Mon Sep 17, 2007 6:27pm EDT
By Steve James
NEW YORK, Sept 17 (Reuters) – Coal producer Peabody Energy Corp (BTU.N: Quote, Profile, Research) accused New York Attorney-General Andrew Cuomo on Monday of politicizing the issue of carbon emission disclosure.
It said he was wrong to claim Peabody operates power plants and his contention that the company failed to disclose to investors the climate-change risks of burning carbon was inaccurate.
Peabody’s statement came after New York state subpoenaed four energy companies and Peabody, which sells coal to power- generating companies. The state’s action was part of an investigation into whether the companies properly disclosed the financial risks of carbon dioxide emissions from new coal-fired power plants.
"The New York state attorney general’s office is using purported legal and regulatory claims to promote a political message by announcing an investigation of climate risk disclosure among major U.S. energy companies," Peabody said.
"It is unwarranted to use the legal process to advance the ‘just say no’ agenda, which opposes practical energy answers and has driven America to an unnecessary energy crisis.
"A process intended to protect shareholders is instead being used to advance a political agenda," the St Louis-based company said. "It is already accomplishing the first objective: to gain headlines for a cause that has nothing to do with investor communications."
Cuomo issued subpoenas on Friday for internal documents from power companies AES Corp (AES.N: Quote, Profile, Research), Dominion Resources Inc (D.N: Quote, Profile, Research), Dynegy Inc (DYN.N: Quote, Profile, Research) and Xcel Energy Inc (XEL.N: Quote, Profile, Research) and Peabody.
In letters accompanying the subpoenas, the AG’s office asked whether the companies’ investors had received adequate information about the possible financial liabilities of the carbon dioxide emitted from the planned power plants.
Legal experts said it was unusual to make the investigation public and they expected the issue could be resolved without charges, "Unless they turn up new evidence at some point down the road, you will probably see an agreement between Cuomo and these companies on some sort of enhanced disclosure," said Thomas Dewey of the law firm Dewey, Pegno & Kramarsky.
Peabody said Cuomo was wrong to state it has no climate disclosure, when it was prominently placed in its SEC filings, as well as its annual report and social responsibility report.
The company said it does not operate power plants, although "as our investors understand," it will be a minority partner in the proposed Prairie State Energy Campus in southern Illinois.
Prairie State’s environmental permits have been confirmed by the state of Illinois, the U.S. Environmental Protection Agency and the U.S. Court of Appeals.
"This clean plant has a CO2 footprint 15 percent lower than comparable existing plants," Peabody said.
About 100 new coal-fired power plants are currently planned in the United States. Coal-fired generation produces more than half the country’s electricity.
Xcel Energy said in an e-mailed statement its environmental disclosures were adequate and that its coal-fired power plant in development in Colorado was being built under an agreement with environmental groups the Sierra Club and Environmental Defense.
AES and Dynegy declined to comment on the subpoenas and Dominion was not immediately available. (Reporting by Steve James; additional reporting by Matt Daily)