For much of the past century, the electricity and natural-gas sectors of the United States, as in most developed countries, appeared stable, prosperous, and relatively unexciting, at least from the outside. But in the mid- to late 1980s, a massive industrial restructuring got under way as corporations scurried to position themselves for the coming era of deregulation, volatile energy markets, and intense competition.

Dallas-based TXU, the product of a three-way operating-subsidiary merger in 1984 (though with roots stretching back to 1882), was among those convulsed by the storm. After the company consolidated its domestic position with a further restructuring (in 1993) and expanded internationally in Australia, Germany, and the United Kingdom, it seemed reasonably well placed when Senate Bill 7 (the Texas deregulation legislation for the electricity industry) came into effect, on January 1, 2002. Yet ten months later, TXU was forced to downgrade its earnings expectations and plunged into the most serious financial crisis in its history.

The subsequent transformation was led by C. John Wilder, TXU’s first “outside” CEO and formerly the chief financial officer and a member of the senior-management team at Entergy. Under Wilder’s direction, TXU’s financial and operating performance have sharply improved, fixed costs have...