New York State energy czar Richard Kauffman has directed his personal financial manager to purge his portfolio of holdings in the energy and utility sectors, a spokesman said last week in response to questions about two 2016 positions Kauffman held in companies that benefited from a state bailout.
A statement from the New York Energy Research and Development Authority on Friday said Kauffman had directed Goldman Sachs, which manages his portfolio, to “fully” divest his portfolio of the energy-related stocks, which have included a range of natural-gas infrastructure and other fossil-fuel companies. The authority’s role is to “promote energy efficiency and the use of renewable energy sources.”
Kauffman’s statement followed questions from Newsday last Thursday into two new stocks listed in Kauffman’s 2016 financial disclosure statement: Exelon and Entergy, two companies that benefited from the state’s 2016 nuclear bailout. Kauffman’s holdings in those two energy conglomerates were in the thousands of dollars to more than $20,000, a relatively small part of a larger portfolio valued at upward of $90 million.
Kauffman was a key player in the bailout, which observers say will pay Exelon upward of $7.6 billion over the next 12 years to buy “zero-emission credits.” (The state has said the cost is closer to $2.86 billion.) Entergy sold an upstate nuclear plant to Exelon after the state agreed to the bailout, which requires average ratepayers across the state, including on Long Island, to pay an average $2 a month to help subsidize purchases of nuclear energy from plants that faced shutdown.
An August 2016 story in the Syracuse Post-Standard said Kauffman had been in “daily” contact with top executives of Exelon and Entergy in the months leading up to their deal with the state. Entergy also owns the Indian Point nuclear plant in Westchester that is expected to close in 2021 following an agreement with the state in January.
In response to Newsday questions, energy authority spokesman Bill Opalka on Friday wrote, “Richard Kauffman had already directed Goldman Sachs to fully divest his portfolio from holdings in the energy and utility sectors.” In the past, the agency has said Goldman Sachs made nearly all investment decisions for him.
But Kauffman will retain holdings in “certain” energy-related stocks, Opalka said, including one with a major interest in one of the world’s largest offshore wind developers, Dong Energy. In the case of Dong and “certain” other unspecified stocks, Opalka said, Kauffman will “recuse himself from related matters.” New York State is in the midst of developing a broad plan for offshore wind energy, one that envisions hundreds of turbines in the waters off Long Island in the coming decades.
The authority said Kauffman had recused himself from state matters relating to Dong last year. The agency said Kauffman, who is also chairman of the authority, had done so in advance of Newsday inquiries and stories on his holdings in 2016.
Asked which other companies Kauffman would recuse himself from going forward in addition to Dong, Opalka declined to say. “The statement stands on its own,” he said.
He declined to answer questions about when Kauffman’s financial manager acquired or sold the Exelon and Entergy stocks. The 2016 financial statement covers stocks he owned at year’s end.
The 2016 disclosure statement also lists new holdings in Covanta, a company that owns and operates waste-to-energy power plants on Long Island, and Duke Energy, a company whose renewables subsidiary recently announced acquisition of a Long Island solar farm.
Kauffman, who had been chairman of the Global Financing Group for Goldman Sachs, lists a broad array of primarily fossil-fuel stocks in his portfolio. They include Energy Transfer Partners, the company that is developing the controversial Dakota Access pipeline that has been challenged by American Indian groups; Valero Energy Partners, Western Gas Partners, Phillips 66 Partners, and Exxon Mobil. At least one company, Denver-based Antero Midstream Partners, supplies water systems and other services for hydrofracking, a natural-gas extraction process banned in New York.