Image source: ENS

The campaign against 11 proposed dirty coal-fired power plants in Texas ended with the announcement of the buyout of utility giant TXU and a deal with environmental groups.Two private equity firms, Kohlberg Kravis Roberts & Company and Texas Pacific Group, will purchase TXU for $32 billion. Part of the deal included scrapping the plans for 8 plants, and increased efforts toward emission reductions.

TXU’s stock had been dropping steadily since the grassroots effort to stop the proposed power plants, led by Environmental Defense and backed by governments, politicians and citizens statewide and across the nation. The opposition has been going strong since utility giant TXU announced their grand coal plans last April.

One could argue the turning point came just a few weeks ago when Environmental Defense began running television ads in Texas markets calling out TXU for their 11 plant proposal.

The ad is reminicent of negative campaign ads that run during political season. It gets straight to the point, making claims against TXU for raising prices to increase profit margins and lays out the potential polluting effects that the proposed 11 dirty coal plants will have. The screen is filled with smoke stacks spewing dirty pollution. The call to action is clear: Stop TXU from building more plants.

The ads worked and elicited a response from TXU to Environmental Defense. They took issue with nearly every statement against TXU in the ad, and responded accordingly. In the letter TXU accused Environmental Defense as spreading information that was misleading, and requested that the ads be removed.

Environmental Defense wrote back and said they would not stop running their ads and that all the claims they made in the ad against TXU were consistent with statements they’ve made publicly for months.

Fast forward ten days later. Feb 26. Environmental Defense has declared a victory in the TXU campaign with the announcement of the TXU buyout. Along with the Natural Resources Defense Council, and Goldman Sachs, Environmental Defense worked out an agreement with the private equity firms.

In addition to withdrawing permit applications for eight proposed coal plants, Texas Pacific Group and KKR have agreed to:

• Terminate TXU’s previous plans to expand coal operations in other states
• Endorse the U.S. Climate Action Partnership (US CAP) platform, including the call for a mandatory federal cap on carbon emissions
• Reduce the company’s carbon emissions to 1990 levels by 2020
• Promote Demand-Side Management programs to reduce energy consumption
• Double the company’s expenditures on energy efficiency measures
• Double the company’s purchase of wind power
• Honor TXU’s agreement to reduce criteria pollutants in Texas by 20% (TXU’s 20% pledge was contingent upon approval of all 11 plants)
• Establish a Sustainable Energy Advisory Board, on which Environmental Defense regional director Jim Marston will serve

However, not everyone is celebrating the news. A Dallas Morning News article points out that the fight is long from over.

[The buyout] doesn’t resolve the fundamental environmental problems that made the huge fleet of proposed coal plants so controversial across the state and the nation. Solving those would require a longer effort to make basic changes in how Texas deals with energy and the environment.

Texas will still be the largest emitter of GHG, and the deal might make it harder to fight ongoing battles with existing plants and permits in other areas.

Local battles over the three remaining new TXU coal plants and five others that other companies still could build in Texas will continue as well. In particular, TXU’s proposed two-unit Oak Grove facility in Robertson County is the subject of a permit fight before the Texas Commission on Environmental Quality.

Oak Grove’s two units and a new unit at TXU’s Sandow plant in Milam County are the only ones the company proposed that would burn Texas lignite, the most-polluting form of coal. The others would have burned cleaner Wyoming coal. Opponents said they would continue to fight the Oak Grove permit. But Dallas Mayor Laura Miller, who is leading a coalition of cities against the new TXU plants, said the TXU deal could make it harder to defeat that plant.

As part of the deal, Environmental Defense agreed to drop the lawsuit over the proposed plant at Sandow.

An article in the Houston Chronicle cites skepticism that the deal will actually benefit consumers at all.

Overall, this deal is a win for environmental groups. It demonstrates the power of an effective grassroots campaign and that good things do come when groups like Environmental Defense and the NRDC are at the table in the decision making process.

However, the United States is still clearly lacking in federal emission mitigation policy, which should mandate the cleanest technologies available for new coal plants.

Further reading:
Environmental Defense Press Releases: Feb. 16. Feb. 26 (The letters between TXU and Environmental Defense are also available through those press releases.)
The New York Times
Houston Chronicle
Dallas Morning News

Watch the Environmental Defense ad here