Employees who move to the joint venture are going to be part of a winning team. They will add tremendously to the skills, expertise and know-how of IES. Most of them will continue to support the same customers they do today; however, some will be able to apply their skills and expertise to other utility clients throughout the United States.

This combination of talent, greater resources and a broader operating environment will create a platform that allows the companies and employees to deliver high-quality services. It also will allow them to grow in new ways and new directions that are unavailable in the current model. It will provide a key feature to enable Electric Delivery to move forward with our work to develop the electric smart grid of the future.

Electric Delivery is partnering with Current Communications (Germantown, Maryland, U.S.) and other leading vendors to deploy the world's first smart grid over an upgraded electric distribution network. This 21^st century grid relies on the deployment of a number of advanced technologies on the electric delivery system to improve reliability, increase customer satisfaction and enable the provision of advanced services to consumers.

Current Communications plans to market broadband technology to consumers. It will build the network using a combination of fiber-optic cable and broadband signals over Electric Delivery power lines. Devices at transformers near customers' homes then will transfer the data signal to lower-voltage lines that feed through new digital electric meters into homes and businesses.

This initiative will revolutionize the way electricity is delivered and delivery assets are managed. The new system will allow the company to read meters remotely, obtain time-sensitive data to facilitate energy-efficiency programs, predict network outages before they affect customers, detect and identify specific locations for outages and other network problems as they occur, which will speed restoration and repairs.

A key enabler of the smart grid is advanced data communications. For Electric Delivery, broadband over power-line (BPL) technology will provide the high-speed data communication capability for a majority of the customers we serve, while providing the utility a vast data network to support a host of new, advanced meters. This new technology transforms ordinary electric power lines into a vast data network.

We have faced challenges as we partner with other companies for services and we will again in the future. Outsourcing or joint-venture deals are complicated and involve tradeoffs, tough decisions and unpredictable schedules.

For example, inquiries have been filed at the PUC of Texas about the IES transaction. PUC officials are examining questions of reliability, assurance of workforce availability and safety. Electric Delivery believes that the transaction will result in improved service, reliability, cost and safety performance or we would not have chosen this new business arrangement.

We are certainly aware of the risks associated with these transactions. We are confident that the IES alliance, as well as the CGE alliance and the good governance practices we have pioneered, offer the best way forward for our customers, our employees, our company and our shareholders. We are moving toward a business model of increasing our focus on what will become our core competencies — owning, managing and operating the distribution and transmission system and associated assets — while ensuring that we have the highest levels of support and expertise available on our system.

Rob Trimble is president and COO of TXU Electric Delivery.

Brenda Pulis currently is senior vice president of Transmission & Distribution Asset Services for Electric Delivery. She will assume the role of president and COO for InfrastruX Energy Services. brenda.pulis@txued.com

When TXU Corp. decided in 2004 to turn over six business service functions to an external provider, it was joining a growing number of companies and organizations striving to reduce costs and focus on core competencies. TXU partnered with Capgemini to create a new joint-venture company for the work. Capgemini Energy now handles call center, billing, supply chain, finance and accounting, and information technology services for TXU and its subsidiaries. Human resources and payroll services are also provided through an affiliate agreement. More than two years into this alliance, we have learned some vital lessons about contracting services that are enabling us to build a stronger relationship with InfrastruX Energy Services and other partners, and enhancing our ability to transform our business model.

• Communication is an ongoing, vital component of the relationship

  We now are intentional about communicating with and understanding each other and reaching consensus when problems arise. Few issues are black and white, and we work together over time to solve them. Not much gets accomplished without mutual respect and robust communications at all levels of the organization. This requires sustained effort. We communicate on a regular schedule: through phone calls, e-mails and routine face-to-face meetings.

• Mutual success depends on true collaboration

  Our alliance has evolved from what initially was an adversarial relationship into a true partnership. Unlike a merger and acquisition transaction, where each party goes its separate way after closing, in a joint venture the parties must maintain a relationship. Today, everyone involved realizes that we all succeed when we work together.

• It takes time — sometimes up to 18 months or longer — for the organization to reach a steady state after the initial turmoil of a new deal

  All the employees for Capgemini Energy transferred from employment at TXU to the new company. It took time to define roles. The service provider may introduce innovations that the client would have been reluctant to take on. In our case, some support functions were transferred from centers near our base in Dallas, Texas, U.S., to locations in Houston, Texas, and some to Poland and India. It took effort to ensure that we didn't lose valuable knowledge about systems and processes during that transition.