Group promises to provide data for review by regulators
Two prominent investors behind the proposed sale of TXU appealed to legislators Tuesday not to intervene in the deal, promising to file paperwork with utility regulators earlier than required by state law. Henry Kravis and David Bonderman made the pledge to a House committee in a bid to stop a bill passed by the Senate last week that would place the transaction before the Public Utility Commission for review.
"Transparency is important," said Bonderman, co-founder of Texas Pacific Group, an investment firm based in Fort Worth. He said the report would be filed by April 25.
Under Texas law, the report is not required to be filed until up to 30 days after the transaction closes.
"This voluntary filing will allow the PUC to conduct a full review of the transaction as it relates to the electric utility," Bonderman said. "It will allow those with an interest in asking questions about the transaction to have a forum in which to do so."
Kravis is a co-founder of the investment firm of Kohlberg Kravis Roberts & Co. Also attending the House Regulated Industries Committee meeting were four prominent men who have agreed to serve on the board of directors of the new company: Don Evans, former U.S. Secretary of Commerce; James Huffines, chairman of Plains National Bank Central Region; Lyndon Olson, a former ambassador to Sweden; and William Reilly, former administrator of the U.S. Environmental Protection Agency.
Rep. Sylvester Turner, sponsor of the House bill to require commission review, said he's concerned about the effect on customers as the utility goes from a public company to privately held. The Houston Democrat said that while the proposed board members are well-known, he'd like to "take the emphasis off personalities and keep it on policies."
Kravis said the investment firms entered into the sale understanding what the rules were, and that it would not be fair to change them now.
"You cannot change the rules midstream. What kind of message does that send to other companies that are thinking of relocating to Texas?" he asked.
The committee chairman, Phil King, R-Weatherford, said Turner's bill will get a hearing but he's undecided about requiring commission review. He said he wants to know whether the utility commissioners would measure a proposed deal by the public interest or another standard, and what authority they would have to make adjustments or disapprove a buyout.
The $32 billion sale would be the largest ever in the U.S. and has been backed by environmental groups because KKR would cancel plans to build eight of 11 new coal-fired plants.
The committee also voted to send three bills on electricity to the full House. House Bill 1189 would penalize companies that sign up new customers in areas outside their traditional markets or fail to switch customers to lower rate plans; House Bill 1190 would prevent a company from controlling more than 20 percent of the wholesale market; and House Bill 1386 would set up a trust fund to pay for the disposal of spent nuclear fuel rods. Chron
