The latest effort in Colorado’s State House to roll back state policies promoting natural gas and renewable energy died in a a Republican-led House committee on Monday.

By Ann Rascalli

House Bill 1240, sponsored by Rep. Spencer Swalm, R-Centennial, would have ended the three-year old practice of allowing utilities to plan out their power-plant and power-purchasing decisions as if the passage of some type of cap-and-trade carbon tax were imminent.

In addition, the proposed measure would have limited the rate of return a utility may earn on new infrastructure that replaces existing equipment which is not fully depreciated. No doubt, backers were targeting this portion of the bill at Xcel Energy’s plan to replace two aging Front Range coal-fired power plants with natural gas-powered facilities.

In a rather convoluted argument, Republican Swalm told the House Agriculture, Livestock and Natural Resources Committee that HB 1240 is a “jobs bill,” arguing that its passage would reduce the cost of energy for businesses and families. Without it, he warned, the cost of energy would continue going up and taking business resources away from hiring and other areas.

Colorado’s coal industry has been making essentially the same argument after state regulators approved Xcel Energy’s $1.3 billion plan to stop burning coal at its electric power plants in Denver and Boulder. Prompted by the Clean Air-Clean Jobs Act signed by Governor Ritter in April, 2010, the state’s largest utility plans to shut down a coal fired generator at Boulder’s Valmont power plant by 2017 and replace four coal-fired generators with natural gas at Denver’s Cherokee power plant by 2022.  Xcel also plans to shut down a coal-fired generator and convert another to natural gas at its Arapahoe plant in Denver and install emission controls at plants in Brush and Hayden.

Even without the legislative mandate,  critics say the forecast $20-per-ton tax on carbon has already steered utilities away from lower priced coal toward more expensive natural gas and renewables.

However, Karen Hyde, Xcel vice president of rates and regulatory affairs, said the potential carbon tax has not increased her company’s rates. More importantly, her company’s transition replacement of old facilities with new gas-powered plants will help to avert larger future rate hikes because the money that would be needed to upgrade and continue running the old plants would have been significant.

Swalm also wanted to introduce an amendment to eliminate Xcel’s tiered rating system which means the more electricity a customer uses, the more he or she is charged. That proposed measure was defeated, and three Republicans joined with five of the committee’s six Democrats to defeat HB 1240.

“We must consider the stability of our utility infrastructure in terms of predictability,” said Rep. Roger Wilson, D-Glenwood Springs, before voting against it.

The defeat of HB 1240 follows Republicans failed efforts last week to roll back the state’s 30 percent renewable-energy standard to 10 percent and to require that lowest cost be the primary motivation behind any utility’s infrastructure investment.

The authors of those two Senate bills — Sen. Shawn Mitchell, R-Broomfield, and Sen. Scott Renfroe, R-Greeley — tried to revive their efforts Monday by including them in a bill that adds to the Colorado Consumer Protection Act. However, both efforts died on party-line votes on the Senate floor.