Feb. 26 - Environmentalists win three big battles in TXU coal fight, but concerns remain

Statement of Tom “Smitty” Smith, Director of Public Citizen’s Texas Office

Environmentalists have won three big battles in the Texas coal wars, but the struggle is far from over. Last week a Travis County district judge declared that Governor Rick Perry did not have the constitutional authority to fast-track decisions on coal plants. The next day the hearing officers gave the opponents of these plants an additional four months to prepare their cases.   

TXU’s subsequent decision not to build eight new plants and to help work toward global warming emissions caps is a huge victory, but the company is still planning to build the Oak Grove and Sandow plants, the three dirtiest plants in its proposal.

In addition, eight other plants have been proposed by other companies. We predict that they will now move their applications into the hearing stage, and the coal wars will continue.  

The stunning decision by the consortium of TXU’s buyers to join the fight for global warming legislation shows the risk of proceeding on permitting without recognizing global warming in permits, and its commitment to reduce emissions to 1990 levels by 2020 sets a strong precedent.

These battlefield victories have allowed time for the Legislature to step in and act. We urge them to:

• pass a two-year moratorium on permitting new plants (Ellis SB 860);
• develop a power plant oversight and permitting process (Fraser SB 484);
• develop strong energy efficiency legislation that would cut growth in demand for electricity by 50 percent (Anchia HB 269);
• toughen the state’s building codes, adopt appliance efficiency standards and require state agencies to save energy (Averitt SB12); and
• invest in newer, cleaner technologies (being proposed by Fraser, Anderson and others).

These battles would not have been won without the hundreds of Texas families who had the courage to stand up for the rights of Texans to breathe clean and safe air, and the cities, counties, school districts and business leaders who have joined the fight. 

We still have the following concerns about the deal:

• Will this mean that the company will move forward on its six proposed nuclear plants?
• What will the deal mean to consumer prices? While the company promises a 10 percent reduction in prices, we think that the prices they are charging are about 30 percent above the prices charged by the neighboring co-ops and municipal utilities that buy the same energy.
• If the company buys TXU at the proposed price and then flips it in several years, the increased costs will have to be passed on to consumers. Regulators in Oregon and Arizona have recently blocked these types of leveraged buyouts because of these concerns.

In light of these questions, we urge the Texas Legislature to authorize the Public Utility Commission to review the buyout to assure that it will really benefit consumers.

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