Second Regular Session
             Sixty-seventh General Assembly
                    STATE OF COLORADO
                                                 INTRODUCED
                                                           
                                                           
 LLS NO. 10-0297.01 Duane Gall           SENATE BILL 10-074
                   SENATE SPONSORSHIP
 Penry,
 
                    HOUSE SPONSORSHIP
 (None),
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Senate Committees
 House Committees
 
 
 Agriculture and Natural Resources
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                         A BILL FOR AN ACT
       Concerning incentives for the generation of electricity
            from cleaner-burning fuels.
       
       
                           Bill Summary
       
            (Note:  This summary applies to this bill as introduced and does
       not reflect any amendments that may be subsequently adopted.  If this bill
       passes third reading in the house of introduction, a bill summary that
       applies to the reengrossed version of this bill will be available at
       http://www.leg.state.co.us/billsummaries.)
       
            The bill declares that there exists a perverse disincentive against
       investor-owned electric utilities' use of natural gas for fuel, as opposed to
       coal, and that this disincentive should be corrected by allowing all or part
       of a utility's long-term supply contract for Colorado natural gas to be
       accounted for as a capital cost, on which the utility is permitted to make
       a prescribed rate of return through customer charges.
            The bill directs the public utilities commission (PUC) to convene
       a rule-making proceeding to determine how much of the cost of these
       long-term natural gas supply contracts may be capitalized.  It limits the
       amount capitalized to the equivalent of the supply contract costs approved
       for the Comanche III coal-fired plant, and requires the PUC to begin its
       rule-making by July 1, 2010.
       
       
       
       Be it enacted by the General Assembly of the State of Colorado:
            SECTION 1.  Article 2 of title 40, Colorado Revised Statutes, is
       amended BY THE ADDITION OF A NEW SECTION to read:
            40-2-122.5.  Natural gas - capitalization of supply contracts -
       parity with coal - rules - legislative declaration.  (1)  The general
       assembly finds, determines, and declares that there exists a
       perverse disincentive against the development by
       investor-owned utilities of electric generating capacity using
       clean-burning natural gas rather than coal.  Therefore, it is in
       the public interest to correct this disincentive by allowing
       capitalization of all or a portion of a utility's long-term supply
       contract for natural gas.
            (2)  On or before July 1, 2010, the commission shall
       commence a rule-making proceeding to allow investor-owned
       electric utilities to capitalize all or a portion of the cost of
       their long-term, fixed-price natural gas supply contracts for
       Colorado-based natural gas production.  Capital cost recovery
       for these utilities shall include a rate of return on the fixed
       and variable costs associated with natural gas generation
       including their capitalized natural gas supply costs; except
       that the amount of such capital costs shall not exceed the
       amount the commission approves for the public service company
       of Colorado's Comanche III coal-fired power plant.
            SECTION 2.  Safety clause.  The general assembly hereby finds,
       determines, and declares that this act is necessary for the immediate
       preservation of the public peace, health, and safety.