Dallas-based TXU, Texas' largest electricity producer with more than 2.3 million customers, has agreed to be sold to private-equity firms in the largest private buyout in U.S. corporate history. An investor group led by Kohlberg Kravis Roberts and Texas Pacific Group is paying about $32 billion and would assume about $13 billion in debt. The buyer group includes Goldman Sachs and three other Wall Street firms. Governor Rick Perry says the sale of TXU includes the utility's previous commitment to a 20 percent reduction in statewide emissions. Perry welcomed what he calls "this investment in emissions reductions, renewable sources and Texas jobs.'' The buyout firms sought support by agreeing to scale back a plan to build 11 new coal-fired power plants that would produce tons of new greenhouse gas emissions. Dave Hawkins with the National Resources Defense Council's climate center says the buyers have been talking with his group and others.
"The decision by the buyers of TXU to reach out to our organization and Environmental Defense, you know, reflects a conclusion by the business community that they simply can't ignore global warming and come up with sound business strategies. This buyout and the turnaround of TXU's position on coal plants and on global warming is an earthquake that happened in Texas but the shockwaves are going to be felt from Wall Street to Washington."
The director of the National Environmental Trust's coal campaign, Peter Altman, says legislators and investors will take more notice of environmental concerns.
"As welcome as the TXU news is, it is a wake-up call for Congress. There are still more than a hundred other coal-fired power plants on the drawing boards across the United States. The financial climate is getting very different for those now. It's not safe to assume anymore that you can just rush new plants forward without adequately considering the implications for public health and the environment. Wall Street and Capitol Hill policymakers are going to be looking more closely at whether building plants whose carbon cannot be easily controlled is really in our national interest."
Speaker Pro Tem Sylvester Turner of district 139 says he's concerned that buyers based outside of Texas could end up bleeding residential and small business ratepayers. The private equity firms purchasing TXU say they will join the FutureGen Industrial Alliance. The buyers also agree to cut electricity prices ten percent and limit prices until September 2008.
Lyondell Chemical is selling its worldwide inorganic chemicals business to National Titanium Dioxide of Saudi Arabia in a $1.2 billion deal, according to the Houston Business Journal. The Lyondell subsidiary is the world's second-largest producer of titanium dioxide, commonly used in paint, toothpaste and sunblock. The deal is expected to close during the first half of this year.
"Steady as she goes'' is the way business economists see the economy performing. A survey by the National Association for Business Economics forecasts growth in the gross domestic product at 2.8 percent this year, with improvement to 3.1 percent in 2008. The economists add that homebuilding will likely bottom out this year, turning higher gradually as next year begins. And they expect moderate job growth in 2007 and roughly stable unemployment. As far as prices are concerned, the forecast is for lower headline inflation this year--with core inflation largely stable, oil prices in the $58 range and for the fed to continue holding the line on interest rates.
Former Federal Reserve Chairman Alan Greenspan says there's a risk the U.S. economy could slip into recession by year's end. Speaking via satellite to a group in Hong Kong, Greenspan noted that the U.S. economy has been expanding since 2001 and that there are signs the current cycle is coming to an end. While saying it would be "very precarious'' to try to forecast that far into the future, Greenspan said he could not rule out the possibility of a recession late this year. Greenspan also warns that the budget deficit remains a concern.
A lot of folks aren't socking enough away for a rainy day. A survey released by a coalition of government and consumer groups finds that just 40 percent of adults have separate emergency savings funds to cover things line a car repair or emergency dental visit. According to the survey, the young, poor, and minorities are least likely to have separate emergency savings funds. Just 19 percent of those aged 18-to-24, 23 percent of those with household incomes under $25,000, 31 percent of blacks and 32 percent of Hispanics have such a separate fund. By comparison, 58 percent of those with household incomes of at least $75,000 have a separate fund. The Consumer Federation of America says those with such a fund will more easily be able to cover unexpected expenses. Those who don't may have to depend on high-cost credit, such as payday loans or even credit cards, to bail themselves out.
JetBlue is handing out the first of the vouchers promised to delayed travelers in its new Customer Bill of Rights. A spokeswoman says the airline is paying back 100 passengers aboard a flight from New York to Raleigh, North Carolina, after the plane sat for hours on a runway at Kennedy Airport. They'll each receive $100 vouchers good for a future flight. And they'll get their choice of either a refund or accommodation for future travel. Some customers on last night's flight say they're not upset while others say they've never witnessed such bad service. The company is trying to repair its reputation after bad weather stranded passengers in planes at Kennedy for up to ten and a-half hours almost two weeks ago. Soon after, the airline revealed its Customers Bill of Rights that promised better service and compensation for delays.
The new Ronald McDonald House at Children's Memorial Hermann Hospital on Fannin officially opens this morning. It features 14 hotel-like rooms to accommodate families with critically ill children. Families stay free of charge. The two-story structure is the first in Houston to offer "care by parent" rooms for parents who will take home critically ill infants and need to learn how to operate ventilators and other medical equipment.
Hondo rancher Debbie Davis has no beef with those who want to see their Texas longhorns, well, beefier. Her passion, though, lies with preserving the traditional longhorn breed that survived on little grass and water as it roamed Texas and other parts of the west in the mid-19th century. Davis is president of the Cattlemen's Texas Longhorn Registry. In her view, "a true Texas longhorn is endangered right now.'' So she's striving to keep the bloodline of the traditional longhorn as pure as possible. The longhorn isn't on any endangered lists. But visit any livestock show and all the competition is between longhorns that have far more heft and girth than the traditional gaunt, rangy animal. Davis and other ranchers believe crossbreeding with other cattle species is diminishing the traditional longhorn's numbers. Others say a longhorn is a longhorn is a longhorn. Davis' registry is working on a DNA database that will define the genetic makeup of a traditional longhorn. Until then, animals are required to have a visual inspection as well as blood-typing to see if there are markers of other breeds. Davis and others have registered about 3,500 longhorns since 1990.