Colorado Bill Would Help Utilities Produce and Store More Gas

DENVER (AP) — A Colorado Senate committee on Wednesday passed a bill to save a state energy agency from extinction — but with caveats that would drastically reduce the agency’s renewable energy portfolio and make it easier for some utilities to produce and stockpile natural gas.

The latter provision has little to do with the Colorado Energy Office , whose funding expires June 30. But it’s a goal pushed by the bill’s sponsor, Republican Sen. Ray Scott, who represents a western Colorado region rich in natural gas.

“What we are talking about is the ability for a public utility to have gas reserves available for a hedge” against rising prices, Scott told the Senate Agriculture, Natural Resources, and Energy Committee.

Scott said the idea would protect consumers against price hikes. Opponents, including some Democrats on the committee, wondered about the state’s ability to regulate publicly-owned utilities that both produce natural gas and sell it to consumers.

Colorado’s Public Utilities Commission last year rejected a proposal by Black Hills Energy to do just that amid concerns that ratepayers would pay for exploration and drilling. Xcel Energy withdrew a similar proposal last year, citing the potential costs of litigation to get it approved. But it said it was exploring similar opportunities.

Scott said these utilities are currently buying out-of-state, costing Colorado at least $150 million a year in severance taxes that are levied on companies that extract minerals, oil and gas. Encouraging the commission to accept utilities’ natural gas applications also would create Colorado jobs, he said.

The Republican majority on the energy committee voted to send the measure to the chamber’s Finance Committee.

The bill would extend the energy office for four years at $3 million a year, though Scott has suggested he might introduce amendments to cut that funding.

The bill’s second component would eliminate several energy office programs that were designed to promote savings for schools, farmers, homeowners and businesses. Those programs are underused, have filled their objectives or can be covered by other energy office initiatives, said Kathleen Staks, the energy office’s executive director.

Since 2012, the office has helped 15,000 low-income households install energy-saving items, promoted small-scale irrigation and power-saving projects on farms, and encouraged the installation of electric vehicle charging stations, Staks said. It’s done the same for solar panels and wind turbines — two technologies that Scott and others say have matured enough to do without government incentives.

Citing the Legislature’s session-long search for transportation funding, Scott’s bill would raise registration fees from $50 to $85 for electric vehicle owners who don’t pay a roads-directed gas tax. The bulk of the proceeds would go to a state highway tax fund.

“I think ultimately this proposed legislation does not change the core programs, mission or focus of this organization” if funds are renewed at current levels, Staks said in an interview. “I do think this office can and should play a role in providing reliable energy research and data and information that tells the whole Colorado energy story.”

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