TXU Electric Delivery, and InfrastruX Energy Services, a joint venture created by TXU Corp. and InfrastruX Group, have announced a 10-year, $8.7 billion agreement for utility infrastructure and management services. InfrastruX Group is a national provider of utility-related construction and maintenance services. Under the terms of the agreement, which is the first of its kind in the utility industry, TXU Electric Delivery will contract for design, construction and maintenance services from InfrastruX Energy Services.

TXU Electric Delivery will continue to own its distribution and transmission system and associated assets, and fulfill all of its obligations as an electric utility. Its focus will remain on managing assets, including conducting long-range system planning, developing construction and maintenance plans, operating its transmission and distribution system and deploying smart grid technologies to achieve superior service and reliability levels. InfrastruX Energy Services will be responsible for delivering the services defined by the agreement, which consist of maintenance, construction, power restoration and other services for the utility.

The joint venture between InfrastruX Group and TXU is expected to create a business with the scale to provide distinctive services in utility design, operations, maintenance and construction to TXU Electric Delivery and other utilities across North America, helping them serve customers more reliably and efficiently.

"This alliance is the right combination to create a single, best-in-class provider of utility services," said Michael T. Lennon, InfrastruX Energy Services' president and chief executive officer. "InfrastruX Energy Services will have the scale and skill sets that are required to play a central role in meeting the utility services and infrastructure construction needs that presently exist in the U.S. We look forward to working with TXU Electric Delivery, and we are encouraged that other utilities in the U.S. have expressed interest in a similar arrangement."

Lennon will lead the new joint venture as its president and chief executive officer. Brenda Pulis, currently TXU Electric Delivery's senior vice president of distribution, along with certain other members of TXU Electric Delivery's management team will join InfrastruX Energy Services' senior leadership. Approximately 2000 current TXU Electric Delivery employees will also join 3000 employees from InfrastruX Group to become employees of InfrastruX Energy Services.

"TXU Electric Delivery's customers will receive significant reliability and efficiency benefits," said Pulis. "Additionally, TXU Electric Delivery employees should have new career opportunities as part of a larger company with a national platform."

InfrastruX Energy Services expects to be fully operational by the end of 2006, subject to customary conditions, including the restructuring of existing debt held by InfrastruX Group. The service agreement and joint venture are not expected to have a material effect on the 2006 and 2007 operational earnings outlook for TXU Corp. The potential for improvement in TXU Corp.'s long-term growth will depend on the success of InfrastruX Energy Services in adding profitable contracts with other utilities.

Black River Capital LLC advised TXU Electric Delivery on this transaction.