Demand for natural gas could grow

Gov. Bill Ritter announced a major piece of legislation Friday that would boost the use of natural gas in the state.

In an agreement worked out between Xcel Energy, environmentalists and lawmakers on both sides of the political aisle, the governor’s plan would be to convert by 2017 several coal-fired power plants on the Front Range to natural gas.

The measure, the details of which are being worked out, not only would create a new market for natural gas in the state, but it also would help clear the air around Front Range cities.

“This proposal will keep Colorado at the forefront of America’s energy revolution,” Ritter said. “It will protect consumers, clean our air and protect public health and create new jobs by increasing demand for Colorado-produced natural gas.”

Senate Minority Leader Josh Penry, R-Grand Junction, said he has been involved in discussions about the proposal, but he hasn’t decided if his name will appear on the bill.

If the measure is drafted as he thinks it should be, he said it potentially could be a “game changer” for the Western Slope’s natural gas market.

Penry has thrice delayed hearings on a bill he has introduced to help natural gas producers and the Colorado Public Utilities Commission enter into long-range purchasing plans. Those plans would be designed to level the cost of natural gas and help stabilize the market, at least in the state.

“Natural gas is clean and abundant, but the biggest strike against it is the volatility of the price,” Penry said.

“My bill would help smooth that and take some of the volatility out of the market. There’s a lot of common ground with this proposal because it would create a big new market for natural gas.”

Penry’s Senate Bill 74 is set to be heard by the Senate Agriculture Committee on Thursday, but Penry may again delay it until he sees how Ritter’s bill gets written. Sen. Bruce Whitehead, D-Hesperus, is to be the bill’s lead sponsor.

Under the governor’s plan, Xcel would be required to work with the Public Utilities Commission to either close or convert 900 megawatts of coal-fired electricity at metro-area plants and replace or retrofit them to burn natural gas instead.

The switch isn’t expected to affect coal production in Colorado because the preponderance of that fossil fuel is shipped out of state.

According to the Colorado Mining Association, 22 million of the 32 million tons of coal produced in Colorado in 2008 were exported.

“Xcel Energy supports proposed legislation to establish a comprehensive process for addressing more stringent current and future federal Clean Air Act requirements,” said David Eves, president of Public Service Co. of Colorado, a subsidiary of Xcel.

“The company is optimistic that any final legislative proposal would focus on meeting these requirements.”

Penry said what’s really driving Ritter’s proposal are stricter new air-quality standards.

Still, he said, anything that boosts natural gas means more jobs and economic development for Western Slope residents.

“This is a real opportunity for the governor to restore some of what he’s done to natural gas,” the senator said, referring to stricter new state rules regulating the industry that Ritter pushed last year.

“But we’ll see what the details look like next week.”


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