Op-ed: Energy Future Holdings' impressive report card
Dallas Morning News
March 4, 2013
As the Texas Legislature convened earlier this year, state Comptroller Susan Combs reported a big jump in the state’s revenue forecast. She projected, conservatively, $30 billion more in assets compared with the start of the 2011 session. Energy Future Holdings, the former TXU Corp., played an important part in this progress. In 2007, the company made a number of commitments to Texas, and the company made good on every one. It thus was part of the Texas economic revival.
Improved consumer confidence and related spending have figured, to be sure, but the real driver for the unexpected windfall is Texas’ ongoing energy boom. According to Bloomberg, the taxable value of oil produced in Texas surged to $39.1 billion in 2011 from $18.4 billion in 2009, while oil and natural-gas drilling rigs more than doubled by mid-2012 compared with two years earlier. The industry’s workforce climbed 9.2 percent during the same period. And, in contrast to prior “boom and bust” cycles, the data suggests that current growth will be sustainable over the long term.
From my post as chairman of EFH’s Sustainable Energy Advisory Board, these flush times present an opportunity for reflection. Five years ago, EFH was acquired by an investing group that believed in the long-term trends driving growth in the Texas energy market and made a $45 billion investment to back it up. What neither those investors, nor anyone else, foresaw was the shale boom that has seen natural gas plummet from $8.54/MMBtu to somewhere in the mid-$3 range today.
One might think — and press coverage would lead one to assume — that the debt accumulated as part of the transaction has hobbled EFH. But it simply isn’t true.
At the time of the 2007 transaction, EFH’s new ownership identified 28 specific commitments over a fiveyear period aimed at providing a more affordable, more reliable, more environmentally friendly and more sustainable supply of energy to citizens. The sustainable energy board’s job was to ensure the company honored these commitments, and we worked together, a diverse group, to hold the EFH leadership team accountable. Some of the commitments were a tall order — especially given the industry and macro-economic challenges.
A $150 million, five-year commitment to low-income customer assistance.
A 15 percent retail price cut for approximately 1 million TXU Energy retail customers, even as the company has invested $100 million over five years in new tools to help consumers manage their electricity usage.
Strong environmental policies, including a $400 million investment in energy efficiency, support for development of alternative energy, doubling wind-energy purchases and corporate policies tied to climate stewardship.
This is but a snapshot of the “scorecard” that has consumed much of my advisory board’s work over the past five years. I encourage all residents of Texas, and other interested stakeholders, to review the full results at energyfutureholdings.com. It bears mentioning EFH has also invested more than $10 billion in capital expenditures while adding more than 1,900 new jobs since 2007 — both achievements that went beyond anything required in the 2007 commitments.
Texans should be reassured that EFH’s oft-discussed debt challenges have had no impact on the company’s ability to continue operating at the highest level, producing and delivering safe and reliable power to the state’s economy, workers, customers and communities. This company and its predecessors have been providing power to Texans for more than 100 years, and it will continue to do so.
On behalf of the Sustainable Energy Advisory Board, I am pleased that EFH fulfilled its promises to “keep the lights on” — and then some — for Texans, despite obvious headwinds. The board and I monitored its progress for five years, through some very anxious and challenging times, and I am delighted to report: job well done.
William Reilly, chairman emeritus of the World Wildlife Fund and EPA administrator from 1989 through 1993, is an Energy Future Holdings board member and chairman of EFH’s Sustainable Energy Advisory Board.