Is Coal Golden?

Electric power companies want clear direction from Washington on carbon emissions. Duke Energy, the third largest emitter of CO2 among the nation's electric plants, faces a Supreme Court hearing this fall over its failure to install up-to-date pollution controls during refurbishment of coal-fired plants. But at the same time, chief executive Jim Rogers has been vocal in calling for "mandatory, market-based and economy-wide legislation at the federal level to address the carbon issue" sooner rather than later. "What we need now is to understand what the rules are going to be. Only then will we know how to invest in the right solutions."

Utility investors, including the powerful California and New York public employee-retirement funds, are pressing TXU, whose stock is up about 20% this year, about its aggressive coal strategies. In a letter last May, the two retirement funds, which manage $400 billion in assets, expressed worries about the company "exposing itself to unprecedented compliance costs" should it be forced to retrofit its new coal-fired plants for possible greenhouse-gas limits.

"To see a company propose conventional coal plants on the scale of TXU is pretty disturbing for shareholders," says Dan Bakal, director of Electric Power Programs at Ceres, a coalition of investors, environmentalists and public-interest groups. Miner-tough Mike McCall is having none of that argument. Asked if he's worried about the increasingly coal-fired environment his son, a high school freshman, will grow up in, he answers quickly, "No, because we are reducing emissions too. That's the beauty of what we're doing." The coal debate, it seems, is just getting fired up.