NY AG and AES Agree on Climate Change Disclosures

New York Attorney General Andrew M. Cuomo today announced an agreement that requires the AES Corporation (AES) - a global energy company operating in 29 countries with annual revenues exceeding $16 billion - to disclose timely and relevant information to investors about financial risks associated with the production of global warming pollution. Today’s agreement with AES follows the landmark settlements Cuomo reached last year with two other major energy companies, Dynegy, Inc. and Xcel Energy, to protect investors by ensuring disclosure of potential financial risks for carbon-intensive companies from new and upcoming regulatory efforts related to climate change.

Under the Attorney General’s agreement, AES must disclose material risks associated with climate change in its annual summary report on the company’s performance (Form 10K) to the Securities and Exchange Commission (SEC). These required disclosures include an analysis of material financial risks from climate change related to:

Present and probable future climate change regulation and legislation
Climate-change related litigation
Physical impacts of climate change

Through the agreement, AES has committed to a broad array of additional climate change disclosures including:

Current carbon emissions
Projected increases in carbon emissions from planned coal-fired power plants
Company strategies for reducing, offsetting, limiting, or otherwise managing its global warming pollution emissions and expected global warming emissions reductions from these actions
Corporate governance actions related to climate change, including if environmental performance is incorporated into officer compensation.

New regulatory efforts to reduce global warming pollution, including New York’s regulation of carbon emissions from power plants, as well as pending federal actions, can impact a carbon-intensive company’s financial outlook through the costs incurred to comply. Potential investors must be aware of such material risks in order to make an informed investment decision.

AES generates and distributes energy in 29 countries and reported revenues of $16.1 billion in 2008. The company has a worldwide total power generation capacity of approximately 43,000 megawatts and an international distribution network serving more than 11 million people.

In the U.S., AES operates 17 power facilities, the majority of which are fueled by coal, with a total generation capacity of almost 12,000 megawatts. The company’s U.S. plants emitted a reported 42 million tons of carbon dioxide in 2006, placing AES among the top 20 of the largest emitters of global warming pollution by energy companies in the country.

In New York state, the company operates four coal-fired power plants generating more than 1,200 megawatts under the name AES Eastern Energy: AES Cayuga (Lansing, Tompkins County), AES Greenridge (Dresden, Yates County), AES Somerset (Barker, Niagara County) and AES Westover (Johnson City, Broome County).

In September 2007, Attorney General Cuomo subpoenaed five major energy companies for information on whether disclosures to investors in filings with the SEC adequately described their financial risks related to emissions of global warming pollution. The subpoenas were issued under New York State’s Martin Act, a 1921 state securities law that grants the Attorney General broad powers to access the financial records of businesses. The Attorney General reached agreements with Xcel and Dynegy in 2008. Cuomo’s inquiry into the disclosures of the remaining companies subpoenaed in 2007 - Dominion Resources and Peabody Energy - is ongoing.

The Attorney General noted that AES cooperated fully with his office’s inquiry.