Xcel Energy, Colorado Gov. Bill Ritter and a coalition of state lawmakers, energy companies and environmentalists have reached an agreement on legislation that could close some older coal-fired power plants, with replacement by facilities fueled by natural gas and other lower-emitting or nonemitting energy sources.

The proposed Colorado Clean Air-Clean Jobs Act would require the Minneapolis-based utility holding company to retire, retrofit or repower 900 MW of Front Range coal-fired power plants by the end of 2017. The Front Range area includes Colorado Springs, Golden and Boulder.

Xcel, the state’s largest utility, would work with the Colorado Department of Public Health and Environment (PHE) to submit plans by Aug. 15 to the state Public Utilities Commission to reduce nitrogen oxide emissions at coal plants by up to 80% over the next eight years.

“Utilizing the cleaner-burning home-grown energy in this proposal would help Colorado make significant progress toward meeting federal Clean Air Act requirements,” according to PHE Executive Director Martha Rudolph.

Xcel CEO David Eves said his company is “optimistic” that any final legislative proposal would focus on meeting requirements of the federal Clean Air Act “in a fashion that is cost-effective for consumers and ensures ongoing system reliability.”

The proposed legislation has the support of America’s Natural Gas Alliance (ANGA), which said the plan should serve as a model for other states.

“This forward-thinking public-private collaboration makes clear that there are viable, commercial and meaningful clean energy solutions that can be achieved very quickly, while also supporting economic growth,” said ANGA CEO Regina Hopper. “This is an historic decision for the state of Colorado and hopefully a new way of thinking for the rest of our nation.”

Xcel’s power supply portfolio included about 13% renewables at the end of 2008, and the company has said that proportion will be up to 24% by 2020. Over the same period of time, gas-fired generation is expected to fall from 22% to 17%.

Colorado, which has the third-largest reserves of natural gas and is the seventh-largest producer of natural gas in the United States, will need an estimated 2-4 GW of additional electricity by 2020 to keep pace with population growth and other demands, according to the governor’s office.

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