TXU and Capgemini form new business service company for utilities
DALLAS and NEW YORK, May 19, 2004 — Capgemini and TXU Corp. (NYSE: TXU) will agree to enter a limited partnership to form Capgemini Energy Limited Partnership, a new company that will initially provide business process services and information technology solutions to TXU, with a plan to offer similar services to other energy companies in the future.
Under the 10 year agreement, valued in excess of $3.5 billion, roughly 2,700 employees will move from TXU to Capgemini Energy, effective July 1. Employees in the new Capgemini Energy limited partnership will provide information technology, call center, billing, human resources, supply chain and accounts payable, and finance and accounting services to TXU and other energy companies.
TXU will own less than 3 percent of Capgemini Energy and has the right to sell its interest in the joint venture to Capgemini upon termination of the contract. “Capgemini Energy will contribute to TXU’s commitment to better service, improved competitiveness and reduced operating costs,” said TXU CEO John Wilder. “With the expertise and participation of our employees who join this partnership, Capgemini Energy can market these business services to energy companies throughout the U.S.” Over the coming months, Capgemini Energy will develop and implement new business processes and rationalize existing services in order to enhance operational efficiencies and leverage new technologies.
Going forward, Capgemini Energy will serve as Capgemini’s exclusive vehicle for offering technology and business process services for other companies in the U.S. electric, gas and water utility industry.
“We are excited to be TXU’s partner as they take a bold step into the future with this innovative and collaborative approach to extending their business services,” said Chell Smith, Americas Chief Executive Officer of Capgemini. “Together we are committed to delivering high-quality, cost-effective services that will help drive TXU’s performance,” she said. “The creation of this scaleable, cost-effective platform clearly represents a defining moment for the US utility industry as well.” The collaborative venture allows Capgemini Energy to provide TXU with the opportunity to streamline its business support services while improving service delivery for non-core activities for an extended period of time. Capgemini Energy is committed to achieving 15-second answer times on electric customer calls and to improving satisfaction rates by 30 percent.
While enabling these service level improvements, Capgemini Energy should enable TXU to realize significant savings in 2005 relative to 2003 spending levels. This is the second large transaction for Capgemini in the utility sector in North America in recent years. Capgemini currently operates a multi-client platform in Canada for Hydro One, Ontario Power Generation and Bruce Power with aggregate contract value of $1.7 billion to manage and operate information technology, human resources, payroll, supply chain, customer service and settlements and accounting services, that is successfully delivering tangible service improvements and cost savings.
TXU, a Dallas-based energy company, manages a portfolio of competitive and regulated energy businesses in North America, primarily in Texas. TXU’s unregulated business, TXU Energy, provides electricity and related services to more than 2.6 million competitive electricity customers in Texas, more customers than any other retail electric provider in the state. TXU Energy also owns and operates 18,500 megawatts of generation in Texas, including 2,300 MW of nuclear-fired and 5,837 MW of lignite/coal-fired generation capacity. The company is also the largest purchaser of wind-generated electricity in Texas and among the top five purchasers in North America.
TXU’s regulated electric distribution and transmission business complements the competitive operations, using asset management skills developed over more than one hundred years, to provide reliable electricity delivery to consumers. TXU’s electric delivery operations are the largest in Texas, providing power to 2.9 million delivery points over more than 98,000 miles of distribution and 14,000 miles of transmission lines. TXU has agreed to sell its energy business in Australia, TXU Australia, and has announced its intent to sell TXU Gas, its largely regulated natural gas transmission and distribution business in Texas. Visit www.txucorp.com for more information about TXU.
Capgemini, one of the world’s foremost providers of Consulting, Technology and Outsourcing services, has a unique way of working with its clients, which it calls the Collaborative Business ExperienceT. Through commitment to mutual success and the achievement of tangible value, the company helps businesses implement growth strategies, leverage technology and thrive through the power of collaboration. Capgemini employs approximately 55,000 people worldwide and reported 2003 global revenues of 5.754 billion euros.
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