FirstEnergy Corp to Transition to Dry Storage of Coal Ash
Shareholders press coal utilities to mitigate ash-related risks after TVA disaster
January 28, 2010 - FirstEnergy Corp*, an Akron, Ohio-based utility, is planning to stop pumping coal ash into the 1,000-acre pond at its Bruce Mansfield Plant in Shippingport, PA and transition to a dry method of waste storage, according to investors withdrawing a shareholder proposal on coal ash from the company today.
“We commend FirstEnergy for taking action to mitigate the risks associated with wet storage of coal ash by transitioning to dry storage for all of its facilities,” says Emily Stone of Green Century Capital Management (Green Century), lead shareholder on the proposal. “We will continue to pressure the company to fully dewater the Little Blue Run pond as it finalizes its closure plan.” Other shareholders that filed the resolution include Trillium Asset Management Corporation, the Camilla Madden Charitable Trust, and Catholic Healthcare Partners.
Coal ash is a by-product of burning coal that contains arsenic, mercury, heavy metals and other toxins filtered out of smokestacks by pollution control equipment. The toxins in coal ash have been linked to cancer, organ failure, and other serious health problems. Ash is often stored in enormous quantities in landfills, impoundment ponds or abandoned mines, many of which lack adequate linings that prevent leaching of these components into groundwater.
The Tennessee Valley Authority’s (TVA’s) 1.1 billion gallon coal ash spill in December 2008 that covered over 300 acres in eastern Tennessee with toxic sludge highlights the serious environmental and financial risks associated with coal ash. TVA has estimated a total cleanup cost of up to $1.2 billion, not including the extensive legal claims that have arisen in the spill’s aftermath.
According to Green Century, FirstEnergy was not the only company to receive inquiries or shareholder proposals about coal ash. Investors in major coal utilities, including Southern Company* and CMS Energy*, have been urging the companies to mitigate risks associated with the storage of coal ash.
“Recent events, including the disastrous Tennessee Valley Authority spill, reports of health problems in communities that store ash, and the U.S. EPA’s decision to reassess the hazardous nature of coal waste, highlight the potential financial liabilities associated with storing coal combustion waste,” says Dan Bakal of Ceres, a coalition of investors and environmental groups that is participating in the effort.
Beyond the risks associated with coal ash spills, shareholders argue there are additional financial risks related to the contamination of local water supplies, and concerns have been raised about public health and environmental hazards from the re-use of dry ash for purposes like agriculture and landscaping.
The EPA has found evidence at over 60 sites in the U.S. that coal ash has polluted ground and surface waters. While public health concerns have been raised about both wet and dry storage, storing dry coal ash in securely lined and capped landfills is a “best practice” for risk mitigation as it minimizes the possibility of contamination or spills. Investors will continue to engage with companies to encourage the implementation of this “best practice” and to give serious consideration to dewatering any existing wet impoundments
“Shareholders are concerned about the lack of disclosure on this issue – we don’t see much evidence that companies are actively managing ash-related risks,” notes Amy Galland of As You Sow, a group that filed shareholder proposals on coal ash at MDU Resources* and CMS Energy. “FirstEnergy’s decision to discontinue wet ash storage at its only remaining non-dry storage site and to implement a long-term strategy of using only dry storage sets an example for the industry. We urge all utilities to increase disclosure and take steps to mitigate risks associated with coal ash, such as implanting secure dry storage and safe reuse.”
*As of December 31, 2009, neither the Green Century Equity Fund nor the Green Century Balanced Fund was invested in FirstEnergy Corp, Southern Company, CMS Energy or MDU Resources. Portfolio composition will change due to ongoing management of the Funds. Please refer to the Green Century Funds website for current information regarding the Funds' portfolio holdings. These holdings are subject to risk as described in the Funds' prospectus. References to specific investments should not be construed as a recommendation of the securities by the Funds, their administrator, or their distributor.
Green Century Capital Management is an investment advisory firm focused on environmentally responsible investing. Founded by a partnership of non-profit environmental advocacy organizations in 1991, Green Century's mission is to provide people who care about a clean, healthy planet the opportunity to use the clout of their investment dollars to encourage environmentally responsible corporate behavior. Green Century believes that shareholder advocacy is a critical component of responsible investing and actively advocates for greater corporate environmental accountability.
Ceres is a national coalition of investors, environmental groups and other public interest organizations working with companies to address sustainability challenges such as global climate change. Ceres directs the Investor Network on Climate Risk (INCR), a group of more than 80 institutional investors from the US and Europe managing approximately $8 trillion in assets.
You should consider the Green Century Funds’ investment objectives, risks, charges, and expenses carefully before investing. For a prospectus that contains this and other information about the Funds, call 1-800-93-GREEN, visit www.greencentury.com or email firstname.lastname@example.org. Please read the prospectus carefully before investing.
The Green Century Funds are distributed by UMB Distribution Services, LLC 2/10
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