Consultant Roger Gale concludes that the TXU leveraged buyout does not provide inherent or long-term advantages to the customer.
Richard Stavros is executive editor of Public Utilities Fortnightly.
Just when everyone thought the dust had cleared on the highly contentious leveraged buyout of TXU by Kohlberg Kravis Roberts and Co. (KKR), new challenges have sprung up from the most unexpected place.
The publisher of the Dallas Morning News retained consulting firm GF Energy LLC, led by Roger W. Gale, to produce an independent assessment of the consumer impact from the proposed private-equity buyout of TXU. In late June, the newspaper ran a three-part series highlighting the report’s conclusions, as well as responding to reader feedback. (The report and the news coverage of the report can be found at www.dallasnews.com/investigativereports/txu/.) This may come as a surprise to many industry watchers who believed the deal was as good as done, and therefore likely exempt from continued criticism. But given the deal’s importance to the Texas economy, the newspaper felt an independent analysis of the deal was needed. The paper had conducted a similar investigation several years ago into how well Dallas city government was serving its citizens.