David Bonderman, the top man at private equity firm Texas Pacific Group, is pitching the idea of not proceeding with the construction of eight coal-fired power plants as part of his bid for TXU Corp (NYSE: TXU). Bonderman supposedly made the offer to appease environmental activists and hold off one potential obstacle to closing the deal.However, is this Bonderman's environmental soft side or is it about making more money? By not proceeding with eight power plants, that is a lot of future supply of power that will not be available to the marketplace. Believe it or not, power consumption is a pretty good growth business, growing about 6% to 8%, if memory serves me correctly.
Bonderman has a long history of participating in environmental causes, serving on boards of the Grand Canyon Trust and the Wild Life Fund. However, one must question what will happen to power prices when a huge future supply of power is eliminated. It most likely means big green profits for Bonderman and Texas Pacific.
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