May 17, 2020

Investors Pressure Chevron on Ecuador Case

energy digital
Chevron
ecuador
NYS pension fund
Admin
2 min
Chevron, Ecuador, NYS pension fund, Ecuador lawsuit, investors, Thomas P. DiNapoli
New York State Comptroller Thomas P. DiNapoli joined with 39 other investors from the United States, Canada and Europe, with a combined total of $580...

 

New York State Comptroller Thomas P. DiNapoli joined with 39 other investors from the United States, Canada and Europe, with a combined total of $580 billion in assets under management, to call on Chevron to settle its two-decade-long legal battle with indigenous populations in the Amazon rainforest. Citing an $18 billion Ecuadorian Court judgment and “significant reputational damage” Chevron has suffered due to the long-running lawsuit, DiNapoli asked the company to seek a settlement to prevent further shareholder damage.

“The time for delay is over,” said DiNapoli, trustee of the $150.3 billion New York State Common Retirement Fund, which owns 7.24 million shares worth an estimated $713 million in Chevron. “The company’s attempt to undo the court’s verdict only keeps the case in the public eye and further damages Chevron’s reputation. Chevron’s actions are hurting shareholders as well as the indigenous people of the rainforest. I urge the company’s leadership to settle the case and put this issue to rest.”

Over a 25-year period beginning in 1964, Texaco and its joint venture partner Petroecuador dumped nearly 16 billion gallons of oil waste products into the Amazonian rainforest. The companies also spilled nearly 17 million gallons of oil from its trans-Ecuadorian pipeline operation between 1971 and 1991 – 50 percent more than the oil spilled by the Exxon Valdez crash. Chevron merged with Texaco in 2001.

SEE OTHER TOP STORIES IN THE ENERGY DIGITAL CONTENT NETWORK

Chevron, Transocean Face 2nd Lawsuit in Brazil

Chevron's Secret Arbitration Violates Human Rights

Read more in May's issue of Energy Digital: The Military Edition

In a letter sent in November 2008, DiNapoli pressed Chevron’s board of directors to come to an equitable settlement in order to avoid substantial penalties in an Ecuadorian court. The company refused to settle, and the Ecuadorian Provincial Court subsequently awarded plaintiffs nearly $18 billion in compensatory and punitive damages in February 2011. The judgment was upheld by an Ecuadorian appeals court in January 2012.

Shareholders citing the Ecuadorian case have filed three resolutions calling for corporate governance reforms in the company. One asks Chevron to separate the positions of chief executive officer and chair of the board, another asks the company to lower the thresholds for calling special shareholder meetings, and a third, sponsored by the Common Retirement Fund, calls on Chevron to appoint an independent director with environmental expertise to its board.

Shareholders are expected to vote on the resolutions at the company’s May 30 annual meeting.

 

DOWNLOAD THE ENERGY DIGITAL IPAD APP

Share article

Jul 26, 2021

Ofwat allows retailers to raise prices from April

Ofwat
Utilities
water
prices
Dominic Ellis
3 min
Ofwat confirms levels of bad debt costs across the business retail market are exceeding 2% of non-household revenue

Retailers can recover a portion of excess bad debt by temporarily increasing prices from April 2022, according to an Ofwat statement.

The regulator confirmed its view that levels of bad debt costs across the business retail market are exceeding 2% of non-household revenue, thereby allowing "a temporary increase" in the maximum prices. Adjustments to price caps will apply for a minimum of two years to reduce the step changes in price that customers might experience.

Measures introduced since March 2020 to contain the spread of Covid-19 could lead to retailers facing higher levels of customer bad debt. Retailers’ abilities to respond to this are expected to be constrained by Ofwat strengthening protections for non-household customers during Covid-19 and the presence of price caps.  

In April last year, Ofwat committed to provide additional regulatory protection if bad debt costs across the market exceeded 2% of non-household revenue. 

Georgina Mills, Business Retail Market Director at Ofwat said: “These decisions aim to protect the interests of non-household customers in the short and longer term, including from the risk of systemic Retailer failure as the business retail market continues to feel the impacts of COVID-19. By implementing market-wide adjustments to price caps, we aim to minimise any additional costs for customers in the shorter term by promoting efficiency and supporting competition.”  

There are also three areas where Ofwat has not reached definitive conclusions and is seeking further evidence and views from stakeholders:   

  1. Pooling excess bad debt costs – Ofwat proposes that the recovery of excess bad debt costs is pooled across all non-household customers, via a uniform uplift to price caps. 
  2. Keeping open the option of not pursuing a true up – For example if outturn bad debt costs are not materially higher than the 2% threshold. 
  3. Undertaking the true up – If a 'true up' is required, Ofwat has set out how it expects this to work in practice. 

Further consultation on the proposed adjustments to REC price caps can be expected by December.

Anita Dougall, CEO and Founding Partner at Sagacity, said Ofwat’s decision comes hot on the heels of Ofgem’s price cap rise in April.

"While it’s great that regulators are helping the industry deal with bad debt in the wake of the pandemic, raising prices only treats the symptoms. Instead, water companies should head upstream, using customer data to identify and rectify the causes of bad debt, stop it at source and help prevent it from occurring in the first place," she said.

"While recouping costs is a must, water companies shouldn’t just rely on the regulator. Data can help companies segment customers, identify and assist customers that are struggling financially, avoiding penalising the entire customer in tackling the cause of the issue."

United Utilities picks up pipeline award

A race-against-time plumbing job to connect four huge water pipes into the large Haweswater Aqueduct in Cumbria saw United Utilities awarded Utility Project of the Year by Pipeline Industries Guild.

The Hallbank project, near Kendal, was completed within a tight eight-day deadline, in a storm and during the second COVID lockdown last November – and with three hours to spare. Principal construction manager John Dawson said the project helped boost the resilience of water supplies across the North West.

“I think what made us stand out was the scale, the use of future technology and the fact that we were really just one team, working collaboratively for a common goal," he said.

Camus Energy secures $16m funding

Camus Energy, which provides advanced grid management technology, has secured $16 million in a Series A round, led by Park West Asset Management and joined by Congruent VenturesWave Capital and other investors, including an investor-owned utility. Camus will leverage the operating capital to expand its grid management software platform to meet growing demand from utilities across North America.

As local utilities look to save money and increase their use of clean energy by tapping into low-cost and low-carbon local resources, Camus' grid management platform provides connectivity between the utility's operations team, its grid-connected equipment and customer devices.

Share article