As You Sow: Energy

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Coal

In 2012, As You Sow filed new shareholder resolutions asking utilities to report on their plans to reduce exposure to coal-related costs and risks. This resolution builds upon our 2011 resolution, which asked companies to report on the financial risks of continued reliance on coal for electricity generation. The coal risks identified were based on findings published in As You Sow's Financial Risks of Investments in Coal White Paper.

As You Sow finds it essential for investors to know how companies perceive the risks related to coal and how companies plan to transition to cleaner energy sources to protect both their investments and the environment.

Read our 2012 Proxy Background Memo for a full discussion of the coal-related risks highlighted in As You Sow's 2012 shareholder proposals.

Shareholders voiced their support for our resolutions at Duke Energy (12%), FirstEnergy (11%), and Ameren (10.5%). These votes exceed the SEC-defined threshold for success: Ameren received over three times the support required for a first-year proposal; the vote at Duke increased by 41% over a similar resolution filed last year.

For more information on specific company risks, resolutions filed, and actions taken, please click on the company names below.

Ameren

Our 2012 shareholder resolution with Ameren requests the company to publish a report on plans to reduce their exposure to coal-related costs and risks, including progress towards achieving specific goals to minimize commodity risks, emissions other than greenhouse gasses, costs of environmental compliance, and construction risks.

To learn more about Ameren's unique coal risk exposure, read the Ameren Proxy Memo or our press release for the shareholder meeting on April 24th.

Duke Energy

Our 2012 shareholder resolution with Duke Energy requests the company to publish a report on plans to reduce their exposure to coal-related costs and risks, including progress towards achieving specific goals to minimize commodity risks, emissions other than greenhouse gasses, costs of environmental compliance, and construction risks.

To learn more about Duke Energy's unique coal risk exposure, read the Duke Energy Proxy Memo or our press release for the meeting on May third.

FirstEnergy

Our 2012 shareholder resolution with FirstEnergy asks the company to publish a report on plans to reduce our company's exposure to coal-related costs and risks, including progress toward achieving specific goals to minimize commodity risks, emissions other than greenhouse gases, and costs of environmental compliance.

To learn more about FirstEnergy's unique coal risk exposure, read the FirstEnergy Proxy Memo.

>>Recent media clippings for our coal program

Background

Coal in the United States is at a crisis point. In 2009, coal accounted for 44.5% of this country's electricity generation and 93% of domestic coal was consumed by U.S. power plants. But the nation's aging coal fleet, 60% of which is over 40 years old, needs to be modernized.

This is only the beginning.

Currently, a consensus among industry analysts is developing that finds that 24% or more of U.S. coal-burning generation could be retired in the very near future due to the cost of regulatory compliance and the inability for merchant utilities to recover rates. Replacement resources are likely to come from natural gas, solar, wind, and energy efficiency—not new coal.

Financial risks due to reliance on coal fall along three major factors:

Costs of environmental compliance. Enforcement of existing environmental regulations and proposed new regulations over the useful life of coal plants will impose significant, unpredictable, individual, and cumulative capital and operating costs on these plants.
Increasing price and price-volatility of coal. The changing nature of domestic coal markets and the prospect of future increases in the price of coal makes its instability a novel part of the energy calculus in the United States.
Construction and cost-recovery. For new plants, construction costs have risen exponentially and utilities can no longer guarantee that these expenditures will be recovered via rates or electricity sales.

For a full discussion of these risks, read As You Sow's information sheet (PDF).

For information on our coal ash program, please click here.