King Coal looking to reign again in Colorado

DENVER (AP) — King Coal is back. Years of punishing increases in natural-gas prices have the nation's utilities preparing to shift away from expensive gas-fired generation in favor of more than 150 new coal-burning plants.

In Colorado, local utility companies are preparing to invest $7 billion in five new coal-fired power plants that will run the gamut from conventional units to a state-of-the-art facility with ultralow emissions.

The development surge also could benefit Colorado's coal extraction industry, the nation's seventh-largest with production last year of 38 million tons.

"There's no doubt that coal will be playing a much bigger role in power generation," said Stuart Sanderson, president of the Colorado Mining Association. "That bodes well not only for Colorado coal but for Western coal in general."

The move toward coal is an abrupt departure from the past 20 years when most new power plants built in the United States have been fueled by natural gas. Before the big price run-up over the past five years, natural gas was viewed as a cheap fuel, with the added benefit of burning cleanly. But with natural-gas prices jumping from $2 per 1,000 cubic feet in 2001 to as high as $15 in December, gas-fired power has led to record increases in consumer electric bills.

Based on long-term averages, electricity from natural gas costs three to five times more to generate than electricity from coal, according to industry analysts.

The result is current proposals nationwide for 153 new coal-fired plants that would supply enough electricity for 93 million homes.

The proposed $7 billion in new plants by Xcel Energy and Tri-State Generation and Transmission Association — Colorado's two largest utility companies — represents 5 percent of the $136 billion in potential new projects tracked by the Department of Energy, making those companies and their ratepayers some of the nation's biggest spenders for coal-plant development.

The Colorado plants would be the first new coal-burning generators built in the state since 1982.

Part of the $7 billion investment is Xcel's $1.3 billion conventional coal-burning plant at its Comanche generating station in Pueblo. The project broke ground last year and is scheduled for completion in 2009.

The utility also has proposed to build the nation's first power plant that converts coal to clean-burning gas and captures carbon emissions — viewed as an environmental breakthrough that will change coal's image from a belching polluter to an abundant, clean and relatively affordable resource.