Sept. 16 (Bloomberg) -- New York Attorney General Andrew Cuomo subpoenaed five power companies to determine whether they disclosed to investors enough information about the financial risks of using coal to generate electricity.

AES Corp., Dominion Resources Inc., Dynegy Inc., Peabody Energy Corp. and Xcel Energy Inc. received letters noting carbon dioxide emissions from coal-fired plants have been linked to global climate change and are likely to be subject to future regulation.

``Regulation of greenhouse gas emissions on the state level, such as through the Regional Greenhouse Gas Initiative, will begin shortly in several states,'' the Sept. 14 letters to each company say. ``Such regulation would likely add a significant cost to carbon-intensive coal generation.''

``A public company must disclose information material to a shareholder's investment decision,'' the letters state.

Each letter says the attorney general's office is ``concerned'' that the companies have ``failed to disclose material information about the increased climate risks'' each business faces, or the ``possible effects of future greenhouse gas regulations'' and their potential impact on the companies.

Cuomo's letters invoke New York's Martin Act, a state securities law that gives broad powers to state prosecutors. Governor Eliot Spitzer used them while attorney general to probe allegations of Wall Street misconduct. The letters ask for a response by Oct. 9, 2007.

'Clear Disclosures'

Xcel said in an e-mailed statement to Bloomberg News that it is building a Colorado plant under a deal with environmental groups. ``Our financial disclosures are adequate. We look forward to discussing this matter further with the New York attorney general,'' the company said in the e-mail sent by spokesman Thomas Hoen.

Vic Svec, a Peabody spokesman, said in an e-mailed statement that the New York state attorney general's office ``has chosen purported legal and regulatory claims to send a political message.'' Svec added that the company has ``clear disclosures regarding climate change.''

Richard Zuercher, a spokesman for Dominion, Robin Pence, a spokeswoman for AES, and Dynegy spokesman David Byford declined to comment.

The cost of generating power at U.S. coal-fired plants during the second quarter of 2007 was about 43 percent less than the most efficient natural gas-burning plants, according to Jeremy Sussman, a coal analyst for Natixis Bleichroeder in New York.

In March, a Massachusetts Institute of Technology study reported that coal gasification may not be the best option for companies to use as fuel in power plants, citing its potential environmental costs.

The report found that adding technology to coal-fired plants to capture carbon dioxide emissions would increase retail electricity prices 20 to 25 percent.

To contact the reporter on this story: Edward Klump in Houston at eklump@bloomberg.net.

Last Updated: September 16, 2007 20:44 EDT