By Charles O’Neal
Energy Future Holdings has filed for Chapter 11 bankruptcy protection, which inevitably creates some questions. But I’m happy to report one area of steadfast certainty: The lights have stayed on.
It seems obvious that they would, but some critics – of the company and the industry as a whole – had expressed doubts.
Those critics act as if the original investors are getting their comeuppance after engineering such a large leveraged buy-out back in 2007. To be sure, their bet that natural gas prices would remain high didn’t pan out. No crystal ball-gazers advised that the advent of fracking would bring so much new gas to market that prices would plummet – disastrously for EFH. That those investors are now taking one in the shins makes for a good movie plot, except…
…except, again, the lights have stayed on! Lost in all the doom-and-gloom reporting on EFH’s current financial straits are a set of facts that should make you want to root for the company. First on the list is EFH’s Luminant production has remained reliable. In fact, along the way, Luminant has become more efficient at power production while reducing environmental impacts.
But the big thing about EFH is the giant power company added nearly 2,000 jobs over the past six years and invested billions of dollars in the Texas economy. And as the state’s largest producers and retailers of electricity, EFH companies can legitimately claim a role in the attractiveness of Texas as a relocation and expansion site for major manufacturing and logistics operations, such as Toyota’s recent decision to relocate to Plano.
Depending on whose numbers you use, our state is adding between 350,000 and a half-million new residents each year, most of that growth concentrated in North Texas, Houston/Harris County and the Austin/San Antonio corridor. EFH is meeting the power demands of all these new Texans while committing significant resources to wind and other renewable energy resources. And did I mention that your lights still come on when you flip the switch?
I can state unequivocally that the EFH commitment to its customers has never wavered in the nearly four years I’ve served on the company’s Sustainable Energy Advisory Board. I’ve seen innovation deployed by TXU Energy to increase efficient energy consumption by both residential and commercial customers, and plans that encourage off-peak usage. I’ve seen huge investments in Luminant’s manufacturing infrastructure to meet stringent federal environmental standards. I’ve seen Oncor crews pitch in when natural disasters strike – not just in Texas – while assuring that power delivery to Texas homes and businesses is reliably efficient.
If we’re honest, we’ll acknowledge that no one wants to bet wrong. I can assure you it gets a little more “intense” when you’ve bet $45 billion of investors’ money. No matter how you look at that number it’s a little daunting, and I’m not cavalier enough to dismiss it with the cliché “you win some, you lose some.”
The facts are, though, that Texas residents, Texas’ workforce and the Texas economy are the big winners in EFH’s losing bet. And I’ll bet that whatever is the outcome of this chapter in the EFH story, the thousands of hardworking Texans at Luminant, TXU Energy and Oncor are committed to making sure you don’t read this in the dark.
Charles O’Neal, Lead Consultant for Strategique, a Dallas-based economic development and public policy consulting firm, serves on the EFH Sustainable Energy Advisory Board.