By Bill Zeeble, KERA reporter
http://stream.publicbroadcasting.net/production/mp3/kera/local-kera-625644.mp3
Dallas, TX – Bill Zeeble, KERA reporter: After months of debate & wrangling among possible suitors, lenders, lobbyists and legislators, TXU's controversial takeover by 2 equity firms ended this morning. 95 percent of the shareholders approved it. Two thirds were required. Kohlberg, Kravitz, Roberts - KKR- and Fort Worth's Texas Pacific Group become the new owners. That's assuming approval by the Nuclear Regulatory commission, expected before the year's out. TXU representative Sophia Stoller says this deal's good for electricity consumers.
Sophia Stoller, TXU spokesperson: TXU has already reduced rates by10 percent and they'll continue to reduce prices once the merger closes by an additional 5 percent. So customers on our price to beat rollover rate will benefit from a 15 percent reduction.
Zeeble: KKR made those rate reduction promises as it courted TXU shareholders and legislators. Lawmakers worried the deal might hurt customers. But the price lock ends at the end of the next year. Austin-based consumer watchdog group Public Citizen, led by Tom Smitty Smith, warns customers better watch out when the deadline ends.
Tom Smitty Smith, Public Citizen Director: We expect rates to go very high as a result of trebling of debt they're carrying. It's kind of like a dark cloud of secrecy is enveloping TXU. We won't know much about the underlying management or costs because it's a private company now. It's kind of like a landowner, landlord, refinancing a house and taking out 3 times the debt. And rents will need to go up. Rates will rise.
Zeeble: Outside the downtown Dallas hotel where shareholders voted this morning, about 50 members of the grassroots group ACORN - The Association of Community Organizations for Reform Now - marched in protest of the buyout. Linelle Hamilton said most protesters are elderly, and struggle with electricity rates.
Linelle Hamilton, ACORN: Our utilities will go sky high. We know. We can't hardly make it now. We came out here to demo to let our politicians know we're watching them. We need them to honor our needs. If they don't 148 we voted them in, we can vote them out.
Zeeble: TXU counters, saying the new owners have already promised an extra 130 million dollars for low income customers over the next 5 years. It says that should help. But worries persist. In most states that have deregulated electric companies, utility rates have mostly soared, with Texas leading the way, up nearly 60 percent. But rates also rose in regulated states, thanks to rising natural gas and oil costs. Consumer advocate Tom Smith hopes state lawmakers reconsider rate regulation, to keep electric prices affordable. He says it'll be left to upset citizens complaining to legislators about high electricity prices. But TXU's price reduction and freeze runs through Dec of 2 thousand 8, just before the next legislative session. Bill Zeeble KERA news.