November 20, 2019 / 12:05 PM / 19 days ago

NYC pension leader targets three utilities over emissions plans

BOSTON (Reuters) - New York City’s top pension official has called on three major U.S. utilities to name independent board chairs, pressuring them to “decarbonize” their operations by 2050 and underscoring how power companies have split on whether to set such goals.

New York City Comptroller Scott Stringer, who oversees about $208 billion in retirement assets, recently filed shareholder resolutions at Southern Co, Duke Energy Corp and Dominion Energy Inc.

The resolutions call for shareholder votes on whether to name independent individuals to chair boards currently led by the chief executive of each company. The change would be “useful to oversee the strategic transformation” of the companies to operate in a low-carbon economy, according to the resolutions, seen by Reuters.

U.S. power utilities have largely embraced the idea of cutting emissions to slow climate change, but have split on what exact targets to spell out.

A number of utilities, including Xcel Energy Inc and NRG Energy Inc, plan to end emissions by 2050 by using more solar or wind power, retiring coal-burning plants, or reaching “net-zero emissions” with offsets like restoring forests to remove carbon from the atmosphere.

Some experts have questioned, however, if new technologies for nuclear power, battery storage or carbon capture will be ready in time to make a 2050 target realistic. (bit.ly/35cRFik)

Southern and Dominion have both outlined plans to reduce carbon emissions but have not pledged to end them by 2050. To achieve such a state, “technology will have to evolve beyond where we are today,” Dominion CEO and Chairman Thomas Farrell said at a March investor meeting.

A Dominion spokesman said the company is reviewing Stringer’s proposal.

A Southern company spokesman said it is reviewing Stringer’s proposal. “We regularly engage with our shareholders and look forward to having a dialogue regarding these matters as well,” said the spokesman.

Duke said in September it aims to reach net-zero carbon emissions by 2050. Stringer’s proposed resolution acknowledges the step but notes the utility’s continued spending on natural gas infrastructure.

A Duke spokesman said the utility is reviewing the proposal.

The majority of S&P 500 companies have an independent board chair, according to Stringer’s office, viewed as a way to improve corporate oversight.

Calls to separate the roles of chair and CEO have become a flashpoint at some annual meetings, such as at JPMorgan Chase & Co, whose leader, Jamie Dimon, won bruising votes to keep both roles.[reut.rs/359MIqK]

The resolutions mark an escalation from the approach Stringer and other investors took for the 2019 proxy season, when they only requested utilities move to net-zero emissions by 2050.[nL1N20M1X7]

Reporting by Ross Kerber; Editing by Dan Grebler

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