Environmental group Ceres warns of risk in TXU

NEW YORK Sun Feb 25, 2007 2:17pm EST

NEW YORK Feb 25 (Reuters) - The Ceres investor coalition on Sunday warned of investor risk from the coal strategy of TXU Corp. TXU.N, which sources say will receive a $32 billion buyout offer from Kohlberg Kravis Roberts & Co. and Texas Pacific Group TPG.UL.

The report by Ceres, an environmental group, says that TXU's investors will face a multitude of financial risks if the company moves forward with its plans to build 9,000 megawatts of pulverized coal-fired capacity.

The report cites construction cost over-runs, regulatory costs as climate regulations take hold and a slowing of power demand in Texas.