(The Center Square) – Utah Attorney General Sean Reyes and 12 other attorneys general are asking the Federal Energy Regulation Commission to hold a hearing over Vanguard’s ownership of utility shares in light of what they call the company’s recent “environmental activism.”
Vanguard has asked the FERC to extend its authorization to hold more than $10 million in utility shares.
The attorneys general allege in their filing the company has violated an agreement not to manage the companies, control the day-to-day management or “take any action ‘affecting the prices at which power is transmitted or sold'” in the 2019 application granted by the FERC.
A hearing is necessary before the 2022 application is approved “to determine whether electricity consumers and other ratepayers would be at risk of higher rates and reduced reliability of electricity supply if the purchases are approved,” according to a news release issued by Reyes on Wednesday.
The attorneys general cite Vanguard’s participation in the Net Zero Asset Managers Alliance, which is described as “a group of nearly three hundred asset managers who work together to ‘accelerate the transition towards global net zero emissions.'”
The filing also lists the possible impact on utility rates in the states. Utah is served by PacifiCorp, which is owned by Berkshire Hathaway, Inc. Vanguard backed climate disclosures for some of Berkshire’s “carbon-intensive operating companies.” Berkshire’s Currant Creek, Hunter and Huntington facilities in Utah use coal or natural gas generation.
“Consumers in Utah would be harmed if their costs went up because of closure of these facilities or substitution of more expensive energy sources,” the attorneys general said in the filing.
Vanguard has pledged $8.5 trillion “to pressure utility companies to eliminate fossil fuels,” according to Reyes’ news release.
“Vanguard is speaking out of both sides of its mouth—telling FERC it is just a passive investor in utilities but at the same time committing to use its trillions to pressure companies away from fossil fuels,” Reyes said. “FERC should ensure that Vanguard’s activism will not lead to electricity price hikes and grid instability.”
Joining Reyes in the filing are the attorneys general of Indiana, Alabama, Arkansas, Kentucky, Louisiana, Mississippi, Montana, Nebraska, Ohio, South Carolina, South Dakota and Texas.”
Reyes is not the only Utah official speaking about the possible impact of environmental social governance-focused investing. State Treasurer Marlo Oaks said in his “2022 Debt Affordability Study” released earlier this month that ESG could strain state budgets.
“Should ESG gain wider acceptance, a state may experience an increase in borrowing costs, regardless of its ability to repay debt, unless the state complies with the political mandates of the ESG scoring criteria,” Oaks said in the report.” By its nature, ESG removes certain political questions from our democratically-elected institutions and places them in the capital markets. This fundamentally alters our American systems of self-governance and capital markets.”
Vanguard and the FERC did not immediately respond to requests from The Center Square for comment.