TIn the infant days of television, Reddy Kilowatt, an animated stick figure, sang about the merits of electricity. Reddy is needed again to instill trust in Texas power and electricity.
As he pranced, danced and sang his way across the screen, he made our parents and grandparents aware of the merits of the bountiful energy at affordable prices.
Reddy has let us down in recent years as we all hesitate plugging in that hair dryer or letting our televisions stay on overnight.
And now, we could be having even worse news.
Dallas-based power company TXU could be facing a makeover if the largest buyout bid this country has seen is approved.
But what we do not yet know is what this buyout could mean in terms of cost to our households.
When we plug in that appliance, will we face a huge percentage increase in our already high utility bills?
For a bit of background information, two of the nation’s largest private equity firms announced recently the execution of an agreement among TXU and Kohlberg Kravis Roberts and Texas Pacific Group. The agreement is basically a $45 billion decision.
After a lot of news items about the buyout, we consumers are still wondering about the bottom line.
Can we afford what is to come from the new company?
Texas Energy Future Holdings Limited Partnership, the holding company formed by KKR, TPG and other investors to acquire TXU Corp., issued a statement that has reduced some of our anxiety.
Michael MacDougall of TPG said earlier this month, “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.”
The three TXU spin-off businesses from the merger will remain in the Dallas/Fort Worth area and will have different names, management teams, headquarters and boards of directors.
So, at this point we are being told the new energy company is “committed to delivering price cuts and price protection benefits to electric customers, strengthen environmental policies and make significant investments in alternative energy, conservation and efficiency measures to ensure the reliability and sustainability of Texas’ power supply.”
So, the 2.1 million customers in the state, according to the release, will receive a 10 percent discount in price, which will amount to $300 million in annual savings.
For the average customer, this price decrease includes an initial 6 percent reduction within the month and an additional 4 percent reduction at the end of the transaction.
We are not quite ready to thank the new company for its discounts until Reddy Kilowatt jumps out to inform a new generation of electric customers that power is plentiful and affordable.
Until then, do not leave that television running overnight.
