A MESSAGE FROM TXU’S CHIEF EXECUTIVE

I am pleased to present the 14th annual review of TXU’s environmental activities within a new, expanded report on the company’s overall corporate citizenship. In 1991, we became one of the first large companies to provide a report card on our environmental activities for customers, shareholders and the general public. Beginning this year, we’ll also report on our community, diversity and safety accomplishments as a way for stakeholders to measure TXU’s corporate social responsibility. We believe our corporate citizenship is an important benchmark that complements our financial and operating performance.

I am honored to lead a company with a long history of balancing responsibility for providing electricity with stewardship for the air, water and land. According to the U.S. Environmental Protection Agency, America’s air is the cleanest it’s been in over 30 years, and TXU is playing an important part in this progress by reducing air emissions and complying with all applicable environmental regulations.

Along with our environmental commitment, we’re known for our tradition of giving back to our communities through volunteer activities, corporate contributions and economic development. In 2004, we made a fivefold increase in funding TXU Energy Aid, our flagship program that helps customers in temporary financial need pay their energy bills, setting aside $15 million over three years. Since its start in 1983, Energy Aid has helped more than 250,000 families.

We also have a long and impressive legacy of actively working to expand diversity in our work force and among the suppliers we use. We realize that a progressive and successful initiative in this area broadens the economic vitality and prosperity of our communities. We’ve found that valuing diversity makes good business sense and is a key competitive advantage.

Finally, safety for employees, contractors and the public remains TXU’s paramount concern. Our customers, communities, employees and contractors deserve the best in safety performance. While TXU’s workplace safety performance is in the industry’s top quartile, we’re focused on reaching the top 10% and won’t be satisfied until we do.

A hallmark of the high-performing business TXU strives to be is the pursuit of constant improvement. Over the years, we’ve developed and reported meaningful metrics to track the performance of our environmental programs. We’ll do the same with our community, diversity and safety programs, using this report as a baseline. I hope you’ll find this new corporate citizenship report valuable as you evaluate TXU’s social responsibility as part of its overall performance.


Sincerely,

C. John Wilder
Chief Executive