California state Treasurer Bill Lockyer is asking the U.S. Treasury Department to review policies that allow the use of tax-exempt bonds to finance coal-fired power plants.

Lockyer’s request, in a letter dated Tuesday, echoes the points New York City Comptroller William Thompson Jr. made in a June letter to the Treasury.

Coal-fired power plants pose financial and environmental risks to investors, taxpayers, and ratepayers, Lockyer wrote in his letter to assistant secretary for tax policy Eric Solomon.

Pollution from new coal plants will negate the regulatory efforts of California and other states to enact greenhouse gas regulations, and the eventual establishment of a national regulatory framework for greenhouse gas emissions will create additional cost pressures on the plants and the investors who finance them, Lockyer wrote.

In a critical response to Thompson’s June letter, Mark Crisson, president and chief executive officer of the American Public Power Association, which lobbies on behalf of state and local public power, said it is inappropriate to use the Treasury Department’s role in tax-exempt financing to evaluate environmental issues.

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