A shareholder advocacy group, As You Sow, is pressing three of the nation’s largest investor-owned utilities to accelerate their shift to lower-carbon generation by encouraging their shareholders to approve resolutions directing the IOUs to prepare plans to ramp down their coal-fired generation.
Ameren, Duke Energy and FirstEnergy were targeted by San Francisco-based As You So because of their size and relatively high levels of dependence on coal-fired power, said Corinne Bendersky, the group’s energy program manager.
According to As You Sow, Ameren’s regulated utility subsidiaries in Missouri and Illinois get 85% of the power from relies on coal-fired capacity, and its merchant generation subsidiary, Ameren Energy Resources, gets 98% of its power from coal. The merchant unit sells power into the Midwest Independent Transmission System Operator and PJM markets.
As You Sow said in a statement that if, as is still considered likely, Duke closes on its acquisition of Progress Energy this summer, the combined entity “will own and operate 89 coal-fired units: 56 units lack sulfur dioxide controls; none have mercury controls.”
The group acknowledged that Progress plans to retire 13 coal units by 2014, and that Duke plans to retire some 3,300 MW of coal-fired capacity over the next few years. But it said that Duke is currently “doubling down on its coal investments” by acquiring Progress and by building new coal-based facilities in Edwardsport, Indiana, and at its Cliffside station near Charlotte.
FirstEnergy, in turn, has announced plans to close 21 coal units at nine coal-fired plants by September 2012, thereby reducing its total coal capacity from 65% to 59% of the fleet’s total capacity, As You Sow said. But the company “projects that coal generation will increase to 77.4 million MWh in 2013, up from 73.2 million MWh in 2011.”
Bendersky said As You Sow “would like to see each of the companies drill down to the coal-unit level” and analyze in detail whether it would be economically justifiable to make emission-control and other investments to their coal units, given that federal environmental regulations are likely to become increasingly stringent.
Ameren shareholders will vote on its resolution first, on April 24. Duke shareholders will vote on a similar resolution on May 3, and FirstEnergy will follow suit on May 15.
Ameren’s board of directors urged shareholders to reject the resolution, asserting that the company’s corporate social responsibility report, regulatory filings and other information “currently provide shareholders with extensive information on the company’s actions and plans to minimize its exposure to coal-related costs and risks, including minimizing commodity risks, emissions and costs of environmental compliance and construction risks.”
It said development of the plan called for by the the resolution “would be duplicative and an unnecessary use of company resources.”
Duke’s and FirstEnergy’s boards also urged “no” votes. Duke’s said the company’s management continues to examine how best to minimize the risks associated with “greenhouse gas emissions and other issues associated with coal plants.”
Duke noted that it has been working to expand its nuclear, solar and wind capacity, and that its Edwardsport integrated gasification combined-cycle plant will be far cleaner than traditional coal units.
Similarly, FirstEnergy’s board told shareholders that the company “has recently expanded its environmental disclosures to include detailed information regarding plans to reduce its exposure to coal-related costs and risks. Therefore, your board believes that your company has been responsive to its shareholders and that its expanded disclosures address the proponent’s proposal.”
–Housley Carr