60 Minutes aired an investigative segment on Duke Energy and their Dan River coal ash spill. Leslie Stahl did a very good job of asking tough questions, but gave Duke CEO Lynn Good more than enough opportunities to be proactive and change the direction of the company. Good did not embrace the opportunity.
Instead, she blamed industrial practices of the past and called for more studies on how to handle the coal ash problem. In essence, just buying more time for another coal ash disaster to occur. If I were a Duke Energy investor (which I am not), I’d be concerned about this attitude. As CEO, Good has a fiduciary responsibility to reduce the company’s risk, not just increase shareholder value. Her actions (or lack thereof) call into question her handling of shareholder risk. If I’m an insurer, I am having a hard time underwriting the risk posed by these coal ash ponds and probably I’m raising their premiums substantially!
What Good could have done is make a bold statement: Duke Energy is going to be proactive about coal ash and is currently making plans to remove all toxic coal ash from it’s facilities within the next 24 months. In addition, we are announcing an unprecedented investment in renewables and energy efficiency: from solar to wind to geothermal, we intend to put fossil fuels behind us and become a world leader in showing how a company can move forward do the right thing.Instead of creating a company of the future, Good is giving us more of the same: excuses and pollution.
David Crane, CEO of NRG Energy sees things very differently. In a letter to shareholders, Crane sees the need for energy companies to move forward, “There is no Amazon, Apple, Facebook or Google in the American energy industry today. There is no energy company that relates to the American energy consumer by offering a comprehensive or seamless solution to the individual’s energy needs. There is no energy company that connects the consumer with their own energy generating potential. There is no energy company that enables the consumer to make their own energy choices. there is no energy company that empowers the individual wherever they are, whatever they are doing for however long they are doing it.”
This idea of putting the consumer first is important – it is Duke’s consumers who have to deal with the effects of the energy company’s polluting ways. Crane points to future generations who will have to fix the mistakes of this one,“As we forge ahead, I am mindful of the fact that the next generation of Americans – the generation around my soon-to-be adult children – is different from you and I. Somehow, some way, the next generation of Americans became “all in” in their commitment to sustainability, in every sense of the word, including clean energy. With them, it is built into their DNA, not just learned behavior as it is for us.
And make no mistake about our children. They will hold all of us accountable – true believers and climate deniers alike. The day is coming when our children sit us down in our dotage, look us straight in the eye, with an acute sense of betrayal and disappointment in theirs, and whisper to us, “You knew… and you didn’t do anything about it. Why?” And for a long time, our string of excuses has run something like this: “We didn’t have the technology…it would have been ruinously expensive…the government didn’t make us do it…”
And while I do not agree fully with Mr. Crane, especially on the use of nuclear, he is making an effort to take the lead and be a change maker – something we at Krull & Company and our clients can applaud.
This time, CEO Good missed her chance to make positive change. However, each day provides her a new opportunity to shift Duke Energy away from primitive industrial waste practices. Let’s hope she seizes the next opportunity to do the right thing.