Segment of $4.4 billion Rockies Express gas line operating

Gargi Chakrabarty

Published May 20, 2008 at 9:57 a.m.
Updated May 20, 2008 at 9:53 p.m.

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The first phase of the $4.4 billion Rockies Express Pipeline has been completed, carrying natural gas from the West to the Midwest, and Colorado homeowners who use gas for heating are already feeling the pricing heat.

The 713-mile segment from Weld County to Audrain County, Mo., is up and running, officials said Tuesday, boosting the pipeline's capacity to 1.5 billion cubic feet per day.

Since parts of the first phase of the pipeline were opened earlier this year, taking gas from Weld County to Brown County in northeast Kansas, the local price of natural gas has jumped.

On Friday, Colorado's biggest utility, Xcel Energy, requested state regulators approve a hike in the price of natural gas it could charge customers in June. The proposed price is more than 50 percent higher than in June 2007.

If approved, a typical residential customer's gas bill in June would be $37.02, 51 percent higher than the $24.47 in June 2007.

For a typical small-business customer, next month's $147.31 gas bill will be 63 percent higher than last June's $90.38.

"The effect of the Rockies Express Pipeline is that we will pay for natural gas supply that is more in line with the Midwest and northeastern United States," said Xcel spokesman Mark Stutz. "Their prices have historically been higher, and that is what we are seeing happening here."

Colorado's natural gas prices - which were $3 to $5 per million British thermal units cheaper than in the rest of the nation last summer - now is only about 50 cents cheaper. The price gap could narrow even further in coming months as more segments of the pipeline open up and homeowners use more gas to heat homes during fall and winter months.

State officials do not regulate the price of gas, and utilities such as Xcel are allowed to pass the commodity price of gas, dollar-for-dollar, to customers without any markup.

Officials with Rockies Express, or REX, said the pipeline's next phase is a 638-mile segment extending from Missouri to Clarington, Ohio. The entire project is expected to be fully operational by June 2009, if the builders obtain all regulatory approvals.

When in full operation, it will have a capacity of 1.8 billion cubic feet a day.

The pipeline is a joint venture of Kinder Morgan Energy Partners LP, Sempra Pipelines and Storage and ConocoPhillips.

chakrabartyg@RockyMountainNews.com or 303-954-2976

• May 20, 2008

  11:20 a.m.

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  Ztliano writes:

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