By Cathy Proctor of the Denver Business Journal
A proposal to reduce Xcel Energy Inc.’s coal-fired power generation along Colorado’s Front Range, and replace the use of coal with natural gas or other power sources, has gained the backing of Democrats and Republicans, Gov. Bill Ritter’s administration, environmentalists, the utility and the state’s natural gas industry.
The bill — HB 1365, dubbed the Clean Air-Clean Jobs Act — was introduced at the state Legislature Tuesday and speeded into its first committee hearing before the House Transportation and Energy Committee.
The bill is sponsored by state Reps. Ellen Roberts, R-Durango, and Judy Solano, D-Brighton, as well as Sens. Bruce Whitehead, D-Hesperus, and Josh Penry, R-Grand Junction. Ten of the 11 committee members Tuesday are co-sponsors of the bill.
The bill passed the committee by a vote of 10-1, with Rep. Randy Baumgardner, R-Hot Sulphur Springs, the only no vote.
“This legislation gives us a chance to clean the air in Rocky Mountain National Park, to reduce the Brown Cloud and to cut mercury emissions that threaten the health of our children,” Ritter said in a statement. “By crafting this uniquely Colorado solution, this bill also will allow us to comply with looming federal clean air standards.”
The bill’s authors hope to launch a comprehensive approach to dealing with harmful emissions from Xcel’s Front Range coal-fired power plants in one fell swoop over many years.
The other option, according to state officials, is a piecemeal approach to combatting emissions of sulfur dioxide, nitrogen oxide, mercury, and carbon dioxide as anticipated federal regulations on each pollutant are handed down one by one.
It will be less expensive for Colorado, its businesses and its consumers in the long run to do a wide-ranging, comprehensive plan than respond to the regulations one at a time while running the risk that federal officials will craft their own plan and hand it to the state for implementation, said Martha Rudolph, executive director of the Colorado Department of Public Health and the Environment.
The federal Clean Air Act requires Colorado to submit a plan to address regional haze by early next year or the U.S. Environmental Protection Agency will write its own plan for Colorado.
The bill’s sponsors anticipate that Xcel will retrofit, retire or repower some of its coal-fired power plants along the Front Range. Under the proposal, Xcel must file a plan to do so with the Colorado Public Utilities Commission by Aug. 15, 2010.
The goal is to reduce nitrogen oxide emissions by 70 percent to 80 percent by the end of 2017.
Ritter said the bill has been in negotiations for about a year.
One group left out of the conversation was the Colorado Mining Association.
Colorado is ranks eighth in coal production in the U.S.; it ranks sixth in natural-gas production.
The mining association’s executive director, Stuart Sanderson, blasted the proposal as a back-room deal cut between the administration, environmental groups, Xcel and the state’s natural gas industry.
“We were deliberately excluded,” Sanderson said. “This was a deal cut with Xcel, the natural gas industry and the governor’s office. They need to slow this down and allow the other constituents a chance to have a say.”
Sanderson said he hopes the Legislature will convert the proposal to a plan to study the situation.
“They’re making a bet that the regulations will be so,” Sanderson said. “In this industry we’ve learned that’s not always the case.”
Sanderson noted the irony of timing in introducing the proposal the day after Xcel told state regulators that electricity bills will be 8 percent higher in the second quarter due to higher prices for natural gas, used to fuel some of the utility’s power plants.
Ritter said the bill includes support for creating long-term fixed-price contracts between natural gas companies and the utility — something that could smooth the spikes in the price of the commodity. Currently, natural gas contracts are for a fixed supply at prices that float up or down depending on the national market.
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