The company traces its history to the beginnings of electric service in northern Texas. Predecessor companies include
Dallas Power & Light (DP&L, founded 1917 with roots dating to 1882), which served the city of Dallas;
Texas Electric Service Company (TESCO, founded 1929 with roots dating to 1885), which served
Fort Worth and areas west of
Abilene; and
Texas Power and Light (TP&L, founded 1912), which served other areas of northern and west-central Texas. All three companies were owned by the
Electric Bond and Share Company, a subsidiary of
General Electric. DP&L, TP&L and TESCO were connected by a single
grid in 1932. The three companies were deemed to be an integrated system with the passage of the
Public Utility Holding Company Act of 1935. In 1945,
Texas Utilities was formed as a publicly owned holding company that owned DP&L, TP&L and TESCO. The three operating companies continued to operate separately until 1984, when they were merged into one operating company, called
TU Electric ("TU" meaning "Texas Utilities"). Following acquisitions of
The Energy Group plc for $10 billion in 1998 in the
United Kingdom and a power generator in
Australia, Texas Utilities became TXU, and was by 2000 the fifth largest energy company in the world, after its purchase of NORWEB from
United Utilities and two municipal utility companies in Germany, Stadtwerke Kiel and Braunschweiger Versorgungs AG.
Deregulation In 1996, TXU merged with the parent company of Lone Star Gas, allowing TXU to become the largest provider of
electricity and
natural gas in the state of
Texas, a maneuver which set the stage for deregulation. In 2002, the state of Texas
deregulated the Texas electric market, and TXU lost its monopoly on retail electric sales in northern Texas. TXU continued to own transmission and distribution facilities, but was required to open retail sales to competition. Competitors during this time period included
Champion Energy,
Dynowatt,
Texas Power,
Entrust Energy,
Reliant Energy,
Bounce Energy,
Direct Energy,
Stream Energy,
Gexa Energy,
Green Mountain Energy,
Cirro Energy, and
Commerce Energy. Surprisingly, many utility customers opted to remain with TXU despite active retail competition. [See "Power to Choose: An Analysis of Consumer Behavior in the Texas Retail Electricity Market" with Ali Hortacsu and Seyed Ali Madanizadeh]
2002–2004 divestitures TXU divested itself of its European holdings in late 2002 mainly due to the collapse of its
UK holdings and then of its Australian holdings in 2004. The UK operations had been purchased following a bidding war with PacifiCorp which pushed up the price paid substantially from opening offers but most of the cost thereof was indebted back onto the UK businesses themselves. Falling UK energy prices (which later rose substantially) and outstanding purchase debt eventually crippled the European business. TXU considered investing £250 million from its US business to bolster the equity base, but following Rating Agency pressure this was shelved in order to protect the credit ratings of the US parent. As a consequence the directors of the UK businesses appointed Administrators in September 2002. The UK retail business and several of its gas fields were purchased by Eon (owners of Powergen), who closed its commercial operations in Rayleigh, Essex and relocated them to Powergen offices in Nottingham & Coventry. TXU's incomplete new UK headquarters were not part of the deal and are now used by Suffolk County Council. Also, in October 2004, TXU sold its
natural gas properties to
Atmos Energy. TXU sold its Australian assets to
Singapore Power, which retained the distribution businesses (
electricity and
natural gas distribution networks) in the state of
Victoria, and onsold the electricity retail and generation businesses to Hong-Kong-based
CLP Group, trading as TRUenergy. On May 18, 2004 TXU and
Capgemini entered a limited partnership to form Capgemini Energy Limited Partnership, a new company that will initially provide business process services and information technology solutions to TXU.
2007 buyout and 2014 bankruptcy Private equity firms
KKR,
TPG, and
Goldman Sachs Alternatives purchased TXU in 2007; the sale became final on October 10, 2007. As part of the buyout, the electric distribution part of the company became
Oncor Electric Delivery and the electric generation business became
Luminant, leaving
TXU Energy as solely a retail provider of electricity, without any electrical distribution or production assets. Luminant owns and operates the
Comanche Peak Nuclear Power Plant. The buyout, which left Dallas-based Energy Future with a debt of more than $40 billion, was a gamble that natural gas prices would rise and give its coal-fired plants a competitive advantage. Instead, natural gas prices fell sharply. Consequently, Energy Future Holdings was mired in financial problems, leading to the April 29, 2014 filing for
Chapter 11 bankruptcy protection. == Subsidiaries ==