Colorado power plant bill poised to become law
Associated Press Writer
DENVER – Colorado is poised to require its largest utility to cut emissions at some coal-fired power plants and nudge it toward using natural gas to meet that goal.
The state House and Senate gave final approval to bipartisan legislation Wednesday requiring Minneapolis-based Xcel Energy Inc. to give primary consideration to natural gas to cut nitrogen oxides by up to 80 percent at about five smokestacks along the northern Front Range.
The measure – which awaits the signature of Gov. Bill Ritter, who helped craft it – gives Xcel the ability to sign long-term contracts to lock in lower prices for natural gas, which is more expensive than coal, and a guarantee that consumers will have to pay that cost.
It passed the House 53-12 and cleared the Senate 20-13, with opponents warning it would hurt the state’s coal industry and drive up electric bills.
“We’re all concerned about our environment. We also have to be concerned about the number of jobs that would be lost because of the bill,” said Rep. Randy Baumgardner, R-Hot Sulphur Springs, who represents four coal mines.
The bill was fast-tracked and passed both chambers within about two weeks of being introduced. Ritter issued a congratulatory press release about an hour before the final vote in the House.
The bill is an attempt to avoid a federal crackdown on pollution, cut down on greenhouse gases and also increase drilling of Colorado’s natural gas. It was negotiated and supported by natural gas companies, environmentalists and Xcel, the state’s largest utility.
Gas companies, which hired a team of lobbyists to push the bill, said it could lead to a 15 percent increase in drilling and create 400 new jobs.
The coal industry spent nearly $2 million fighting the bill, saying it could drive up power costs. It also argued that gains in gas jobs would be overshadowed by the potential loss of 800 jobs – from coal mines to railroads – for businesses that supply coal to the two power plants in Denver and Boulder that could be closed or converted to gas under the bill.
Coal representatives claimed their jobs were more stable than those in gas. People affiliated with gas argued they have paid 90 percent of the severance taxes collected in Colorado over the last decade.
The battle was also part of a larger national fight between the two fuels as the federal government considers reducing greenhouse gases blamed for climate change.
It’s not known how much the bill will drive up costs.
Xcel estimates the bill could cause average electric bills to increase 4 percent to 6 percent. The exact cost will depend on how many units it ends up retiring or repowering with gas, and how many remain coal-powered but equipped with emissions controls.
The state Public Utilities Commission will have the final say on what plan is adopted and weigh the costs, determining whether it will cause “reasonable” rate increases.
Coal is cheaper than gas but bill backers said the price of gas is moderating because of a greater domestic supply. They also said the cost of retrofitting plants that are at least 40 years old may not make long-term financial sense, especially given an expected wave of new emissions restrictions from the U.S. Environmental Protection Agency.
Republican Senate leader Josh Penry said the state’s plan would be kinder to consumers than if the EPA acted on its own.
Xcel would be able to negotiate for a good gas price and lock it in for up to 20 years. However, state regulators wouldn’t be able to overturn that deal later if prices dropped, leaving consumers on the hook for paying the negotiated price.