Shareholders attending Dominion’s shareholder meeting last week once again raised questions about the utility giant’s dependence on fossil fuels in a carbon-constrained world. Guest blogger Seth Heald brings us this view from inside the meeting.
News coverage of Dominion Resources Inc.’s May 6 annual shareholders meeting focused on the demonstration held outside the company’s suburban Richmond training facility. More than 150 people had traveled from all over Virginia and beyond to wave signs and banners protesting Dominion’s planned Atlantic Coast Pipeline for fracked natural gas and its unhealthy dominance over Virginia politicians (on full display during this year’s General Assembly session). Other signs condemned Dominion’s role as a major carbon polluter and its membership in the American Legislative Exchange Council (ALEC).
But developments inside the meeting, which I attended, were newsworthy too.
Like all publicly traded corporations, Dominion holds an annual meeting where shareholders vote on significant issues and have a chance to hear from and question corporate management. Most shares are voted online or by mail, but some shareholders choose to come to the meeting in person. Over the years Dominion has encouraged its electricity customers to buy stock, so many company shareholders live in Virginia.
Only shareholders or their proxies may attend the meeting, and this year security was exceptionally tight. Attendees had to show their admission ticket and driver’s license at three separate places and then go through a metal detector before getting to the meeting. No cameras, cell phones, or recording devices were permitted.
This was my third straight Dominion shareholder meeting. Perhaps most notable this time was the large number of people who lined up to address Dominion CEO and board chairman Thomas F. Farrell II, who told shareholders the company had allotted 30 minutes for their comments and questions. In previous years half an hour was more than enough time for all shareholder comments. But this time it was immediately clear that Farrell would have to allow more time or else those at the back of the line wouldn’t be able to speak. To his credit he allowed all waiting in line a chance to speak. The whole comment process took about an hour, causing the meeting to run significantly longer than in previous years.
Under Dominion’s standard meeting procedure, Farrell stands on the stage facing the audience, and people with comments or questions must deliver them from a microphone at the back of the large room, perhaps 50 feet away from Farrell. Members of the company’s board of directors all sit together in the front row, with their backs to the audience. Several of the shareholders this year spoke against the proposed Atlantic Coast Pipeline, describing how it would harm their land or their region or the planet. One woman movingly described how the pipeline would ruin land that had been in her family for hundreds of years. Many shareholders in the audience turned in their seats to look at the speakers, but not the board members. They sat in the front row and looked straight ahead.
Shareholders voted on a number of resolutions that asked the board or the company to take various actions. The ballot indicated that the board opposed all resolutions that had been submitted by shareholders. Nevertheless, three climate-related shareholder resolutions improved their vote count this year over last. For the first time ever one of them—seeking a report on emissions of the potent greenhouse gas methane—got 25 percent of voting (i.e., non-abstaining) shares, up from 21 percent a year ago.
Doing almost as well were shareholder votes seeking reports on climate-change business risk (23.5% this year versus 21 percent last year) and burning wood to generate electricity (22 percent this year versus 21 percent last year).
These are far from a majority of voting shares, it’s true, but these percentages represent close to $6 billion worth of shareholder value, and the totals are impressive when one considers that many large mutual funds routinely vote against resolutions that are opposed by a company’s board.
In opening comments to the board and shareholders Farrell spoke about efforts to reduce “carbon intensity” in electric power generation. That’s a measure comparing quantity of carbon-dioxide emissions to quantity of electricity produced. Dominion representatives always like to talk about how they’re reducing carbon intensity. They rarely if ever talk about reducing the company’s total carbon emissions.
Reducing carbon intensity is a fine thing, but the trouble is that you can reduce carbon intensity modestly just about forever while still increasing total carbon-dioxide emissions. That’s particularly true if, like Dominion, you resist meaningful efforts to make energy efficiency a significant part of your generation mix. As the Washington Post’s Chris Mooney has noted, doing something about climate, even doing a lot, isn’t the same as doing enough. Dominion and its ALEC partners who reflexively attack the EPA’s climate efforts are still resisting doing much of anything significant on climate, much less doing a lot, or enough.
What affects the climate is the total amount of carbon dioxide (and other greenhouse gases, like methane) in the atmosphere. At some point—and climate science tells us we’re well past that point—you can’t claim to be serious about climate change unless you’re willing to talk about (and commit to) reducing total carbon emissions, not just carbon intensity.
That was the subject of a shareholder question from Lindsay Mendoza of Mercy Investment Services, Inc., which manages assets of The Sisters of Mercy, the 180-year-old Catholic order renowned for its work in social justice, health care, and education. Mendoza asked Farrell when Dominion would begin to reduce total carbon-dioxide emissions, as opposed to carbon intensity. Farrell quickly responded: “That’s a good question.” (An overused cliché, no doubt, but Farrell seemed sincere in saying it, and he did not give that response to any other shareholder.) He went on at some length to discuss the company’s activities, but he didn’t specify a year, or decade, or even a century in which Dominion’s total carbon-dioxide emissions might actually begin to decline. That’s particularly disappointing in light of Dominion’s ranking, based on emissions reported to the EPA, as Virginia’s top carbon polluter.
Shareholders can try to press Farrell for a more specific answer at next May’s annual meeting. But in the meantime, asking Dominion and its board when the company will begin to reduce the company’s total carbon-dioxide emissions is a “good question” that Virginia’s governor, legislators, and the State Corporation Commission (Dominion Power’s state regulator) ought to be asking.
Besides being a Dominion shareholder, Seth Heald is Vice Chair of the Virginia Chapter of the Sierra Club and a student in the MS in Energy Policy and Climate program at Johns Hopkins University.