Guest blogger Jim Marston is an attorney, and the Director of the Energy Program in the Texas Office of Environmental Defense.
Who would have thought that, almost a month to the day after the USCAP initiative was announced, coal-enamored TXU would come on board? But today's big news is victory in Texas, thanks to an unusual buyout agreement.
The firms buying TXU – Texas Pacific Group and Kohlbert Kravis Roberts & Co (KKR) – reached an agreement with Environmental Defense and the Natural Resources Defense Council to significantly scale back TXU's coal plant building plan, and adhere to a strict set of environmental standards:
- 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 I will serve.
The wheels started turning on this landmark agreement less than two weeks ago, when Environmental Defense president Fred Krupp received a phone call from former E.P.A. administrator William K. Reilly, who is advising Texas Pacific Group. Fred sent me to California to manage the negotiations for Environmental Defense.
This is a sweet victory after our bitter 10-month battle to stop TXU. It's also a landmark event in the effort to stop global warming. This will not only be the biggest leveraged buyout ever, it is the only buyout in history made contingent on the approval of environmental groups.
News of the TXU buyout and its commitment to environmental measures is all over the news – including the blogosphere. Our favorite comment so far comes from David Roberts on Gristmill:
Who did the equity firms approach about making the project environmentally acceptable? NRDC and Environmental Defense. Green groups like these get grief from hardcore enviros because they work closely with business and favor market-based solutions. They get grief from the Reaper crowd because they're stodgy and technocratic and not hip to the new Apollo Alliance-style "framing." But who's making things happen?
I don't think of myself as stodgy, but I'll take the compliment!