Utility Plans $10 Billion Investment to Power the Future of Texas
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In response to the electric power needs of the growing Texas economy, TXU Corp. (NYSE: TXU - News) announced a plan to invest $10 billion in power generation to provide lower-cost, secure and stable power, the introduction of new consumer and business service offerings, and the largest voluntary emissions reduction program of its type in the nation. "Texans want ample generation supply, access to lower electric prices, and better air quality, and TXU will deliver all three," said C. John Wilder, TXU chairman and CEO. "Our new service offerings and this massive investment in power infrastructure will save consumers money, add reliable electric generating capacity to reduce dependence on high cost natural gas, create jobs, and lower key emissions -- all at the same time."
Volatile energy markets pose challenges for Texans
The future growth of the now vibrant economy could be dampened by volatile and rising energy commodity prices. Texas has one of the fastest growing economies in the country and is projected to add nearly 6 million residents within a decade. At the same time, Texas electric power reserve margins are compressing rapidly and are expected to fall below levels deemed reliable by 2010.
Texas has a high reliance on natural gas for power generation, with 72 percent of the state's generation capacity depending on natural gas for fuel, compared to the U.S. average of 45 percent. This reliance causes substantial challenges because natural gas prices have quadrupled and most experts believe the low gas prices of the 1990s will not return. At the same time, U.S. reliance on imported natural gas is increasing significantly; over the next 20 years, U.S. imports are expected to increase five-fold.
"There is no quick fix," said Wilder. "There is no easy solution to reduce U.S. dependence on foreign energy sources and to reduce power prices. To address these challenges, TXU has a three-part plan. We will invest in lower cost power supplies, innovate with new service offerings that enable customers to save money and improve air quality by reducing emissions."