HOUSTON — Dallas-based Energy Future Holdings is hovering on the brink of bankruptcy. But should it tumble, the lights will continue to shine for Houston customers.
Ballooning debt of more than $40 billion could push the Texas power company into bankruptcy restructuring, but it would allow the company to keep its operations intact, according to Allan Koenig, vice president of corporate communications for Energy Future Holdings. That includes its retail branch, TXU Energy, which is a major power provider to residents across Houston and the state.
“Any potential bankruptcy filing would be a reorganization of our debt, not our operations,” Koenig said. “There would be zero change to TXU customers in the event of a bankruptcy filing.”
The bankruptcy would be one of the largest non-financial corporate bankruptcies in the U.S. since the 1980s, according to Moody’s — a list that also includes Enron, WorldCom and Chrysler. It would be structured as a Chapter 11 bankruptcy, in which the debt is restructured but the company continues its normal operations. The holding company is estimated to have more than $41 billion in debt on its books.
Energy Future Holdings owns a range of assets, including several nuclear energy and coal-fired power plants through its Luminant division and a power transmission business through Oncor Electric Delivery.
But the course of the bankruptcy could force an evaluation of some of the power generation assets, according to Jim Hempstead, an analyst with Moody’s.
“All of the Luminant assets are going to get scrutinized as to what is economical and what is not,” Hempstead said. “There may be a plant or two that is shut down or mothballed or otherwise taken out of the stack.”
The company was formed in 2009 through a Wall Street consortium deal that included Goldman Sachs, KKR and TPG Capital. The group paid $45 billion for what is now known as Energy Future Holdings, banking that the then high price of natural gas would continue to rise, ensuring a profit. Instead, the rise of shale gas plays helped gut natural gas prices, leaving the company with a crippling debt level.
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14 ways to slim your power bill this summer
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Angle blinds up: TXU Energy says that angling horizontal blinds so sunlight streams up can reduce the heat coming in and provide free natural light. When closed and lowered, highly reflective blinds can reduce heat gain by around 45 percent.
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Insulate lights: Canned or recessed lights can be a big source of air leaks. Selecting “IC” (insulation contact) models or installing approved covers over non-IC models can stop that.
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Use a fan: You can raise your thermostat setting by up to 4 degrees and not feel a difference if you also run a ceiling fan. Fans only make you feel cooler, though, so turn them off when you’re not in the room.
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Lower humidity: It takes longer to cool a humid home. The ideal humidity level is less than 60 percent in the summer.
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Moderate the thermostat: Lowering your thermostat setting does not cool your home more quickly. Many factors affect how quickly an indoor space cools. Thermostat set points are not among them.
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Check your water heater: Water heaters are factory set at 140 degrees. Lowering that to 120 degrees provides comfortably hot water and less energy consumption.
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Use a programmable thermostat: Most Americans with programmable thermostats don’t program them. New Energy Star® ratings for programmable thermostats may consider ease of use and online access.
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Seal your windows: If you want to save money this summer, you should start by looking for the places where you are losing money. Gaps between windows and doors are some of the most likely spots for energy loss.
Michael Paulsen / Houston Chronicle
Get the right A/C unit: Air conditioners are designed for specific sizes, and you can waste energy by having one too big or too small. You should make sure your unit is right for your home.
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Switch your light bulbs: You can save money by switching out old incandescent light bulbs for compact fluorescent bulbs. The modern light bulbs, which do have a different glow, can save you money on your electric bill.
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Change your air filter: A dirty air filter can make your air conditioner be less efficient, and it can ultimately cost you money on your electric bill.
Fitz Villafuerte / Flickr
Turn off lights: Many people forget to turn off lights and fans after leaving a room. By turning them off, you can save yourself some money on that electric bill.
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Buy energy-efficient appliances: They may cost more at the store, but energy-efficient appliances can save you money on your electric bill.
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Unplug unused appliances: You can save money by unplugging phone chargers or other kitchen appliances when they aren't in use.