The TXU deal involved the 2007 canceling of 8 of TXU's planned 11 Texas coal-fired power plants for the state. TXU was a Dallas-based energy company involved in electricity generation, distribution, and sales in Texas, and is now Luminant. The Environmental Defense Fund and Natural Resources Defense Council helped broker a deal for the plant closures, but the struggle was kick-started by Texas mayors and was greatly aided by several law firms - many working pro bono - to challenge the coal plant permits.
Texas mayors organize against proposed plants
In 2006, the "Texas Cities for Clean Air Coalition," a group of mayors representing 17 Texas cities and led by Dallas Mayor Laura Miller and Houston Mayor Bill White, held a press conference announcing their intention to fight proposed coal plants. The Texas Commission on Environmental Quality was reviewing permit requests for 17 new coal-fired plants proposed to be built in Texas by seven different utility companies. Dallas-based TXU Corp. was proposing 11 of those. The coalition of Texas cities challenged the permit applications.
Most of the proposed coal plants were in East and Central Texas, near Dallas-Fort Worth. It was predicted they could add tons of pollution annually to North Texas, which is already below federal clean air standards in the area. Texas Cities for Clean Air Coalition estimated the new plants each year would spew: 30,000 tons of smog-producing nitrogen oxide, or NOx; more than 115 million tons of carbon dioxide, or CO2, which contributes to global warming; and nearly 4,000 pounds of toxic mercury. Cities making up the coalition were Arlington, Cedar Hill, Coppell, Dallas, DeSoto, Duncanville, El Paso, Fort Worth, Frisco, Hillsboro, Houston, Irving, Lancaster, McKinney, Plano, Rockwall, and Wylie.
Buy out of TXU
In February 2007, following the announcement of the proposed buyout of TXU by two private equity firms - [Kohlberg Kravis Roberts & Co.]] (KKR) and Texas Pacific Group (registered under TPG Capital LP) - and citing a new environmental direction for the company, TXU announced that it would withdraw applications for all eight of the coal units that the coalition opposed.
TXU also announced its acquisition by an investor group led by Luminant. According to the New York Times, as part of the estimated US$45 million buyout of TXU, new owner Luminant settled a series of lawsuits with Environmental Defense and the Natural Resources Defense Council and agreed to cancel 8 of its planned 11 new Texas coal-fired power plants as well as several new coal-fired plants in Pennsylvania and Virginia, back federal legislation to create a cap-and-trade system regulating CO2 emissions, and double spending on energy efficiency. In return, Environmental Defense and NRDC agreed not to campaign against TXU’s remaining three Texas coal-fired plants.
Documentary about the deal
The documentary film "Fighting Goliath: The Texas Coal Wars," produced by Robert Redford, tells the story of how 2006 Dallas Mayor Laura Miller began the fight against construction of the 18 coal-fire plants in Texas, rallying fellow mayors across the state to the cause. In response to the film, Energy Future Holdings said the desire to build the plants happened under former TXU ownership. Under new ownership, the company said "it has made a voluntary commitment to fully offset emissions from the three units it is building now and to further reduce key emissions by 20 percent across its existing coal plants."
Attorney Stephen Susman on the lawsuit
In an interview about the TXU lawsuit on Democracy Now, attorney Stephen Susman who worked on the TXU lawsuit pro bono as part of Susman Godfrey LLP, said: "Never before in history had the Texas cities or municipalities organized themselves together, but because the federal government does nothing, because the state government does nothing, that was the last resort. I said I’d do it. It was a real case.
"So, we went into this case. We spent a lot of—I had a lot of lawyers from my firm, my partners, working on it. And it was a huge fight. We had about—we spent $700,000 in expert expenses. These things are expensive. We had eleven experts.
"One of the big adverse effects of all these plants would have been they would have put hundreds of millions of tons of carbon dioxide in the atmosphere. And in fact, they would have undone all of the good that would have been done by the state of California. The governor announced that by 2012 they were going to reduce the carbon dioxide emissions by 20 percent or something like that. Texas would have offset all of that. Texas would have put itself in like as much as in the top three or four countries in the world—it’s only a state, but it would have been up there in the top three or four countries—in the terms of carbon dioxide. So, we were opposing it.
"Now, we were met with the claim that, well, carbon dioxide is not a pollutant, it doesn’t harm anyone, and so you can’t account—take account of that. Well, that was the big argument. We succeeded in getting discovery on that. What we were basically proving is—they claim, well, we need additional electric generation. We said, fine, you may need it, but you don’t need eleven plants all built at once. This was an effort to have old technology grandfathered.
"And we found in TXU files the most incredible documents, where they were advised: pollute now, because if you put—the more you put up there in the atmosphere—caps are coming, and when the caps are imposed, you will be grandfathered, so the more you put up now, the better you will be when regulation finally comes. I mean, just incredible sinister kind of documents.
"Well, I think, as the case was heated up, we were beginning the trial before the regulatory body, when TXU was acquired by KKR, Texas Pacific Group, and they announced that they were dropping their permits for all eleven plants. So we were successful. The plants are not being built."
Articles and Resources
- "Ushering in a New Era for Coal: EDF helps set new environmental precedents for coal plants in Texas" EDF Website, March 2, 2007.
- "Record TXU Buyout Includes Unprecedented Global Warming, Emissions Plan" NRDC, February 24, 2007.
- "Climate Change" Susman Godfrey, May 26, 2010.
- "Clean Air Group Names Legal Team." Dallas Business Journal, August 31, 2006.
- "TXU to Set New Direction As Private Company", press release, February 26, 2007.
- "TXU Halts Efforts To Obtain Permits for Eight Coal-Fueled Units", press release, March 1, 2007.
- A Buyout Deal That Has Many Shades of Green, New York Times, February 26, 2007.
- "Luminant Name Adopted for TXU Corp.’s Power Generation and Related Businesses", press release, July 10, 2007.
- Jay Gormley, "Film Highlights Former Mayor Miller's Coal Fight: Robert Redford Narrates 30-Minute Documentary" Channel 11 News, January 10, 2008.
- "'Global Disruption' More Accurately Describes Climate Change, Not "Global Warming"–Leading Scientist John Holdren" Democracy Now!, July 03, 2008.