuitous anyway. They didn’t have the money and they didn’t have the demand. Regardless in 2007 as this deal was red hot, Texas ACORN was busing folks into Austin to protest its approval while the enviros were cutting the backroom deals in DC with the Wall Streeters, all of which were premised on us paying the bills at the end of the day. We won some delays, but we were steamrolled.
What goes around comes around, and they lost their shirts. There’s some justice there, but somehow I’m not sure that Texas utility consumers won’t still end up paying for this big time.