Last Friday, New York Attorney General Andrew Cuomo sent subpoenas to five power generating companies seeking to find out if the companies had properly disclosed financial risks associated with proposed new coal-fired power plants.
We are aware that Dominion Resources, Inc., (“Dominion”) has plans to build a coal-fired electric generating unit that would generate 585 megawatts of electricity without current plans to capture and sequester the resulting carbon dioxide (CO2) emissions. The increase in CO2 emissions from the operating of this unit, in combination with Dominion’s other coal-fired plants, will subject Dominion to increased financial, regulatory, and litigation risks. We are concerned that Dominion has not adequately disclosed these risks to its shareholders, including the New York State Common Retirement Fund, which is a significant holder of Dominion stock. Pursuant to the Attorney General’s investigatory authority under New York General Business Law § 352, and New York Executive Law § 63(12), accompanying this letter is a subpoena seeking information regarding Dominion’s analysis of its climate risks and its disclosures of such risks to investors.
A little later, the letter gets more specific: “For example, any one of the several new or likely regulatory initiatives for CO2 emissions from power plants – including state carbon controls, EPA’s regulations under the Clean Air Act, or the enactment of federal global warming legislation – would add a significant cost to carbon-intensive coal generation, such as the new coal plant planned by Dominion.” In addition to Dominion, the NYAG’s office sent subpoenas to AES, Dynegy, Peabody, and Xcel. Here is the story from the New York Times.
The letter doesn’t say so explicitly, but I’m sure the message was clear, that in addition to new or likely legislative actions and substantive regulatory initiatives, the companies also faced the risks and costs associated with being harassed by swarms of officers from the NYAG’s office.
The NYAG suggests that investors in the companies — the New York State Common Retirement Fund apparently among them — may be unaware of global warming or that policymakers around the country may try to do something about it or that the generating companies in which they are investing might be affected by this potential legislation. If the NYAG is concerned that the state employee’s retirement fund is inadequately informed about the companies they invest in, maybe they should be sending a letter to the retirement fund directly. Meanwhile, if the NYAG isn’t happy with current federal and state global warming policies, it should take up its case with federal and state legislators.
This is no way to do energy policy.