Fred Goltz, a partner with investor Kohlberg Kravis Roberts & Co., told state lawmakers today the investors weren’t planing on flipping TXU to other buyers for a quick profit.
“Clearly we’ve listened to your concern on that point,” Goltz said to concerns from Rep. Sylvester Turner during a hearing of the House Regulated Industries Committee. “In the current regulatory system we are prepared to hold onto our investment in TXU for five years.”
Turner and other lawmakers say they’re concerned KKR and Texas Pacific Group will buy and sell TXU in relatively short order at a big profit. KKR, TPG and other investors purchased Texas Genco, a collection of Houston-area power plants that were part of the old Houston Light & Power, for about $3.7 billion in July 2004. In October 2005 the plants were then sold to Princeton, NJ-based NRG Energy for about $5.8 billion.
Goltz said the five-year promise is based on the current regulatory scheme in Texas, but he is saying he’s not so sure the deal would occur if the legislature passed bills that have been filed to roll back deregulation.