Attorney General Cuomo, Joined By Vice President Gore, Announces Agreement With Major Energy Company, Dynegy Inc.
NEW YORK, N.Y. (October 23, 2008) – The N.Y.S. Attorney General, joined by Vice President Al Gore, today announced an agreement that requires a national energy company, Dynegy Inc. (“Dynegy”), to disclose timely and relevant information to investors about climate change risks.
“This agreement follows our landmark settlement with Xcel Energy and helps protect investors by ensuring disclosure of potential financial risks that climate change may pose,” said the Attorney General. “Today we raise the bar in the industry and ensure transparency and disclosure in the marketplace. Investors have the right to know all the material financial risks faced by coal-fired power plants associated with global warming and I hope and expect that other companies will follow the lead of Dynegy and Xcel. I commend and applaud Dynegy for working with my office to establish a standard that will improve our environment and our marketplace over the long-term.”
Vice President Al Gore said, “Today’s settlement is a key step in the effort to solve the climate crisis. It requires one of our nation’s major energy companies to fully disclose to investors - from Wall Street to Main Street - the financial risks that come with building new coal-fired power plants. I applaud the Attorney General for his leadership in engineering a new model to combat global warming.”
The Attorney General also noted that Dynegy had cooperated fully with his Office’s inquiry.
Under the agreement, Dynegy has agreed to provide disclosure of material risks associated with climate change in its “Form 10-K” filings, the annual summary report on a company’s performance required by the Securities and Exchange Commission (“SEC”) to inform investors. These required disclosures include an analysis of material financial risks from climate change related to:
- present and probable future climate change regulation and legislation;
- climate-change related litigation; and
- physical impacts of climate change.
Additionally, Dynegy has committed to a broad array of climate change disclosures including:
- current carbon emissions;
- projected increases in carbon emissions from planned coal-fired power plants;
- company strategies for reducing, offsetting, limiting, or otherwise managing its global warming pollution emissions and expected global warming emissions reductions from these actions; and
- corporate governance actions related to climate change, including if environmental performance is incorporated into officer compensation.
Substantial financial risks for energy companies that emit large quantities of carbon dioxide are being created by a number of new or likely regulatory efforts, such as New York’s newly adopted regional carbon regulations for power plants, and other future regulatory efforts, including federal regulation, Congressional action, and climate-change related litigation. These risks are exacerbated for power companies that are building new coal-burning power plants or other large new sources of global warming pollution emissions. Knowledge of material risks is important for investors to consider.
Dynegy produces and sells electric energy, capacity, and ancillary services in many U.S. markets. Dynegy’s power generation portfolio consists of more than 18,000 megawatts of baseload, intermediate, and peaking power plants fueled by a mix of natural gas, coal, and fuel oil. Dynegy also owns a 50 percent interest in a development joint venture platform that currently includes approximately 6,400 megawatts of potential new site projects, including coal and gas initiatives, and approximately 3,100 megawatts of natural gas-fired repowering, solar, and efficiency initiatives at existing operating facilities in the portfolio. In addition, Dynegy owns minority interests in two coal-fired power plants currently under construction and is presently planning additional such plants. Dynegy’s annual revenues exceed $700 million.
In September 2007, the N.Y.S. Attorney General subpoenaed the executives of several major energy companies for information on whether disclosures to investors in filings with the SEC adequately described the companies’ financial risks related to their emissions of global warming pollution. the N.Y.S. issued subpoenas under New York State’s Martin Act, a 1921 state securities law that grants the Attorney General broad powers to access the financial records of businesses.
In August 2008, the N.Y.S. Attorney General announced an agreement with one of the subpoenaed companies - Xcel Energy - requiring the company to disclose the financial risks that climate change poses to its investors. Xcel Energy is building a new 750 megawatt, coal-fired power plant in Pueblo, Colorado.
In addition to Dynegy and Xcel, the companies that received subpoenas were AES Corporation, Dominion Resources, and Peabody Energy. The Attorney General’s inquiry regarding these remaining companies is ongoing. The N.Y.S. Attoeny General and others also petitioned the SEC last year to improve corporate disclosure of climate-related risks in securities filings.
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