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March 24, 2011
Investors Note Success in Engagement on Water Issues
    by Robert Kropp

Ceres announces that resolutions on water management filed with three electric utilities have been withdrawn after successful engagement.

Shareowner engagement with energy companies has increased markedly this year. In mid-February, Ceres announced that resolutions addressing climate and energy had increased by 50% over 2010 totals, with 66 such proposals having been filed with 41 companies.

The resolutions include 29 filed with 19 electric power companies, addressing issues from water scarcity to management of greenhouse gas (GHG) emissions and mountaintop removal. Water scarcity in particular has gained increasing attention recently, as concerns about the effects on the resource by climate change and population growth led the
Carbon Disclosure Project (CDP) to launch its CDP Water Disclosure project.

According to a
press release this week from Ceres, "Prolonged droughts, growing water demand and climate change place increasing stress on water supplies and create challenges for electric power producers in many parts of the United States."

"Power plants, including nuclear, coal, oil and natural gas, account for 40 percent of the nationís freshwater withdrawals, requiring an estimated 136 billion gallons a day for generating and cooling the steam that drives electric turbines," the release continued.

Mindy Lubber, president of Ceres and director of the
Investor Network on Climate Risk, stated, "Water scarcity is a growing risk to many public utilities and investors want to know how companies are preparing for increased competition for supplies, emerging regulations and potential revenue losses from shortages."

In this week's press release, Ceres announced that coalitions of sustainable investors have succeeded in their engagements with three major electric utilities thus far, allowing the investors to withdraw shareowner proposals at those companies.

Office of the Connecticut State Treasurer was the lead filer of a resolution at Atlanta-based Southern Company. The company has agreed to prepare a report "describing its water management philosophy, water use and consumption by generation type, water discharges, and emerging risks, including water risks in its fuel supply chain," according to Ceres.

A resolution filed at Virginia-based Dominion by Ceres was withdrawn when the company agreed to report to CDP Water Disclosure on its water management practices.

At PPL, a resolution filed by
Miller/Howard Investments persuaded the company to include information on water intensity, water resources and cooling system types, and water rights in its corporate social responsibility (CSR) reporting.

Resolutions still on proxy ballots include a request that First Energy report on efforts to reduce water risks from its coal ash operations. In addition, a number of resolutions still outstanding address hydraulic fracturing, a drilling process which requires the injection of as much as 7.5 million gallons of water per well, as well as often toxic chemicals, to crack open rock and allow natural gas to flow to the surface.


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