Green business group says its work not done

by Margaret Allen - Special to Houston Business Journal - March 2, 2007

Texas Business for Clean Air was formed by three Dallas businessmen in December to fight for clean air in North Texas. The 200-member group advocates for energy efficiency and protests construction of new coal plants using old technology -- particularly the 11 proposed by TXU Corp., now trimmed to three.

New York-based Kohlberg Kravis Roberts & Co. and Fort Worth-based Texas Pacific Group announced this week that they will pay $45 billion to acquire TXU and take the electricity giant private.

Days after the announcement, the Dallas Business Journal, a sister paper of Houston Business Journal, interviewed the co-chairmen of the clean-air group, David Litman, Internet business guru and founder of www.consumerclub.com, and Garrett Boone, co-chairman and founder of Dallas-based The Container Store.

DBJ: What's your reaction to TXU's possible acquisition and its plan to slash the number of coal plants it will build?

DAVID LITMAN: We're thrilled that eight coal-fired power plants have been taken off the table. We're also pleased the projected new owners seem to be sensitive to business and environmental concerns, especially concerning clean air. But we have to look at the plants that are being constructed, and we have to examine the details of those. There are many unanswered questions.

DBJ: TXU argued the coal plants are needed to meet future demand. Do you agree?

LITMAN: Texas was facing a shortfall of peak-load capacity, according to the Electric Reliability Council of Texas, starting in the years 2008 and 2009. Let's just take the old TXU plan: It didn't address those years. The plants weren't scheduled to be built and online until 2010. We had thoughts on how to deal with that.

DBJ: How?

LITMAN: First, 3,000 megawatts of capacity in brand new gas-fired power plants near Houston have been mothballed. Those could be used to generate peak load because they can be fired up quickly and brought down quickly. That's not the case with base-load generation like coal and nuclear.

Secondly, there are a number of efficiency measures we can undertake with regard to electric use. There are many examples. Two include interruptible load, in which industrial concerns allow their electric supply to be interrupted in exchange for a lower electricity rate during the year. Texas already has 1,100 megawatts of that. Before deregulation, we had over 3,000 megawatts. We think it would not be difficult to increase that capacity during peak periods.

Also, we could install intelligent metering in homes and businesses so consumers know every 15 minutes what the cost of their power is. During peak times, they reduce usage. That reduces peak demand, which is the most expensive, because right now we're building plants to run literally just a handful of days a year.

DBJ: Would that require the Texas Legislature to act?

GARRETT BOONE: I'm not sure it needs to be mandated so much as facilitated. Also, we're not anti-coal, but we want to minimize coal and maximize energy efficiency. It's possible it could be done by developing technology that could be exported to India and China and the rest of the world, where they're opening a new coal plant a week.

DBJ: The Texas Association of Business favored TXU's plan. Are you at odds with them?