<PAGE>

                                                                  EXHIBIT 4(lll)



                    AGREEMENT AS TO EXPENSES AND LIABILITIES

     AGREEMENT dated as of December 13, 1999 between Texas Utilities Company
doing business as TXU Corp, a Texas corporation ("TXU"), and TXU Capital II, a
Delaware business trust (the "Trust").

     WHEREAS, the Trust intends to issue its Common Trust Securities (the
"Common Trust Securities") to and receive Debentures from TXU and to issue its
8.70% Trust Originated Preferred Securities (the "Preferred Trust Securities")
with such powers, preferences and special rights and restrictions as are set
forth in the Amended and Restated Trust Agreement of the Trust dated as of
December 13, 1999, as the same may be amended from time to time (the "Trust
Agreement");

     WHEREAS, TXU is the issuer of the Debentures;

     NOW, THEREFORE, in consideration of the acceptance of the Preferred Trust
Securities by each holder thereof, which acceptance TXU hereby agrees shall
benefit TXU and which acceptance TXU acknowledges will be made in reliance upon
the execution and delivery of this Agreement, TXU, including in its capacity as
holder of the Common Trust Securities, and the Trust hereby agree as follows:

                                   ARTICLE I.

     Section 1.01 Assumption by TXU. Subject to the terms and conditions hereof,
                  -----------------
TXU hereby irrevocably and unconditionally assumes the full payment, when and as
due, of any and all Obligations (as hereinafter defined) to each person or
entity to whom the Trust is now or hereafter becomes indebted or liable (the
"Beneficiaries"). As used herein, "Obligations" means any indebtedness, expenses
or liabilities of the Trust, other than obligations of the Trust to pay to
holders of any Preferred Trust Securities the amounts due such holders pursuant
to the terms of the Preferred Trust Securities. This Agreement is intended to be
for the benefit of, and to be enforceable by, all such Beneficiaries, whether or
not such Beneficiaries have received notice hereof.

     Section 1.02 Term of Agreement. This Agreement shall terminate and be of no
                  -----------------
further force and effect upon the date on which there are no Beneficiaries
remaining; provided, however, that this Agreement shall continue to be effective
or shall be reinstated, as the case may be, if at any time any holder of
Preferred Trust Securities or any Beneficiary must restore payment of any sums
paid under the Preferred Trust Securities, under any Obligation, under the
Guarantee Agreement dated the date hereof by and between TXU and The Bank of New
York, as guarantee trustee, or under this Agreement for any reason whatsoever.
This Agreement is continuing, irrevocable, unconditional and absolute.

     Section 1.03 Waiver of Notice. TXU hereby waives notice of acceptance of
                  ----------------
this Agreement and of any Obligation to which it applies or may apply, and TXU
hereby waives presentment, demand for payment, protest, notice of nonpayment,
notice of dishonor, notice of redemption and all other notices and demands.
<PAGE>

     Section 1.04 No Impairment. The obligations, covenants, agreements and
                  -------------
duties of TXU under this Agreement shall in no way be affected or impaired by
reason of the happening from time to time of any of the following:

          (a) the extension of time for the payment by the Trust of all or any
portion of the Obligations or for the performance of any other obligation under,
arising out of, or in connection with, the Obligations;

          (b) any failure, omission, delay or lack of diligence on the part of
the Beneficiaries to enforce, assert or exercise any right, privilege, power or
remedy conferred on the Beneficiaries with respect to the Obligations or any
action on the part of the Trust granting indulgence or extension of any kind; or

          (c) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of debt of,
or other similar proceedings affecting, the Trust or any of the assets of the
Trust.

Neither the Trust nor any Beneficiary shall have any obligation to give notice
to, or obtain the consent of, TXU with respect to the happening of any of the
foregoing.

     Section 1.05 Enforcement. A Beneficiary may enforce this Agreement directly
                  -----------
against TXU and TXU waives any right or remedy to require that any action be
brought against the Trust or any other person or entity before proceeding
against TUC.

                                   ARTICLE II.

     Section 2.01 Binding Effect. All of the obligations, covenants and
                  --------------
agreements contained in this Agreement shall bind the successors, assigns,
receivers, trustees and representatives of TXU and shall inure to the benefit of
the Beneficiaries and their successors and assigns.

     Section 2.02 Amendment. So long as there remains any Beneficiary or any
                  ---------
Preferred Trust Securities of any series shall be outstanding, this Agreement
shall not be modified or amended in any manner adverse to such Beneficiary or to
the holders of the Preferred Trust Securities.

     Section 2.03 Notices. Any notice, request or other communication required
                  -------
or permitted to be given hereunder shall be given in writing by delivering the
same against receipt therefor by facsimile transmission (confirmed by mail),
telex or by registered or certified mail, addressed as follows (and if so given,
shall be deemed given when mailed or upon receipt of an answer-back, if sent by
telex), to wit:

                         TXU Capital II
                         c/o Laura Anderson, Administrative Trustee
                         1601 Bryan Street
                         Dallas, Texas  75201
                         Facsimile No.:  214-812-2488


                                       2
<PAGE>

                         Texas Utilities Company doing business as
                         TXU Corp.
                         1601 Bryan Street
                         Dallas, Texas  75201
                         Facsimile No.:  214-812-2488
                         Attention:  Treasurer

     Section 2.04 THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD
TO CONFLICT OF LAWS PRINCIPLES).


                                       3
<PAGE>

     THIS AGREEMENT is executed as of the day and year first above written.

                                        TEXAS UTILITIES COMPANY doing business
                                        as TXU CORP


                                        By: /s/ Kirk R. Oliver
                                           -------------------------------------
                                           Name:  Kirk R. Oliver
                                           Title: Treasurer and Assistant
                                                  Secretary


                                        TXU CAPITAL II


                                        By: /s/ Laura Anderson
                                           -------------------------------------
                                             Laura Anderson
                                             not in her individual capacity,
                                             but solely as Administrative
                                             Trustee


                                       4