Oil and Gas

Xcel to shut or convert Colorado coal power plants

* Xcel studying changes at three Denver-area coal plants

* Nitrogen oxide reduction to be complete by 2017

HOUSTON, April 20 (Reuters) - Xcel Energy's XEL.N Colorado utility, the largest in the state, will retire, retrofit or repower about 900 megawatts of coal-fired generation to reduce air pollution under a new state law signed by the governor this week.

Units as three Denver-area coal plants are being evaluated for possible retirement or conversion to burn natural gas, an Xcel Energy spokesman said.

The sites being studied include a 186-megawatt coal unit at the Valmont plant, four units, totaling 717 MW, at the Cherokee station and a 505-MW coal unit at the Pawnee station.

Under Colorado’s recently passed Clean Air-Clean Jobs Act, Xcel Energy will submit a plan to state regulators in August to reduce its nitrogen oxide emissions from coal units by up to 80 percent from 2008 levels by 2017.

The plan will likely include a combination of unit retirement, replacement with gas turbines or installation of improved pollution control equipment, said spokesman Mark Stutz.

Reducing NOX emissions at power plants and other industrial sites will help Colorado as it works to comply with federal clean air standards.

The Colorado utility has previously agreed to shut a 73-MW coal unit at its Cameo plant by the end of the year and may shut or repower coal units at its Arapahoe Station sometime after 2012 to meet stricter emission standards.

Meanwhile, a third coal unit at the Xcel’s Comanche Station near Pueblo is expected to be online next month, bringing Xcel’s coal-fired capacity in the state to 3,200 MW.

Xcel Energy serves more than 1.1 million customers in Colorado. (Reporting by Eileen O’Grady; Editing by Marguerita Choy)