KKR & Texas Pacific reaffirm TXU Electric delivery commitments

by PegNews wire

DALLAS — Texas Energy Future Holdings Limited Partnership -- the holding company formed by Kohlberg Kravis Roberts & Co. (KKR), Texas Pacific Group (TPG) and other investors to acquire TXU Corp. -- today issued a statement to clarify the impact of the consummation of the transaction at TXU Electric Delivery, TXU's regulated transmission and distribution business.

"Here are the facts. There will be no new debt at TXU Electric Delivery to fund this transaction. There is no basis for rates at TXU Electric Delivery to increase as a result of the transaction. In fact, the Texas Public Utility Commission will continue to have complete authority over TXU Electric Delivery rates," stated Michael MacDougall of TPG.

"Under the current regulatory system, we have committed to hold a majority of our ownership interest in TXU for more than five years," said Fred Goltz of KKR. "We have no intention to spin-off or sell any of the businesses. Upon completion of the transaction, we will create three separate and distinct businesses for the generation, transmission and distribution, and retail entities. This will better position each business to focus on the unique customers that it serves. The competitive generation and retail businesses can comfortably support the debt related to the transaction."

Although all three of the TXU businesses will remain in the Dallas/Fort Worth area, they will have distinct names and separate management teams, headquarters, and boards of directors.

* Generation: Luminant Energy will be the new company name, reflecting its new direction and encompassing TXU's power, wholesale, development, and construction businesses

* Transmission and Distribution: TXU Electric Delivery will be renamed Oncor Electric Delivery

* Retail: TXU Energy will retain use of its name for the retail business

Source: Texas Energy Future Holdings Limited Partnership