Private equity firms found TXU attractive because of its large fleet of power plants, including relatively cheap coal plants, and more than 2 million residential and business customers.
TXU's stock soared from late 2002 to late 2005. The dramatic climb slowed as the company came under fire for a sharp increase in electric rates after deregulation — Texas has among the nation's highest prices — and when company pushed for 11 new coal-fired plants in the state.
KKR co-founder Henry Kravis and TPG founding partner David Bonderman muted some of the criticism by agreeing to drop plans for eight of the coal plants and to reduce some rates.
Kravis said TXU had lost 700,000 customers mostly because of high rates, and that he would make the company more responsive to consumers.
The fate of the deal was in doubt, however, when Texas lawmakers threatened to pass anti-TXU legislation. TXU and the KKR-TPG group spent $17 million on a lobbying and advertising blitz, and the legislation died.