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PPL Corp Water Risk 2011

The U.S. electric power industry accounts for 41 percent of the country’s total freshwater withdrawals, requiring an estimated 136 billion gallons a day for generation and cooling. According to the DOE, “Water shortages, potentially the greatest challenge to face all sectors of the United States in the 21st century, will be an especially difficult issue for thermoelectric generators due to the large amount of cooling water required for power generation.”
Water scarcity is increasing and climate change is expected to exacerbate water shortages. According to the DOE’s U.S. Climate Change Science Program, “there is agreement among climate models that there will be a redistribution of water, as well as changes in the availability by season. As currently designed, power plants require significant amounts of water, and they will be vulnerable to fluctuations in water.”
Reduced water for cooling and higher water temperatures pose regulatory risk for electric utilities. U.S. regulations limit the temperature of water discharged by power plants in order to mitigate heat-related damage to aquatic species. A heat wave in August 2010 forced the Tennessee Valley Authority to decrease power generation for two weeks at three of its facilities, costing the utility an estimated $10 million in lost power production.
PPL Corporation’s generation mix is approximately 50% coal, and coal-fired power plants are major sources of heavy metal pollution in waterways, accounting for 94 percent of all water releases of arsenic in the United States. The EPA found ground and surface water contaminated by coal combustion waste (CCW) at over 60 sites.
CCW is likely to be regulated and coal ash impoundments are facing heightened scrutiny. PPL Corporation has four facilities with a high hazard potential rating from EPA. The EPA is considering whether to regulate CCW as hazardous waste and/or to regulate the structural integrity of coal ash surface impoundments through NPDES permits.
RESOLVED: The Board of Directors will provide a report to shareholders by November 1, 2011, prepared at reasonable cost and omitting proprietary information, disclosing how PPL Corporation plans to mitigate risks related to the use and disposal of water, including low flows, thermal impacts, and emerging regulations as they relate to the company’s operations and generation assets.
SUPPORTING STATEMENT: Utilities should provide information on all material water stresses caused by increased competition for water resources, emerging regulation, and changing climatic conditions. Material disclosures should include information on:
  • Water intensity of generation
  • Water sources and cooling systems for thermoelectric facilities
  • Water rights of major facilities
  • Any water-related shutdowns or reductions in generation
  • Proposed regulations that would require retrofitting of cooling systems
We also suggest that the report describe the company’s efforts, above and beyond current compliance, to reduce environmental and health hazards associated with CCW, including the implementation of caps, liners, groundwater monitoring, and/or leachate collection systems, and how those efforts may reduce legal, reputational and other risks to the company’s finances and operations