NWE Sample Letter #01

The most important thing Northwestern can do is to spell out its plan of action [budgeting/investment] for getting its operations to zero emissions from the combustion of fossil fuels. The need for transition away from carbon emissions has been evident for years, and the risks that emissions bring to physical assets is an increasingly stated concern in financial as well as environmental circles.

On August 21, 2009, The Wall Street Journal reported that “…many scientists say deep emissions cuts are necessary … to prevent … dangerous consequences of global warming,” and also reported that,  “Getting from here to there would require a massive economic shift.”

In just these few words, the Journal succinctly reported the dangerous trend of rising emissions, identified the means and scale necessary to contain it, and did that 10 years ago. The details on either the science or economic side of this critical equation can be dazzling, but, then as now, the necessary scale of economic shift was and is a shift away from the emissions produced by combustion of fossil fuels, with an accompanying shift to renewables including solar and wind.

Northwestern Energy has had these intervening 10 years to join with that necessarily large scale shift away from carbon emissions, and into renewables including solar and wind. In that period, researchers have found that heat-related heart attacks are increasingly frequent <<https://www.eurekalert.org/pub_releases/2019-03/hzm–cch031219.php>> and the heavyweight science journal Nature ran an editorial in 2017 saying “A death zone is creeping over the surface of Earth, gaining a little more ground each year <<https://www.nature.com/news/heatwaves-to-soar-above-the-hot-air-of-climate-politics-1.22164>>, “ with both trends driven by a prolonged dependency on combustion of fossil fuels. Northwestern was a participating contributor to that combustion all through the 10 year period.

While Northwestern Energy drags its feet on joining the necessary scale of shift to solar and wind (in combinationwith storage including batteries — of course), climate conditions shaped by continued combustion of fossil fuels threatens forest recovery after fire by snuffing tree seedlings in droughty soils<<https://www.eurekalert.org/pub_releases/2019-03/tuom-uss031219.php>>.  At the same time, the Bulletin of the American Meteorological Society has published evidence that coal-fired power plants can redistribute where the rains fall, potentially leaving some areas in drought while others flood <<https://www.eurekalert.org/pub_releases/2019-03/fu-cps030919.php>>.

The heat is on, but Northwestern Energy has still not made commitment to join the necessary scale of shift away from fossil fuels, leaving it a laggard when leadership is increasingly valuable — and valued. For instance, major US pensions have been gently nudging US utilities to at least ‘fess up about the utilities’ own exposure to the array of risks associated with carbon emissions <<http://ieefa.org/u-s-pension-funds-push-big-utilities-to-adopt-carbon-free-generation-plans/>>. Others, sensing costly exposure of their own assets, have been more forceful, going over the utilities’ head to governments, in order to push for the needed economic shift. For example, the Institutional Investors Group on Climate Change, a group of 415 investment firms managing combined assets worth more than twice the size of the entire Chinese economy, recently told governments to 1- back away from reliance on thermal coal, and to 2- give up subsidizing all fossil fuels, and to 3- get on with putting a price on carbon <<https://www.cnn.com/2018/12/10/business/climate-change-investors-cop24/index.html>>.

Northwestern Energy dithers, and thus continues its contribution to the emissions problem. Meanwhile, World Finance magazine recently pointed out that, “It is becoming more and more apparent that the developing threat of climate change is not simply damaging the earth’s natural ecosystem, but is also harming the world economy <<https://www.worldfinance.com/markets/climate-change-continues-to-wreak-havoc-on-the-global-economy>>.”

Northwestern talks of providing energy at least cost. Least cost for whom? The cost that carbon emissions impose on the the economy can’t be dismissed. Indicating this risk specifically for the US economy, a 2018 Federal Reserve Bank of Richmond staff analysis found that even a modest one degree Fahrenheit temperature increase begins to take the wind out of the economy’s sails. In fact, the study found evidence that “rising temperatures could reduce U.S. economic growth by up to one-third over the next century <<https://doi.org/10.21144/wp18-09>>.”

The concern didn’t stop with that one report. In January 2019, American Banker magazine warned that “The planet is warming at an alarmingly rapid rate, and unless swift action is taken to curb the emission of greenhouse gases, the economic costs will be severe”<<https://www.americanbanker.com/news/why-banks-should-stress-test-for-climate-change

Citing “huge costs seen in climate inaction,” Business Insurance magazine points directly to what we all face if we fail to stop “the potential dire economic consequences of climate change <<https://www.businessinsurance.com/article/00010101/NEWS06/912325939/Huge-costs-seen-in-climate-inaction>>

The Bloomberg Climate Changed newsletter summarized the situation on February 7, 2019: “The last five years were collectively the world’s hottest on record. That warming, which NASA and NOAA directly link to human activity, has immediate financial consequences.” 
The summary added that “Climate change isn’t just an expanding threat to the environment; it’s already a massive drag on the economy.”
As things stand now, Northwestern policy and practice are even a drag its renewable energy from hydropower, as carbon emissions lead to declining flow of rivers including the Missouri River<<https://www.latimes.com/nation/la-na-missouri-river-20140817-story.html>>. This will be a drag on Northwestern’s own economy for a long time ahead, and you need to act now to limit the damage.

All the above reflect a “performance standard” implicit to Northwestern Energy policy and practice to date. It’s not an enviable performance, but instead places Northwestern as a contributor to a broad array of emissions-driven dangers. Investors have begun looking for a better standard <<https://www.barrons.com/articles/future-returns-how-to-incorporate-esg-strategies-01552405734?>>. Northwestern cannot remain behind this developing curve, and maintain much hope for investor confidence as the climate trends continue to worsen.

While Northwestern still shies from necessary scale of commitment to solar and wind (with storage, of course),  other energy utilities are “turning to solar, increasing the scale of their aggregate PV portfolios more than sixfold in five years<<https://www.pv-magazine.com/2019/03/08/solar-becomes-a-must-have-for-utilities/>>.”

Instead, Northwestern talks of building natural gas plants. OK, some investment there is understandable, for near- to mid-range future, as a part of transitional strategy on a path to solar/wind and storage, but not if its gas investment crowds out the necessary investment in solar/wind and storage. For every penny Northwestern invests in gas, it has to invest a nickel in solar/wind with storage.

The transition Northwestern needs is a transition from laggard to leadership, from contributor to the emissions problem to contributor to the increasingly necessary solution. Will it be easy? Of course not. All the more reason to begin hastening the necessary scale of economic shift spelled out 10 years ago by The Wall Street Journal.

Citing “huge costs seen in climate inaction,” Business Insurance magazine points directly to what we all face if we fail to stop “the potential dire economic consequences of climate change <<https://www.businessinsurance.com/article/00010101/NEWS06/912325939/Huge-costs-seen-in-climate-inaction>>

The Bloomberg Climate Changed newsletter summarized the situation on February 7, 2019: “The last five years were collectively the world’s hottest on record. That warming, which NASA and NOAA directly link to human activity, has immediate financial consequences.” 

The summary added that “Climate change isn’t just an expanding threat to the environment; it’s already a massive drag on the economy.”
As things stand now, Northwestern policy and practice are even a drag its renewable energy from hydropower, as carbon emissions lead to declining flow of rivers including the Missouri River<<https://www.latimes.com/nation/la-na-missouri-river-20140817-story.html>>. This will be a drag on Northwestern’s own economy for a long time ahead, and you need to act now to limit the damage.

All the above reflect a “performance standard” implicit to Northwestern Energy policy and practice to date. It’s not an enviable performance, but instead places Northwestern as a contributor to a broad array of emissions-driven dangers. Investors have begun looking for a better standard <<https://www.barrons.com/articles/future-returns-how-to-incorporate-esg-strategies-01552405734?>>. Northwestern cannot remain behind this developing curve, and maintain much hope for investor confidence as the climate trends continue to worsen.

While Northwestern still shies from necessary scale of commitment to solar and wind (with storage, of course),  other energy utilities are “turning to solar, increasing the scale of their aggregate PV portfolios more than sixfold in five years<<https://www.pv-magazine.com/2019/03/08/solar-becomes-a-must-have-for-utilities/>>.”

Instead, Northwestern talks of building natural gas plants. OK, some investment there is understandable, for near- to mid-range future, as a part of transitional strategy on a path to solar/wind and storage, but not if its gas investment crowds out the necessary investment in solar/wind and storage. For every penny Northwestern invests in gas, it has to invest a nickel in solar/wind with storage.

The transition Northwestern needs is a transition from laggard to leadership, from contributor to the emissions problem to contributor to the increasingly necessary solution. Will it be easy? Of course not. All the more reason to begin hastening the necessary scale of economic shift spelled out 10 years ago by The Wall Street Journal.