Energy Future Holdings

About Energy Future Holdings

Energy Future Holdings (formerly TXU) has seen the future and it works -- powered by electricity. The company is the largest nonregulated retail electric provider in Texas (TXU Energy) with 2 million customers, and through its Luminant unit it has a generating capacity of almost 15,430 MW from its interests in nuclear and fossil-fueled power plants – more... in the state. Energy Future Holdings has regulated power transmission and distribution operations through 80%-owned Oncor Electric Delivery. Oncor operates the largest regulated distribution and transmission system in Texas, providing power to more than 3 million electric delivery points over more than 117,000 miles of transmission and distribution lines.

Geographic Reach

Energy Future Holdings serves customers across Texas.

Operations

In the competitive electric segment, Energy Future Holdings' Luminant operations include 14 power plants with 5,110 MW of natural gas, 2,300 MW of nuclear, and more than 8,000 MW of coal-fueled generation capacity. It is also the largest purchaser of wind-generated electricity in Texas (900 MW of wind power under contract).

Financial Analysis

In 2011 the company reported 14% drop in revenues. This was primarily due to the loss of retail customers due to stiff competition and by a 26% drop in wholesale revenues due to lower market prices. Energy Future Holdings' net loss improved from $2.8 billion in 2010 to $1.9 billion in 2011, thanks largely to lower fuel and purchased power costs.

It also faces ongoing structural problems. Energy Future Holdings has been saddled with almost $38 billion of long term debt, as its original bet, that natural gas prices (which traditionally set electricity prices) would remain high has not played out. The reality is that gas prices have sunk, running up expenses and dragging down revenues.

Strategy

The company is seeking to increase efficiencies in its core operations and explore growth opportunities across its business lines. As part of this strategy TXU Energy is pushing its Texas Choice brand, which offers consumers power exclusively sourced from wind farms. In 2012 it was also conducting a program to improve its customer retention rates by offering customers a comparative check list for selecting a retail electricity provider. – less

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