No corporate general counsel in the history of the Texas power industry has been involved in more multibillion-dollar deals or guided companies through as many business-threatening crises as Andrew Wright.
In 2007 Wright played a leading role as an associate general counsel at TXU Energy when the Dallas-based electric giant was purchased by private equity firms KKR and TPG for $45 billion in the largest leveraged buyout ever.
Seven years later he was front and center when the company created from the LBO, Energy Future Holdings, became the eighth largest U.S. company to declare bankruptcy. He led the team that did the $20 billion spinoff of TXU and Luminant Energy and later the $18.8 billion Oncor sale.
Wright is now the general counsel at Talen Energy, an independent power producer that generates an estimated $4 billion in annual revenue. In the past year he has handled groundbreaking deals, faced significant energy market challenges, learned about the world of intellectual-property litigation and faced the aftermath of one of the largest natural disasters to ever hit Texas.
“Yes, it has been a crazy and challenging year,” Wright told The Texas Lawbook in an exclusive interview. “At the end of the day, we are a manufacturing business. We manufacture electrons and put them on a wire. It is good to remember to keep it simple sometimes.”
Wright said 2021 was filled with those challenges, including:
- Cleanly exiting its investor role in bankrupt NorthEast Gas Generation;
- Winter Storm Uri and the mountain of litigation that followed;
- The creation of a new joint venture with Pattern Energy, which is a leader in renewable energy;
- Litigating, then successfully settling a major patent infringement dispute; and
- Rising natural gas prices that added significant financial distress, leading Wright and Talen to employ outside legal and financial advisors to work on a possible restructuring.
“The power industry has seen a year of significant change and challenges, and it started with Winter Storm Uri,” Wright said. “No doubt, the past year has been a challenge.”
Citing Wright’s extraordinary achievement during intense turmoil, the Association of Corporate Counsel’s Houston Chapter and The Texas Lawbook name the Talen Energy general counsel the 2022 Houston General Counsel of the Year for a Midsized Legal Department.
ACC Houston and The Lawbook will honor Wright and other 2022 Houston Corporate Counsel Award finalists and recipients at the annual award’s event May 19.
Premium Subscribers: Click Here for a Q&A with Andy Wright, where he dishes on what he sees as the most important business issue facing corporate legal departments and what he looks for in hiring outside counsel.
“Andy has shown year after year that he is a transformative and leading general counsel,” said Paul Genender, a partner at Weil, Gotshal & Manges in Dallas. “Andy has provided unique ideas and support that have transitioned companies and set them up for success. Now, as Talen Energy’s general counsel and corporate secretary, Andy is proving once again that he can not only keep a business running during times of distress but also provide visionary leadership and a needed calm amongst a storm.”
“Andy is having a profound impact on Talen despite having been with the company only four years, through his key role in evaluating and negotiating strategic alternatives and ESG infrastructure development,” said Genender, who nominated Wright for the award.
Rob Little, a partner at Gibson, Dunn & Crutcher in Dallas, worked with Wright since the two were associates at Vinson & Elkins and has done transactional work for Wright during his time at EFH and Talen.
“Andy brings smarts, excellent judgment and an incredible work ethic to the GC role,” Little said. “There is no issue he won’t tackle – he’s fearless. He handles difficult situations with clear-eyed thinking and a calm approach. He is also a consummate student of transactions and legal issues.”
Wright was born and grew up in Wichita, Kansas. His father was junior high school principal, and his mother mostly stayed at home to raise Wright and his three brothers and sister.
When not studying, Wright became active in the Boy Scouts and achieved the rank of Eagle Scout. In his school, he joined the wrestling and cross country and track teams.
He earned a bachelor’s degree in business administration and accounting from Southern Methodist University. With no lawyers in his family, Wright did not start considering law school until he was in college.
“I was an accounting major but knew I didn’t want to be a lifelong CPA,” he said. “Thought law would be a nice way to balance my accounting background.”
Wright, who is now 54, spent three years as an accountant at KPMG in Chicago before going to the University of Notre Dame Law School, where he graduated magna cum laude in 1996.
“I thought I would be a tax lawyer because that is what I had done at KPMG,” he said. “But after summer clerkships, I realized that corporate lawyer was more of the QB for deals and wanted to sit in that seat.”
V&E hired Wright to be part of its corporate-transactional practice in Dallas, though he spent two years in the firm’s London office. He represented billionaire Tom Hicks in a series of radio station acquisitions.
In 2004, Wright made the decision to go in-house.
“It came out of the blue,” he said. “TXU was starting an in-house group from scratch with 20 or so former big-firm lawyers, and it seemed like a great opportunity. In hindsight, it was the best career move I could have made.”
Less than three years on the job as a senior counsel at TXU, the mega-deal of a lifetime came along.
Two private equity firms, KKR and TPG, acquired TXU in a record-smashing $45 billion leveraged buyout. The previous high was KKR’s 1988 leveraged buyout of R.J.R. Nabisco for $25 billion.
“I was involved in all stages of the deal from negotiating acquisition docs, diligence, regulatory approvals, financing, etc.,” he said. “It was all we did for about a year.”
The buyers bet that natural gas prices would go up and that would result in an increase in electric rates. EFH would benefit financially because it generated power from coal and nuclear plants.
The private-equity fund leaders didn’t foresee the energy revolution called hydraulic fracturing, which made natural gas and oil cheap and plentiful. The result: Electric prices remained low and required debt payments swallowed EFH’s balance sheet.
In 2014, EFH filed the eighth largest corporate bankruptcy in history.
Wright was EFH General Counsel Stacey Dore’s top deputy at the time of the Chapter 11 filing. He was involved in nearly every meeting.
“In bankruptcy cases, you see the best and the worst,” Wright said.
The EFH bankruptcy became a fiasco as hedge funds kept objecting to various terms and Texas regulators vetoed the sale of Oncor three times. The Texas Public Utilities Commission finally approved Oncor’s $18.8 billion sale to Sempra Energy in 2018. In the meantime, EFH spent four long years in bankruptcy and spent nearly $1 billion on its legal and financial advisors.
Andy Wright at the Oncor deal closing
“At the beginning I was the lead transactional lawyer working on the bankruptcy,” Wright said. “By the end I was GC and the only lawyer left to ‘close the door.’”
Wright was not out of work long. In June 2018, Talen Energy hired him as general counsel. Talen is one of the largest competitive power generation and infrastructure companies in North America. The company is also developing a large-scale portfolio of renewable energy, battery storage and digital infrastructure assets across its expansive footprint.
“Talen is an [independent power producer] similar to EFH/TXU, and it is owned by private equity,” he said. “So it is an in-house role that I’m used to. The legal group really has a seat at the table and is a key part of the leadership team, part of the business team.”
Wright had another connection to Talen. Riverstone Holdings is the majority owner of The Woodlands-based energy company and Riverstone’s general counsel is Stephen Coats, who worked with Wright at V&E.
Only months after Wright started at Talen, the company was one of several energy firms sued for patent infringement by Midwest Energy Emissions Corporation. Midwest Energy claimed that Talen and the other companies willfully infringed on two U.S. patents related to its two-part sorbent enhancement additive process for mercury removal from coal-fired power plants. Wright and Talen turned to Baker Botts to lead the defense.
A federal judge in Delaware ruled that Midwest Energy “lacked plausible allegations that Talen Energy knew of the asserted patents or knew or should have known that their conduct constituted infringement of those patents.”
Wright, who had never handled a patent case before, used the court decision to settle the litigation in 2021. As part of the agreement, Talen gained a perpetual license to the mercury-removal process in question.
“Every day is different, and every day presents new issues and challenges,” Wright said. “It is part of what I love about this job and the energy industry. You start the day with a plan and, sometimes, you get it done and sometimes you never even get to the plan.”
Wright ended 2020 and started 2021 using his bankruptcy experience from EFH to benefit Talen.
In the summer of 2020, two Talen-owned power plants, which were under a project-financed subsidiary called NorthEast Gas Generation, filed for bankruptcy under Chapter 11. The lead creditor was Beal Bank.
Wright guided Talen through multiple forbearances, new loan negotiations, an M&A marketing process and ultimately a successfully confirmed and fully consensual Chapter 11 plan.
In a transaction valued at $630 million, Wright reached an agreement to transfer the equity interest to Beal Bank.
“Andy quarterbacked Talen, their lender and a large team of outside counsel and financial advisors to a successful settlement with state regulatory authorities regarding significant and novel legal issues arising from regional greenhouse gas initiative credits, avoiding a contested Chapter 11 confirmation hearing and ensuring Talen’s clean exit from the assets,” Genender wrote in nominating Wright for the award.
“Andy was able to navigate the potentially treacherous waters posed by related-party and affiliate transactions, ensuring directors and officers of various Talen entities remained advised and vigilant of their respective fiduciary duties,” Genender wrote.
In February 2021, Mother Nature sent Texas a wintry blast like none it had ever witnessed.
Starting Feb. 14 and lasting five days, temperatures plummeted to record lows, often near or below zero throughout the state. Winter Storm Uri came with freezing rain, ice and snow. Power lines snapped. Gas pipelines froze. Power generators went silent. Electricity serving more than 10 million went off.
Scores of people died. Businesses shut down. Texas authorities overseeing the power grid took emergency steps by increasing the price of electric by more than 650 percent ― to $9,000 per megawatt-hour.
The aftermath for Talen: Several major regulatory inquires, legislative hearings and dozens and dozens of lawsuits in which billions of dollars are at stake.
“The litigation regarding Winter Storm Uri is massive and is employing a lot of lawyers,” Wright said.
Talen is one of the lead companies involved in the fight over the decision by the Texas Public Utility Commission and the Electric Reliability Council of Texas to set the price of electricity at $9,000 per MWh (FYI, Talen is for it). The company is among dozens of energy companies that have been sued for personal injury and wrongful death because of the power outage. And Talen is involved in a handful of major breach-of-contract disputes.
“Andy showed outstanding leadership in the face of adversity, helping navigate the winter storm with calm and compassion in the midst of the crisis,” Genender wrote. “Andy was at the forefront of numerous customer-facing communications and actions, public-policy matters, litigation issues and restructuring considerations throughout the storm’s aftermath.
“Andy will tell you the event really tested him, as well as his colleagues,” he said.
Less than two months after Winter Storm Uri, Talen announced an expanded partnership with renewable energy company Pattern Energy. The joint venture, announced last April and in the works for nearly a year, is named PT Energy Transitions. The JV covers the development, financing, construction and operation of about 1.4 gigawatts of utility-scale renewable energy projects over the next five years on land surrounding Talen’s existing fossil fuel plants.
Decarbonizing its asset base, Wright said, is financially intelligent and shows Talen is investing in the communities it serves.
Wright admits challenges lie ahead, but he declines to discuss details.
Bloomberg News reported in April that Talen is seeking $1 billion in financing as part of a possible upcoming bankruptcy and restructuring plan. Talen has hired Weil Gotshal as its legal advisors and Evercore and Alvarez & Marsal as its financial advisors. A group of ad hoc bondholders have Kirkland & Ellis and Rothschild as their counsel. King & Spalding and Paul Weiss have been hired by creditors’ groups.
Corporate lawyers who work with Wright say he is the perfect general counsel to help lead Talen through the turmoil. They say he understands that little details of a transaction can make up the big picture or strategy. And the more complex the deal, the more Wright digs in.
Wright and Gibson Dunn’s Little, for example, worked together to acquire natural-gas power plants from NextEra while EFH was in bankruptcy.
“We were holed up in Florida around Thanksgiving working around the clock on the transaction and dealing not only with the buyer and its counsel but also EFH’s creditors and their counsel,” Little recalls. “Trying to complete a $1.3 billion acquisition while in bankruptcy is no simple feat.
“Andy wore many hats in that deal ― lead negotiator, M&A lawyer, bankruptcy lawyer and overall deal quarterback,” Little said. “He had complete command of all the various complicated facets of the deal and managed not only the deal issues but also the stakeholders involved. It was a master class.”