Dominion Subpoenaed; Reduces Price of CFLs
Posted by Paul on 20 Sep 2007 | Tagged as: Coal, Virginia
Here is a shocker, Dominion Power, the energy mogul that is pressing hard to build a new coal fired power plant in Wise, Virginia, is not properly accounting for the financial risks associated with, as a business, refusing to evolve and properly assess reality. Could it be true that a major polluter is acting unscrupulously, profiting off of misleading investors and ignoring the real world? According to the New York Attorney General Andrew Cuomo, maybe. According to the Attorney General, “The increase in [carbon-dioxide] emissions from the operation of this unit [the proposed Wise Co. Plant], in combination with Dominion’s other coal-fired power plants, will subject Dominion to increased financial, regulatory and litigation risks.”
Basically, I read Cuomo’s statement to mean, “hey Dominion, building another coal power plant are you kidding me? You know that legislation to regulate global warming emissions is coming soon, why are you going to build another super polluter? You know you can’t realistically sequester carbon from the plant, don’t even kid yourself. Why don’t you just do something less radical, like start building wind turbines or solar panels or investing in efficiency. Now that would be a plan we could all get behind.”
To help further illustrate my point, I will throw out some fun analogies. Coal is to power production as Asbestos is to insulation — it works, but you don’t want to use it. New coal power is as good an idea as reviving phrenology evaluation to help supplement student applications to college. Okay, that second one wasn’t as good as the first, but you get the point. Let me know if you have any good analogies about coal you want to pass on, I love analogies.
Oh, I try to never get totally negative with my blog posts, so here is the positive. Dominion is helping to offer CFL light bulbs at a discounted rate. That is one small step for man…
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5 Comments »
on 20 Sep 2007 at 11:51 am 1.shannon said …
Some of the discussions on Capitol Hill involve giving away free pollution credits for greenhouse gases- a company like Dominion would benefit if it increased pollution now. It’s really important to send a message to Congress that free greenhouse gas credits under a cap and trade system are not acceptable. Lieberman originally had 76% free credits in his cap-and-trade system that he and Warner proposed and is now considering 100% auction- see Hill Heat at http://www.hillheat.com/articles/2007/09/19/lieberman-open-to-100-auction.
on 20 Sep 2007 at 6:10 pm 2.KenG said …
While I’m in general agreement that Dominion shouldn’t be building more big coal plants, there’s something about this story that bothers me. It seems that Cuomo has a very thin basis for this case. He is suggesting that potential investors in new coal plants may be ignorant of the global warming issue and that Dominion has a legal duty to inform them of this. Seems a bit of a stretch.
I see this as a clear case of “ends justifying the means” which is a very dangerous path. What if this was applied to warning everyone that the energy saving and environmentally friendly actions being promoted may not, in their case, actually work? When do we get to a point that we have no rules as long as the results match our personal goals?
on 21 Sep 2007 at 11:37 am 3.Nuclear Energy Institute said …
CCAN on New Nuclear Build…
Here's something that might be of interest to the friends of the nuclear power plants at Calvert…
on 21 Sep 2007 at 12:06 pm 4.Paul said …
Thanks for the comment KenG. My impression of why Cuomo brought up his case was due, not to the fact that Dominion fails to properly inform people about how bad coal fired power plants are for the climate, but rather because there is a potentially major financial liability to investors if new regulations are imposed that make operating a heavily polluting conventional power plant very expensive.
For example, lets just say that CCAN was able to pass a bill in Virginia General Assembly that alloted huge subsidies for renewable energy production while mandating that all coal fired power plants either be installed with “carbon sequestering technology” or get shut down. If this was to happen, the profits of a company that was disproportionately invested in coal would be subjected to a huge financial burden that would most likely affect the profit margin of that group and their investors; whereas companies invest in renewable energy would suddenly see their profits go way up.
Though legislation like this has not happened in Virginia or nationally, it is not out of the realm of possibility and moreover, it seems to be getting more likely by the day that good legislation like this will pass sometime in the foreseeable future. The problem that the Attorney General has with Dominion, as I read it, was simply that they are ignoring this fact and not disclosing the honest assessment of the future of coal based energy in America. In accounting terms, coal fired power plants are becoming a potential financial liability that investors need to know about. It would be like Phillip-Morris and RJ Reynolds not disclosing information about potential lawsuits due to smoking related deaths or how their profit margins may be affected when cigarette taxes rise.
In the end, it is not about right or wrong, what works and what doesn’t — it is about properly assessing and disclosing the realities of the world in which your business operates, something that the Attorney General doesn’t feel as though Dominion is doing all that well.
on 21 Sep 2007 at 2:03 pm 5.KenG said …
I have to speculate on this without knowing exactly what is in the financial offerings, but Cuomo’s charges are under the Martin Act that requires a reasonable disclosure of risk. He didn’t just go after Dominion, he filed against the 5 largest coal plant developers in the country. This tells me he’s taking the approach that no fossil fueled plan has adequate disclosure. I still have trouble believing that someone like Dominion actually has information to disclose that’s better than the publicly available information since it’s all at the whim of the lawmakers. What does this type of lawsuit gain?