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Sunday, February 05, 2017 11:11:15 PM
From DP&L to Vistra Energy, D-FW's most powerful electric provider gets a fresh start (2/04/17)
The region's top electric company has had many names -- and business strategies: Dallas Power & Light, Texas Utilities, TXU Corp., Energy Future Holdings and now Vistra Energy Corp.
This is more than a much-needed rebranding for the largest power player in Texas.
After emerging from bankruptcy in October, Vistra had shed $33 billion in debt and has continued to get leaner. It's also been separated from Oncor, the regulated transmission unit now being sold.
While the business remains difficult, Vistra has major assets and a big advantage: a fresh start.
The cleansing of bankruptcy
In late 2007, private equity firms bought TXU and added $30 billion in debt. After commodity prices fell, it couldn't pay the interest and filed for Chapter 11. Power generator Luminant, electricity retailer TXU Energy and parent Vistra have emerged as more competitive businesses. Key comparisons between then and now:
"We know what got us into trouble and we're not going there again. The drivers that put us into bankruptcy are still in the marketplace. If we have our cost structure right, we can actually win. We can be the guy that's consolidating in this business."
— Curt Morgan, president and CEO, Vistra Energy Corp.
Luminant's size has an upside
Shale gas and wind power created abundant, cheap energy. That's been tough on Luminant, whose 50 electric generating units are fueled by coal, nuclear and natural gas. But being big in Texas has benefits. Our population has grown twice as fast as the nation's, and Texas residents use about 30 percent more electricity.
"TXU Energy has found a way to decommoditize the electric retailing business. They've been able to get people to come to them, and their customers are not just buying on price anymore. They've created a modern power retailer, and they've done it better than anybody."
— Bruce Bullock, director, Maguire Energy Institute at Southern Methodist University
TXU Energy slows the exodus
Sometimes, losing less is winning. TXU Energy is the state's largest electricity retailer despite losing over 1 million residential customers since deregulation began in 2002. Focusing on promotions like "free nights and weekends" and customer service, it's holding on to more high-margin business. It's also generating more cash than Luminant.
Why Oncor's the crown jewel
In Texas' competitive electric market, it's much safer, and profitable, on the regulated side. Consider Oncor, whose transmission lines deliver power to 3.4 million meters. NextEra agreed to buy Oncor for almost $19 billion, roughly twice the value of Vistra. Why? Even when power prices tumble, revenue and profits don't.
"For a decade, Texas' largest power company was dominated by debt. Those shackles are finally off, and the company now has low costs and a leading position in one of the country's best markets. With a new name and a new CEO, it's time to make a mark."
— Mitchell Schnurman, business columnist, The Dallas Morning News
http://www.dallasnews.com/business/economic-snapshot/2017/02/04/new-regionalpower-company-emerges
The region's top electric company has had many names -- and business strategies: Dallas Power & Light, Texas Utilities, TXU Corp., Energy Future Holdings and now Vistra Energy Corp.
This is more than a much-needed rebranding for the largest power player in Texas.
After emerging from bankruptcy in October, Vistra had shed $33 billion in debt and has continued to get leaner. It's also been separated from Oncor, the regulated transmission unit now being sold.
While the business remains difficult, Vistra has major assets and a big advantage: a fresh start.
The cleansing of bankruptcy
In late 2007, private equity firms bought TXU and added $30 billion in debt. After commodity prices fell, it couldn't pay the interest and filed for Chapter 11. Power generator Luminant, electricity retailer TXU Energy and parent Vistra have emerged as more competitive businesses. Key comparisons between then and now:
"We know what got us into trouble and we're not going there again. The drivers that put us into bankruptcy are still in the marketplace. If we have our cost structure right, we can actually win. We can be the guy that's consolidating in this business."
— Curt Morgan, president and CEO, Vistra Energy Corp.
Luminant's size has an upside
Shale gas and wind power created abundant, cheap energy. That's been tough on Luminant, whose 50 electric generating units are fueled by coal, nuclear and natural gas. But being big in Texas has benefits. Our population has grown twice as fast as the nation's, and Texas residents use about 30 percent more electricity.
"TXU Energy has found a way to decommoditize the electric retailing business. They've been able to get people to come to them, and their customers are not just buying on price anymore. They've created a modern power retailer, and they've done it better than anybody."
— Bruce Bullock, director, Maguire Energy Institute at Southern Methodist University
TXU Energy slows the exodus
Sometimes, losing less is winning. TXU Energy is the state's largest electricity retailer despite losing over 1 million residential customers since deregulation began in 2002. Focusing on promotions like "free nights and weekends" and customer service, it's holding on to more high-margin business. It's also generating more cash than Luminant.
Why Oncor's the crown jewel
In Texas' competitive electric market, it's much safer, and profitable, on the regulated side. Consider Oncor, whose transmission lines deliver power to 3.4 million meters. NextEra agreed to buy Oncor for almost $19 billion, roughly twice the value of Vistra. Why? Even when power prices tumble, revenue and profits don't.
"For a decade, Texas' largest power company was dominated by debt. Those shackles are finally off, and the company now has low costs and a leading position in one of the country's best markets. With a new name and a new CEO, it's time to make a mark."
— Mitchell Schnurman, business columnist, The Dallas Morning News
http://www.dallasnews.com/business/economic-snapshot/2017/02/04/new-regionalpower-company-emerges
"Someone said it takes 30 years to be an instant success" - Gabriel Barbier-Mueller, CEO of Harwood International
