Statement from Shift Action for Pension Wealth and Planet Health on the Ontario Teachers’ Pension Plan’s purchase of a stake in Puget Sound Energy
Originally posted July 8, 2021 at https://www.shiftaction.ca/news-updates
For Immediate Release: July 8, 2021
Statement from Shift Action for Pension Wealth and Planet Health on the Ontario Teachers’ Pension Plan’s Purchase of a stake in Puget Sound Energy
Toronto, ON - Yesterday, the Ontario Teachers’ Pension Plan (OTPP) announced that it is partnering with Macquarie Asset Management to purchase a 31.6% stake in Puget Sound Energy (PSE) from CPP Investments. While PSE certainly has the potential to become part of the solution to the climate crisis, that is not the case today. There are significant barriers that could undermine the value of the company and concerning signs that PSE is working actively to delay the rapid action that is needed to ensure a safe climate future.
The OTPP will own 15.8% of the Washington State-based integrated electric and gas utility. Notably, three other Canadian pension funds also own stakes in PSE, including British Columbia Investment Management Corporation (20.9%), Alberta Investment Management Corporation (13.6%), and Ontario Municipal Employees Retirement System (23.9%).
OTPP claims that the PSE investment is aligned with its 2050 net-zero commitment and critical to decarbonizing Washington State’s power generation. Despite its lofty “beyond net-zero by 2045” commitment and laudable investments in climate solutions, PSE generates nearly two-thirds of its electricity from fossil fuels, is embroiled in litigation over the costs of decommissioning the coal plant it owns in Montana, is actively trying to build a fossil gas export terminal in Tacoma, and recently waged a sophisticated public relations and lobbying campaign to block legislative efforts to ban fossil gas hook-ups in new buildings in Washington cities.
These are not the actions of a utility fully committed to a climate safe future.
If PSE’s and OTPP’s net-zero commitments are to be taken seriously, the OTPP and PSE’s other pension fund owners must immediately move to end PSE’s efforts to expand fossil fuel infrastructure and delay Washington’s ambitious climate policies. To protect the retirement savings of Canadian pension plan members and align their investments with a safe climate future, PSE’s pension fund owners must rapidly accelerate the utility’s pathway to decarbonization.
Background info on Puget Sound Energy
PSE has set a goal to become a “beyond net-zero carbon energy company by 2045,” pledging to invest in energy efficiency, battery storage and renewable energy, reduce emissions from fossil gas used in its customer’s homes and businesses by 30% by 2030, and achieve 100% carbon-free electricity supply by 2045.
In June 2021, PSE signed a 20-year contract to purchase 350 MW of wind power in southeast Montana from NextEra Energy’s Clearwater Wind Project, an indication that the utility is taking the energy transition seriously.
However, in 2019 two-thirds of the electricity generated by PSE was derived from fossil fuels and just 9% from wind power. In 2020, 35% of PSE’s electricity generation came from its stake in the Colstrip coal plant in Montana and another third from its nine gas-fired power plants. PSE plans to build nearly 1,000 MW of new gas-fired power between 2026 and 2045.
PSE is trying to build an LNG export facility in Tacoma, Washington, a project that would facilitate increased gas production and which has been called “environmental racism” by local Native American tribes.
In recent years, PSE deployed a sophisticated public relations and lobbying campaign to block legislation by Washington city councils to ban natural gas hook-ups in new buildings. The utility has dedicated considerable time and money lobbying in the state capitol to block or delay climate action, spending more than US$2.5 million on lobbying and political contributions between 2016 and 2019. In early 2021, PSE faced criticism for failing to align its long-term resource plan with Washington’s legislated requirement to transition to carbon neutrality by 2030 and 100% clean energy by 2045, due to its plans to build new fossil gas-fired power generation.
In Seattle, residents are calling for an investigation into PSE after its gas pipelines caused leaks, fires and explosions.
PSE owns a portion of the Colstrip coal-fired power plant in Montana, the ninth largest greenhouse gas emitter among power plants in the U.S. over the last ten years, according to Environmental Protection Agency data. PSE is contracted to buy power from the coal plant until 2025. After Colstrip is shut down, it is unclear how much PSE will have to pay for its remediation, estimated to be US$400 million to US$700 million. PSE and the coal plant’s other owners may also be required by the Montana state legislature to pay for the town of Colstrip’s ongoing water supply as part of the environmental cleanup. PSE has already contributed $10 million to a Colstrip fund that will be used for community planning. PSE is also entangled in a legal dispute with the plant’s other owners and the state of Montana to determine which company should have to pay for Colstrip’s operation until it is decommissioned and how many of the joint owners must agree to the 2025 decommissioning date.
Contact information for media requests:
Adam Scott, Director, Shift Action for Pension Wealth & Planet Health
adamscott@shiftaction.ca
416-347-3858
Patrick DeRochie, Manager, Shift Action for Pension Wealth & Planet Health
patrick@shiftaction.ca
416-576-2701
Shift Action for Pension Wealth and Planet Health is a charitable initiative that monitors the fossil fuel and climate-related investments of Canadian pension funds and works to protect pensions and the climate by bringing together beneficiaries and their pension funds to engage on the climate crisis.
-30-
Originally posted July 8, 2021 at https://www.shiftaction.ca/news-updates