nies with operations in affected regions have had more specific things to say about the effect of those initiatives. As RGGI is the most fully developed program (model rules became final in January 2007), companies’ disclosures about its effect have been the most frequent.

Disclosures about RGGI’s effects have taken a variety of forms. Old Dominion Electric Cooperative, which operates in states where RGGI is in force, acknowledged that RGGI may impact its electricity generating units but stated generally that it “cannot exclude the possibility that future CO2 emission regulations could have a significant effect on our operations.”

Other affected power producers have been more explicit about the effect of RGGI on their operations. Mirant’s September SEC report contained not only a full and detailed description of RGGI but also stated that the cost of upgrading its plants or buying credits could have a “ material affect” on its operating costs. Mirant also stated that complying with RGGI may result in higher market prices to offset operating cost increases. Earlier in the spring, Calpine acknowledged that RGGI will affect its operations in Maine, New York and New Jersey and that proposed auction rules in New York will increase costs the most.

The early stage of development of the WCI and MGGA initiatives likely accounts for the lack of widespread disclosure about their effects. Our search identified only one company addressing WCI and one company addressing MGGA in their SEC reports. Last year, Arizona Public Service acknowledged the possibility of regulation under the WCI but, without final rules, did not predict WCI’s effect on its operations. Commonwealth’s February 2008 report acknowledged MGGA’s existence and the fact that it may impact Commonwealth plants if and when it is finalized.

Fleet composition

It comes as no surprise that the composition of a power producer’s fleet of generators affects what it discloses about the effect of climate change initiatives.

In their reports to the SEC, power producers with fewer coal-fired plants in their fleets like to tout that they may be relatively better off than others in their sector if federal legislation is enacted. Calpine’s filing last spring boasted of its “relatively clean portfolio of power plants as compared to our competitors.” Power producers that rely more heavily on coal try to put the best possible face on the situation. For example, Consolidated Edison’s filing last spring spoke of minimizing greenhouse gas emissions through, among other things, application of cogeneration technologies.

When it comes to climate change, nuclear wins hand down compared to fossil fuels and SEC reports reflect that. Entergy’s filing at this time last year noted that its “overall CO2 emission ‘intensity,’ or rate of CO2 emitted per kilowatt−hour of electricity generated, is already among the lowest in the industry” due, in part, to the nuclear component of its fleet.

Power producers’ SEC reports filed around the time this is published may disclose even more about how companies foresee climate change initiatives affecting their bottom line. From what we have seen before, the foundation has been laid for more robust disclosure as these initiatives take more definite form. Certainly we can expect the same public interest groups and shareholder activists that have clamored for more disclosure to keep after the sector for even greater disclosure.