Xcel Energy’s $1.3 billion coal-fired power plant under construction in Pueblo is a target in an investigation by the New York attorney general’s office.
The office issued subpoenas late Friday to Xcel and four other U.S. utility and energy companies, seeking information on whether the firms have adequately informed investors about possible financial risks of carbon emissions from power plants that burn coal.
In letters accompanying the subpoenas, the attorney general’s office noted that carbon emissions may become subject to government regulation and possible taxation. Carbon dioxide from power plants and other man- made sources is believed to be a major contributor to global warming.
“Selective disclosure of favorable information or omission of unfavorable information concerning climate change is misleading,” the letters said.
In addition to Xcel, subpoenas were sent to AES Corp., Dominion Resources Inc., Dynegy Inc. and Peabody Energy Corp. Minneapolis- based Xcel operates Colorado’s largest electric and natural-gas utility, Public Service Co. of Colorado.
Xcel said in a statement that “our financial disclosures are adequate. We look forward to discussing this matter further with the New York attorney general.”
Xcel noted that the 750-megawatt Comanche 3 plant is Pueblo was started only after a settlement with environmental groups including Western Resource Advocates, the Colorado Renewable Energy Society and Environment Colorado. The settlement required Xcel to reduce emissions at two existing coal-fired generating units in the Comanche complex and to spend more on energy conservation programs.
Comanche 3 was started in 2005 and is scheduled for completion in 2010. The plant will supply power to about 750,000 Xcel customers in Colorado.
Boulder environmental activist Leslie Glustrom said Sunday that Xcel deserves credit for its backing of various renewable energy and conservation plans but that the Comanche 3 plant will be a significant carbon polluter and could be subject to regulatory actions or carbon taxes that would hurt Xcel shareholders and customers.
Xcel is “moving in the right direction, but they’re not being as clear with investors as they should be” regarding the financial risks of coal-fired power, Glustrom said.
New York Attorney General Andrew Cuomo’s investigation could be viewed by some as an unusual attempt to use securities law to advance an environmental agenda. A coalition of environmental groups and shareholder activists opposes the effort to create more than 100 coal-fired power plants currently under consideration.
Cuomo used the Martin Act – the same state securities law that New York Gov. Eliot Spitzer used to investigate corruption on Wall Street – when he sent the subpoenas.
Jeffrey Lerner, a Cuomo spokesman, said the attorney general has been an advocate of environmental issues for “quite a long time,” but Lerner called the probe a “straightforward use of the Martin Act” because it involved disclosure of financial information.
“The attorney general feels it’s important for investors to have as much information as possible, and these subpoenas seek to find out how much information is being disclosed to investors in regards to CO2 emissions and their impact on investors,” Lerner said.
Power plants produce about 30 percent of U.S. carbon emissions, according to the letters.
Put on the books in 1921 to curb fraudulent investment advice, the Martin Act lets New York’s attorney general get convictions without proving criminal intent and gives him broad powers to subpoena documents and question witnesses.
The Associated Press contributed to this report.
Staff writer Steve Raabe can be reached at 303-954-1948 or sraabe@denverpost.com.
