Why TXU's Plan Is a Bad Idea

Questions and answers on the proposed building bonanza

Posted: 06-Sep-2006; Updated: 27-Dec-2006

Q: Why are Environmental Defense and others opposed to TXU's proposed power plants?

A: Environmental Defense opposes TXU's plan because it will sacrifice public health and the environment to make record profits.

The company plans to use old, outdated technology that will more than double its emissions of global warming pollution precisely at a time when other states and companies are beginning to take global warming seriously. These plants will introduce pollutants like mercury, nitrogen oxide and sulfur dioxide to communities where TXU wants to build. TXU refuses to use available technology to make its plants as clean as possible — instead trying to get a barely passing grade by doing the minimum required by law.

And then there's the consumer rip-off problem. TXU customers already pay among the highest rates in the state. These plants would burn cheap, dirty coal, but TXU plans to sell the electricity at higher rates comparable to cleaner, natural gas-fired electricity. So the environment, our health and our wallets will pay the price for TXU's plans, and TXU will pocket record profits in the process.

Q: TXU says it will voluntarily reduce emissions by 20 percent. Will these plants increase or decrease pollution levels?

A: TXU's claim of 20 percent reductions is clever spin.

First, they are not voluntary cuts. The federal government mandated a 20 percent reduction from TXU's existing facilities. TXU plans to clean up those existing plants more than they have to so that the new plants' emissions will be offset. That plan can't be fully criticized — at least they're doing something. But east and north Texas suffer from severe air quality problems. Texas should be examining every opportunity to cut emissions as much as possible, not approving plans that barely pass federal mandates.

Second, these proposed plants won't be emission-free. Even if statewide emission levels don't skyrocket, many communities with new plants will have higher emissions than ever. Do you want a new source of mercury pollution in your town?

Finally, TXU's so-called reductions don't include carbon dioxide, the primary greenhouse gas. Texas is the number-one emitter of carbon dioxide. TXU is the biggest emitter in the state, and these new plants would more than double its carbon dioxide emissions. So TXU might be bragging about its environmentalism, but it's ignoring the significant role it already plays in global warming.

Q: What impact would these 11 coal plants have on global warming?

A: These plants would more than double TXU's annual emissions of carbon dioxide, the most plentiful greenhouse pollutant.

Global warming requires international attention, but TXU plays a major role in the amount of greenhouse gas emissions that spew from the company’s power plants. TXU's 11 proposed plants will produce an estimated 78 million tons of carbon dioxide per year.

To put that in perspective, 78 million tons of carbon dioxide is:

• More than the total 2001 emissions of 21 states and many countries, including Sweden, Denmark and Portugal;
• The annual emissions of 14 million average passenger cars;
• 2.6 times larger than the benefits of California's groundbreaking greenhouse gas reduction program for cars and trucks;
• Eight times larger than the projected 2018 benefits resulting from the Northeastern States Regional Greenhouse Gas Initiative (RGGI);
• One-quarter of the 2004 emissions benefits of EPA's voluntary climate change initiative program; and
• Equal to the emissions of four Cadillac Escalades for each one of TXU's 2.4 million customers!

For another way to grasp the enormity of the additional carbon dioxide these 11 plants will spew, consider these facts:

• Power plants are the biggest single source of the country's carbon dioxide pollution, most of which comes from coal-fired plants. (The U.S. leads all nations in global warming pollution, producing nearly one-fourth of the world's carbon dioxide.)
• Among all states, Texas is already the number-one global warming polluter. If it were a country, it would rank in the top 10 globally.
• If all 11 plants are built, TXU — now ranked as the 10th largest emitter of carbon dioxide among American utilities — would vault to 3rd place.

Q: Is Texas facing rolling blackouts like those suffered by Californians?

A: No. As long as utility companies properly maintain existing power plants and continue to keep them running during peak demand times, Texas has enough power to meet demand.

In fact, a report by the Public Utility Commission of Texas states, "You may be wondering whether this (blackouts) could happen in Texas. The answer, in a word, is no."

As our state continues to grow, we will need more energy. But dirty coal power is the wrong choice. Wind farms are growing in West Texas, and new installations can be brought online in a year's time. Energy efficiency programs are already drastically reducing energy demands in places like San Antonio and Austin. The bottom line is that that there are faster, cheaper and cleaner ways to meet Texas' growing energy demand. But TXU is in the coal business, so regardless of the question, its answer will always include "more coal power plants."

Q: If we are not facing an immediate demand, why do we need all of these power plants at once?

A: We don't need them.

And we certainly don't need them forced upon us by a fast-track approval process that shuts out public debate.

Electricity usage is projected to increase, but the two plants that have already been approved will meet our state's needs for additional power and additional pollution. Power companies like TXU are rushing to build these new plants in hopes of being grandfathered against future pollution regulations designed to protect our health.

Q: Is TXU using the Best Available Control Technology (BACT) as required by the Clean Air Act?

A: No. TXU could be, but it's not.

Instead of newer, cleaner technology like IGCC (Integrated Gasification Combined Cycle) TXU will use dirty, outdated, pulverized coal technology. IGCC is a clean coal technology that turns coal into a gas, and then removes impurities from the coal gas before it is combusted. This technology results in lower emissions of sulfur dioxide, fine particulates, mercury and carbon dioxide. It also results in improved efficiency compared to conventional pulverized coal.

A report from the Environmental Protection Agency stated that IGCC is a much cleaner technology that uses far less water and can generate fewer solid wastes. Though the EPA has said IGCC's capital (construction) costs are higher, IGCC plants have lower operating cost.

Q: TXU is telling investors that this is a done deal. Is there anything we can do to stop the plants?

A: Yes, there is something you can do.

Despite TXU's optimism, this is not a done deal. TXU has only applied for permits, it has not yet been granted one for any of the proposed plants. In fact, two administrative law judges in August recommended the denial of a permit for TXU's first plant.Pressure must be brought to bear on Governor Perry, whose executive order fast-tracked the permitting process, and his appointees to the Texas Commission on Environmental Quality, who oversee the permitting process and will eventually grant or deny the permit.

Q: I have heard that coal is the least expensive way to produce power in our state. Does that mean that with these new plants my rates will go down?

A: There's no guarantee your rates will go down. They may actually increase.

Make no mistake, TXU is a publicly traded company focused on profits. There's nothing wrong with that, but TXU is selling this plan as a pro-customer idea. It's a pro-profit idea. TXU customers pay among the highest rates in the state. TXU plans to sell cheaper, dirty electricity into a market that prices electricity from all sources based on higher, natural gas-based power. It costs TXU less than cleaner energy, but it costs you the same. The company just reported a 31 percent increase in quarterly earnings, and the rates it charges customers have increased 24 percent in the last year, even as natural gas prices fell.

Q: Why would Texas support TXU's plans, and even fast-track the process, if we don't need these proposed plants?

A: TXU has connections and a powerful lobbying team.

According to filings with the Texas Ethics Commission, TXU was second in the state for lobby contract expenditures in 2005 ($3,200,000), second to only SBC Corp. In October of 2005, four of the six entities seeking new coal plants in Texas have given more than $750,000 to Texas PACs and politicians since 2003. The top recipient of this money, Governor Perry, received 9 percent of the total ($66,890), according to a Lobby Watch report from Texans for Public Justice.

The report also stated that most of the campaign contributions from coal-plant applicants came from TXU, which operates some of Texas' largest dirty-coal plants. TXU PACs and employees poured $753,522 into state politics in recent years.