It’s Getting Hot In Here

Yesterday I attended the Dynegy Corporation’s annual shareholder meeting to remind Fossil Fool of the Year Nominee Bruce Williamson it’s time to cancel plans to coal burning power plants. Dynegy is planning to become the next King Coal (pictured below, see more pictures of the protest here) by building six new coal plants, more than any other company or utility.

Like most share owner meetings, the event was designed as a corporate love-fest. Nancy Henchel, a Sierra Club volunteer, and I attended the meeting to speak on behalf of the NGOs calling for the cancellation of the coal plants. Since I called ahead and spoke with the Corporate Secretary, I was given a spot on the agenda to speak at the meeting and a packet of materials I prepared was distributed to each member of Dynegy’s Board of Directors.

CEO Bruce Williamson’s presentation included a 7 or 8 min piece focused on their work to decrease their plants’ pollution output. This mainly focused on reducing NOX and SOX, although one sentance about climate change and a discussion about “increased barriers to entry for building new coal plants” (due to financing/ the capital market crises and future regulation) was mentioned. The presentation also mentioned the company’s focus on “diversification of fuel sources,” although the graph that was up during this discussion showed energy production from only coal and natural gas. During the question and answer period I pointed out that this was not a truely diverse portfolio, since it excluded renewables, the only type of energy production that has no carbon risk. Williamson’s response to this was that they only build new plants which have long-term buyers lined up in advance and if he could find someone willing to buy a long-term contract for a renewable facility, he would consider building a production facility to meet that contract.

Then I had a chance to make my presentation, which focused on the climate risks that shareholders will have to deal with:

We, as Dynegy Shareholders, will have to deal with the negative financial consequences of a large coal portfolio when carbon regulation is implemented. Thankfully, this impending regulation does not have to hurt the company. Renewable energy sources like wind are demonstrating increased profitability with each year that passes.

Coal is last century’s technology. Renewable Energy is the future. Dynegy can invest in the past or lead the way to a new energy economy. The choice is yours.

Click “Read more” for the full text of my statement. CEO Williamson thanked me for my comments but did not respond directly. Nancy Henchel then spoke from the heart about her concerns, which focused on the health and well being of future generations

I’m glad that I got the chance to deliver the message of No New Coal to the inside of the corporate beast. I’m confident that we made it a bad media day for Dynegy and shifted the focus from profits to climate change the people it effects. The power that I had inside the corporate boardroom was that I represented not only the 10,000 Co-op America members that signed my letter, but a movement that has held two Step It Up events in over a thousand communities nationwide, a movement that has convinced the Supreme Court, the leader of the House and Senate, and every major presidential candidate that carbon must be cut 80% by 2050. I got inside the belly of the beast and I told them that our government is going to regulate carbon and that we are going to continue to fight every plant they proposed until they invest in renewable energy instead. I only have that power because of the work that we all do together. So keep up the good work and keep on organizing!

My statement to Dynegy:

Good morning Mr. Williamson, members of the Board and my fellow shareholders. My name is Yochanan Zakai and I am here to speak on behalf of Co-op America and the Sierra Club, two nonprofit organizations which have gathered over ten thousand signatures calling upon Dynegy to cancel plans to build new coal-fired power plants and instead make a serious investment in renewable energy. Outside this meeting one hundred leaders from the six communities in which Dynegy plans to build new coal plants have gathered to ask you not to build new coal plants in their communities.

I would like to commend you for listening to your shareholders and agreeing to investigate adopting greenhouse gas reduction goals. I look forward to reading the report’s conclusions, but this first step in addressing climate risk does not go far enough to protect the value of the company.

Coal-burning power plants are not a viable long-term means of providing safe and affordable energy. Coal-fired power plants produce about 40% of the CO2 emitted in the U.S. and there is legislation pending before congress to cut carbon emissions 80% by 2050.

Many voices are calling for carbon regulation:

• Supreme Court has declared that carbon is a pollutant and ordered the EPA to regulate it.
• Utilities such as Duke Energy and Pacific Gas and Electric are calling for government regulation of carbon
• Senate Majority Leader Harry Reid said, quote “There’s not a coal-fired plant in America that’s clean. They’re all dirty.”
• Every major presidential candidate supports a cap on carbon.

Considering the inevitability of impending carbon regulation it is surprising that Dynegy is proposing to build more new coal-fired power plants than any of its competitors.

Why does Dynegy continue to make investments in coal when its competitors are abandoning their plans for new coal plants?

Now is the time to cancel plans to build dirty coal plants. Proposals now before congress will tax all carbon sources, including those power plants already built. According to Speaker Nancy Pelsoi, there will be no “grandfathering” of existing plants out of carbon regulation.

If Dynegy builds six new coal plants the company will face higher costs once carbon regulations are implemented. These are costs your competitors, who have already shunned new coal, will not have to deal with in their new facilities.

We, as Dynegy Shareholders, will have to deal with the negative financial consequences of a large coal portfolio when carbon regulation is implemented. Thankfully, this impending regulation does not have to hurt the company. Renewable energy sources like wind are demonstrating increased profitability with each year that passes.

Coal is last century’s technology. Renewable Energy is the future. Dynegy can invest in the past or lead the way to a new energy economy. The choice is yours.