Energy Future Collapse Rooted in Bad Gas Price Bet

Creditors are haggling over who gets what piece of Texas's largest electricity provider, Energy Future Holdings Corp., in anticipation of a bankruptcy filing expected by Nov. 1. The collapse comes six years after KKR & Co., TPG Capital and Goldman Sachs Capital Partners acquired the company in the biggest-ever leveraged buyout.

Published Oct. 21, 2013

Natural gas futures daily close price, in dollars per million British thermal units (mmBtu)

Energy Future was taken private for $48 billion in a bet that natural gas prices would rise. Instead, they plunged more than 70 percent.

Debt at Energy Future's subsidiaries

Energy Future Holdings Corp. and its subsidiaries hold $43.6 billion in debt. Most of the debt is held in Texas Competitive Electric Holdings Co., which operates TXU Energy, a retail electricity seller, and Luminant, which owns more than 15,400 megawatts of power-plant capacity in Texas.

Total: $43.6 billion debt

EFH

Energy Future Holdings Corp.

Energy Future's businesses and creditors are divided into two sides — TCEH which holds its competitive electricity units, and EFIH which holds its regulated power-line utility, Oncor. TCEH and EFIH creditors have been negotiating to cancel some borrowings on both sides in exchange for ownership of the parent company and reduced amounts of debt.

EFCH

Energy Future Competitive Holdings Co.

TCEH

Texas Competitive Electric Holdings Co. LLC

$29.8B

EFCH is the holding company for TCEH, which operates Texas electricity entities TXU Energy and Luminant. Their power plants should continue operating as usual while under Chapter 11 protection. The entities have a combined debt of almost $30 billion.

EFIH

Energy Future Intermediate Holding Company LLC

EFIH is the holding company for regulated power-line distributor Oncor, the only subsidiary protected from bankruptcy.

$7.8B

Oncor

Oncor Electric Delivery Co.

A profitable power-line utility, Oncor has been "ring fenced" — or excluded from any bankruptcy. Energy Future owns an 80 percent stake in Oncor.

$5.4B

Note: Debt totals may not add due to rounding

Sources: Company filings, data compiled by Bloomberg

GRAPHIC: ALEX TRIBOU / BLOOMBERG VISUAL DATA