Stanley Feld M.D. FACP, MACE
Is the KKR and Texas Pacific Group leverage buyout good for North Texas? In order to make peace with public protest, the buyout team pledged not to ask for permits to build 11 Dirty Coal Burning Plants. They only want to build three (3). The permit to build the plant in Savoy, Texas will be withdrawn.
Late Saturday, February 24, 2007, KKR and Texas Pacific Group announced a $43 billion dollar leveraged buyout of TXU. The TXU board approved the buyout on Sunday.
How come so fast? According to the New York Times KKR, through Goldman Sachs, helped broker a peace with the environmental groups, and to get the environmental groups support for the transaction. If this is not a trick play on the part of TXU, KKR and Goldman Sachs, it represents a victory for the air quality in Texas. The new TXU is going to withdraw 7 of their 11 requests for permits for Dirty Coal Plants from the Texas Commission for Environmental Quality.
Grayson and Fannin counties just north of the Dallas Metroplex are the environmentally least polluted area of a very abused and polluted State of Texas.The building permit for the Valley Plant in Savoy, Texas has been promised not to be requested. This will not only keep Texomaland clean from coal pollution but save North Texas’ beautiful Lake Texoma from Mercury contamination. It will give Dallas and Ft. Worth a chance to achieve EPA attainment by 2010.
I have discussed the faulty Texas political system in the past. There seems to be an outright disregard for the health of Texans by our Governor Rick Perry and his probable unconstitutional support of the fast track permitting process.
Incidentally, I think Governor Rick Perry wants to run for Vice President in 2008 with the Republican candidate. I think the Republicans would be making a great mistake. He has, in my opinion, little common sense. He also says one thing and does another. He has ignored the will of the people on many occasions. The coal plant issue is only one of many faulty decisions that Governor Rick Perry has made.
There are many heroes in this effort to change TXU’s mind on the Dirty Coal Burning Plants. Listing the heroes would take pages. Only the uproar of the people (free speech), and the ability to educate the public saved the North Texas area from the health toxins Mercury, NOX, SO2, and Ozone and Particulate Matter. These toxins result in at least $34 billion of avoidable healthcare costs. Public protest was achieved through local meetings, internet connectivity, the blogosphere, and local and national media coverage.
It is my impression that the governor supported and fast tracked the process for less than noble reasons, The Texas legislature did not seem to want to get involved. Only through pressure by the uproar of the people did legislator timidly start signing on after only one state legislator made the protest proposal. Our national representatives did not say a word in defense of the people they represent and the people’s desire to have clean air in Texas.
I hope the lawyers that are working for CORE, SEED, and Environmental Defense are not blind sided by KKR. KKR is not the most benign leveraged buyout firm on the planet. I bet they bought TXU for a fraction of TXU’s real value just as they bought HCA for a fraction of its real value. In my opinion the reason KKR could buy TXU so cheaply is that public opinion made TXU public enemy number one. The public drove the price of the stock down making TXU a bargain at $43 billion dollars. I imagine the stock holders are relieved to get rid of their stock at the price KKR is paying.
I think we should not be thrilled that the State of Texas will only be getting 3 Dirty Coal Burning Plants. I think if there are going to be any Coal Plants, they should be Gasification Plants that reduce emissions drastically and are fitted with devices that also capture Carbon Dioxide. Carbon dioxide is the cause of global warming. It is a compound presently not required to be measured or regulated by EPA rules.
I have also noticed that in KKR and the new TXU’s discussions, the main immediate health dangers to the people of Texas are being ignored. The immediate danger is the health hazard of coal with Mercury emissions, Sulfur Dioxide, Nitrogen Oxides, Particulate Matter, and Ozone. The diseases resulting from Mercury are Autism, Attention Deficit Syndrome and Learning Disorder for Mercury at a societal cost of 100 billion dollars a year. Asthma, Chronic Obstructive Lung Disease (COPD), Heart disease for Nitrogen, Sulfur, and Ozone generate illness that cost the healthcare system $34 billion dollar a year aside from all human cost of morbidity and premature mortality. These costs are avoidable by not burning coal. Toxins not even mentioned or measured are uranium emission, dioxins and furans.
What am I nervous about? TXU will not longer be a public company. Therefore the public will not longer have any leverage over the stock price. There will be no chance for possible input by stockholders to the management. KKR and TXU can essentially do anything they want including raising electric prices or selling off our polluting electricity production on the national grid to others.
One friend called the leveraged buyout “eye wash.” It makes you feel better but does not cure the disease. It did not solve our problem of the disregard of our government for the public sentiment. Its’ lack of concern for the public’s health is astonishing to me. The present resolution of the immediate problem has simply made us feel better for the time being.
I am totally against government regulations and increased government bureaucracy. However, in order for the public to be protected, we might need electric power production to be regulated again in Texas, if TXU continues to abuse its’ power in the production of electricity.
We are all looking forward to the new TXU being the good neighbor they have claimed to be in the past. TXU investing in renewable energy for Texas would be a good start. We have plenty of wind and sun in Texas. They could also consider pricing it fairly if they want to earn the designation of a good neighbor.
My warning is watch out! This could be a trick play by TXU and KKR!