Berkshire Energy GHG Reduction Goals
|Company||Berkshire Hathaway Inc.|
|Filer||Meyer Family Enterprises, LLC|
|Subject(s)||Air Pollution; Greenhouse Gas Emissions; Renewables|
|Resolved Clause Summary||Set GHG Reduction Goals for Electric Utility Subsidiaries|
RESOLVED: That Berkshire Hathaway Inc. (“Berkshire”) establish reasonable, quantitative goals for reduction of greenhouse gas and other air emissions at its energy-generating holdings; and that Berkshire publish a report to shareholders by January 31, 2015 (at reasonable cost and omitting proprietary information) on how it will achieve these goals – including possible plans to retrofit or retire existing coal-burning plants at Berkshire-held companies.
Berkshire Hathaway owns MidAmerican Energy Holdings (“MidAmerican”), whose subsidiaries have historically generated roughly 47% of their electricity burning coal. With appreciation for MidAmerican’s recent investments in renewable generation, coal-burning plants continue to create liabilities.
Electricity generation accounts for more carbon dioxide (“CO2”) emissions than any other sector – more, even, than transportation or industry. US fossil fuel-powered plants (like MidAmerican’s) account for nearly 40% of domestic and 10% of global CO2 pollution. Independent economists and scientists state that cutting greenhouse gas emissions in the near-term is far more cost-effective than paying for greenhouse gas-related damage in the future.
Therefore, it serves Berkshire shareholders to take proactive steps that avoid greenhouse gas emissions and impending regulation. This is important to independent shareowners. In 2013, 34.4% of independent shareholders (shares not owned by Berkshire boardmembers or executive officers) ignored the Board’s recommendation against this request for reasonable goals and thoughtful planning.
Some companies feel no qualms about reaping profits from coal-burning electricity plants while imposing the costs of pollution and harms to public health onto society at large (“externalizing” costs). But with Berkshire, externalizing costs of coal-burning subsidiaries can result in damage that boomerangs back on the company – in harm to employees at MidAmerican plants, and through claims paid by Berkshire insurance subsidiaries.
The US Environmental Protection Agency, under the Clean Air Act, now requires new or modified electricity-generating plants to limit greenhouse gas emissions. They issued two significant rules, which together set stringent limits on a range of harmful emissions from power plants.
When both rules are fully enforced, Bernstein Research estimates that 15% of coal-fired power plants will be forced to close – unable to meet new safety standards – or will require substantial new investment to remain viable.
Numerous peers to Berkshire’s MidAmerican have established plans to replace their coal-fired plants – including Calpine Corporation, Progress Energy, and Xcel Energy. Other peers have set concrete targets for reducing greenhouse gas emissions – including American Electric Power, Consolidated Edison, Duke Energy, Entergy, Exelon, and National Grid. Still other peers have set greenhouse gas intensity targets – including CMS Energy, NiSource, Pinnacle West, and PSEG Power.
These forward-looking companies recognize that using natural gas, efficiency, and renewable energy are more profitable than retrofitting coal-fired plants – which are seen as being obsolete, inefficient, and highly polluting.
Following MidAmerican’s investment in renewable generation assets, shareholders need amplification on Berkshire’s overall plan to respond to climate disruption. Therefore, please vote FOR this reasonable request for planning.