Xcel Energy strikes deal to purchase low-emissions gas in Colorado

DENVER, May 12 (Reuters) - Electric and gas utility Xcel Energy (XEL.O) on Wednesday agreed to buy natural gas for its Colorado customers produced with tight greenhouse emissions controls, making it one of the earliest major utilities to embrace certified lower-carbon gas.

The pilot project comes as energy companies are striving to cut carbon emissions to gain support of consumers and investors. Two years ago, Xcel Energy, the largest utility in Colorado, committed to 100% carbon-free electricity by 2050.

Crestone Peak Resources will supply the utility with "responsibly sourced gas" certified by Denver-based Project Canary, which supplies continuous monitoring technology and a certification process to give an emissions rating for natural gas.

Project Canary's certification evaluates the community impact of production, emissions, water usage and other factors to assign operators ratings similar to a credit score. The company in recent months has struck partnerships with major gas firms including Chesapeake Energy (CHK.O), EQT Corp (EQT.N), and NextDecade.

Crestone is the first producer in the state to use Project Canary's TrustWell certification on 100 percent of its current production volumes.

Reporting by Liz Hampton in Denver; Editing by David Gregorio

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