Southern Company: Request for Report on Increased Clean Energy Sources
The International Panel on Climate Change’s Fifth Assessment Report, “Climate Change 2013: The Physical Basis”, served to endorse the Copenhagen Accord (signed by the United States and one hundred fourteen other nations), which states that “[increases] in global temperature should be [kept] below two degrees Celsius” to avoid potentially devastating societal harm, and “deep cuts in global emissions are required”.
In its 2012 World Energy Outlook, the International Energy Agency (IEA) states, “No more than one-third of proven reserves of fossil fuels can be consumed prior to 2050 if the world is to achieve the 2 °C goal...” and “Almost two-thirds of these carbon reserves are related to coal...”.
In its 2013 Annual Energy Outlook, the U.S. Energy Information Administration forecast that US electricity demand will increase nearly 30% by 2040. It is consequently imperative that new energy demand be met with carbon free energy sources.
A 2013 report by Citi estimates that of the $9.7 trillion anticipated investment in power generation globally by 2035, 71% will be invested in renewables or clean technologies.
Price Waterhouse Cooper’s 2013 Global Power and Utilities Survey found that “Many in the industry expect the existing power utility business model … to transform … in the period betweennow and 2030” and “…that there is a significant degree of societal concern about extractive activities and a feeling that renewable energy … is here to stay.”
Utility association Edison Electric Institute’s report “Disruptive Challenges” warns that the electric power sector will suffer “irreparable damages to revenues and growth prospects” as widespread adoption of solar and distributed energy resources threaten utilities and that “disruptive challenges facing the electric utility industry ... all create adverse impacts on revenues, as well as on investor returns ..”. The report goes on to say “…the industry and its stakeholders must proactively assess the impacts and alternatives available to address disruptive challenges…” and concludes “Ultimately, all stakeholders must embrace change in technology and business models in order to maintain a viable utility industry.”
Shareholders request that the Southern Company prepare a report, reviewed by a board committee of independent directors, on policies the company could adopt to take additional near-term actions to reduce its greenhouse gas emissions consistent with the national goal of 80% reduction in greenhouse gas emissions by 2050. The report should be published by October 1, 2014 at a reasonable cost and omit proprietary information.
Such policy options shall consider innovative technologies and strategies for energy generation, such as placing greater emphasis on distributed clean energy sources or strategies to deploy centralized renewable energy generation in the Company's geographic region, as well as consideration of the most advanced practices and policies of utility peers in the US and worldwide.