TXU Energy’s integration of production, trading, and retail sets us apart. Personifying TXU Energy’s three integrated disciplines are, left to right, Andrew Valencia, generating plant manager, Texas; Stephen Cornish, energy trader, Geneva; and Louise Bennett, retail services, Victoria. OUR MERCHANT ENERGY BUSINESS TXU Energy is not your average merchant energy business. We have an integrated approach that spans the energy value chain. What sets us apart is the way we integrate energy production, merchant energy trading, and retail operations and manage these disciplines as one single business wherever we operate in competitive markets. Our portfolio management approach allows us to create opportunities across the entire value chain. These advantages come not just from the capabilities within each discipline but also from the effective interaction of the elements of the portfolio. The model creates value that is greater than the sum of the individual parts and with less risk in dynamic energy markets. ENERGIZING NORTH AMERICA On January 1, 2002, when Texas officially opened its electricity market to competition, TXU Energy launched its merchant energy business in one of the most attractive markets in the United States. Texas accounts for nine percent of the nation’s electrical demand, making it the second-largest electricity market. The economy is highly diverse with a large concentration of energy-intensive industries and high residential electricity use. Unbundled from the regulated “wires and pipes” utility that delivers the power, TXU Energy in North America began competition with the inheritance of 2.7 million electricity customers and 21,092 megawatts of generation and fuel assets. On January 1, we became the No. 1 competitive energy retailer in the United States, a top-three US merchant generator, and a top-five power trader and marketer.