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CLEANER AIR FOR DALLAS-FORT WORTH

TXU recognizes that the DFW area has a significant air quality challenge, and the company is helping in a variety of ways. A combination of clean-air equipment and operational changes has lowered the company's emission rate in the area by 88 percent since 1997. This reduction is greater than any other industry or company in the area and was ahead of the schedule defined by the state. In addition, TXU's DFW-area power plants now operate only during periods of peak electric demand, and equipment such as the selective catalytic reduction unit installed at the Lake Hubbard plant in Dallas is making a big difference, reducing that facility's NOx emissions by more than 90 percent. Air quality, however, remains a challenge due to other emission sources, especially cars and trucks, inside the local nine-county area. This local problem will not be fixed until reductions are required from other sources in the area.

REDUCED EMISSIONS

TXU has worked hard to reduce emission rates and is proud to meet or exceed all state and federal regulations. TXU's NOx emission rate is 44 percent below the national average, helping Texas achieve the lowest NOx emission rate of all the coal-using states in the nation.

EMISSION RATE COMPARISONS

In the following graphs, TXU's generation (measured in heat input) and emission rates for NOx, CO2, and SO2 and those of the other top 30 electric generators in the United States are compared. To make these comparisons, the top 30 U.S. electric companies were identified based on total electric generation from fossil fuels only (coal, natural gas, and oil). This information came from data provided to the EPA from Continuous Emission Monitoring equipment for electric generating units and was obtained from the EPA Appendix B Emissions Scorecard 2004 database. These data were used to calculate emission rates for each of the top 30 generators. 2004 data were the most recent available. (see charts)

REGULATORY COMPLIANCE SUCCESS

TXU's regulatory compliance rate for air quality was 99.1 percent in 2005. While many factors contributed to this success, front-line plant managers, engineers, and operators are charged with responsibility and accountability for meeting all relevant local, state, and federal air quality standards. Maintaining air quality is a serious and time-consuming business, and TXU employees work to make sure the company excels in air quality compliance. (see chart)

BEST WORKPLACE FOR COMMUTERS

TXU is leading the way to cleaner air with programs that produce tangible results and honors from others. TXU was named one of the nation's Best Workplaces for Commuters in 2005 by the U.S. Environmental Protection Agency (EPA) and the U.S. Department of Transportation because of the company's programs that encourage employees to use mass transit. One of the largest purchasers and subsidizers of employee bus/train passes in the DFW area, the company also provides financial incentives to encourage carpooling. To celebrate this honor, TXU gave away $2,800 worth of transit passes to DFW-area employees who hadn't been using them, providing an incentive for employees to try out mass transit, reducing air emissions and saving them money.

TREE FARM: ONE OF A KIND

TXU continues to sponsor the highly successful TXU Urban Tree Farm at Richland College in North Dallas in cooperation with the Texas Trees Foundation. In 2005, some 100 TXU employee volunteers helped plant 9,500 seedlings at the farm, and TXU donated $100,000 to help expand the unique program. The trees grown at the nation's largest-known nonprofit urban tree farm specifically benefit the urban areas of North Texas at local schoolyards, along highways, and in parks. The National Tree Trust has estimated the trees alone will sequester nearly 175 tons of CO2 over their 80-year life span. The TXU Urban Tree Farm is also a sustainable program. TXU provided the money to fund the farm, and revenues from tree sales to community organizations support subsequent years' plantings.

CLIMATE CHALLENGE LEADER

Since 1991, when accounting began for voluntary greenhouse gas emission reductions, TXU's programs have reduced, avoided, or sequestered the equivalent of almost 263 million tons of CO2 in one of the largest individual company efforts in the U.S. These reductions have been reported to the U.S. Department of Energy (DOE) each year since 1995. Results are available at http://www.eia.doe.gov/oiaf/1605/frntvrgg.html.

In 2004, the year of the latest available figures, TXU's voluntary greenhouse gas reduction program sequestered, avoided, or eliminated the equivalent of 26 million tons of CO2 through 13 different programs and projects. The company's CO2 emissions from fossil plants totaled 55 million tons. Had these voluntary Climate Challenge projects not been in place, TXU's CO2 emissions would have been 45 percent higher. The remaining parts of the program are projects that capture or sequester carbon or that can be credited with offsetting emissions that would have otherwise taken place. These offsets effectively reduced CO2 emissions by another 1.2 million tons to the equivalent of just below 54 million tons. (see charts)

PARTNERS IN SF6 REDUCTION

TXU became a charter member of the EPA's Emission Reduction Partnership for Electric Power Systems in 1991. This program was developed to encourage companies to reduce their emissions of sulfur hexafluoride (SF6), a greenhouse gas that is used throughout the utility industry as an insulator in electrical equipment. Since the program began, TXU has prevented the release of more than 46,700 pounds of SF6 to the atmosphere, which accounts for approximately 9 percent of the partnership's cumulative emission reductions. The environmental benefit gained from avoiding these emissions is equivalent to one of the following:

RENEWABLE ENERGY LEADER

For more than 30 years, TXU has financially supported the development and implementation of renewable energy resources such as wind and solar power. As a result, today TXU is the fifth-largest purchaser of wind-generated energy in the nation. TXU currently purchases approximately 580 megawatts (MW) produced by more than 700 individual wind turbines and 4 MW of renewable energy from a facility fueled by landfill gas. These purchases provide enough energy to supply the annual energy requirements of more than 120,000 homes, or approximately 260,000 Texans, and represent approximately 2 percent of TXU's total energy resources. Through a new contract, TXU expects to increase renewable energy purchases to 705 MW from 756 wind turbines on Jan. 1, 2007. Finally, TXU Renew, a company launched in April 2006 to develop renewable energy projects, is expected to double the renewable portfolio with 700 MW of additional power over the next five years. TXU is proud to be a major player in increasing renewable capacity in Texas. (see chart)

MERCURY EMISSION RESEARCH

TXU voluntarily began research into capturing mercury emissions at lignite coal plants seven years ago. The research program is important because no commercially available technology exists to specifically capture mercury from lignite facilities, although current TXU air emission controls do capture some. TXU is partnering with the EPA, DOE, and the University of Texas at Austin's Applied Research Laboratories on these technology projects. In early 2006, TXU was selected as a partner in two new DOE-funded projects, which are focused on field testing advanced post-combustion mercury control technologies that remove at least 90 percent of mercury emissions with a cost reduction of 50 percent or more.

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