Xcel forced to open up about climate risk

US utility Xcel Energy has agreed to publicly disclose the risk that it faces from climate change, following a subpoena from the New York attorney general.

The state’s attorney general Andrew Cuomo had been investigating the Minneapolis-based utility, which is building a coal-powered plant in Pueblo, Colorado. He filed a subpoena asking for more information about the expected impact of climate change and the regulation of greenhouse gas emissions on the company's operations.

The energy firm, which was the fifth largest emitter of greenhouse gases among US utilities in 2006, reached a settlement to disclose its analysis of financial risks from current and probable future laws and litigation, and the physical effects of climate change. It will provide the risk analysis via the Securities and Exchange Commission as part of its 10-K filings.

"We need concrete policies in place that can help guide these companies as they move forward in a carbon-constrained world," protested Kate Smolski, senior legislative co-ordinator at Greenpeace US. "Some in the business community have taken a lead and some are lagging behind. Xcel is still talking about a coal-burning power plant and you cannot solve climate change and build a coal-burning power plant. Period."

Xcel originally provided some information to Cuomo, including its response to a 2006 questionnaire from the Carbon Disclosure Project, along with its CSR report, and filings with the Colorado Public Utilities Commission about the coal plant.

The company has also vowed to add 6GW of renewable energy to its porfolio by 2020.

Investor concern about climate change risk has hit a new high over the past 12 months with a record 57 climate-related shareholder resolutions filed with US firms during the 2008 proxy season, according to responsible investing group Ceres.