Moving toward its goal of 100% carbon-free electricity to customers by 2050, Minneapolis-based Xcel Energy Inc. said it still plans to incorporate more natural gas into its U.S. energy mix.
Xcel released its sustainability report ahead of 2Q2020 results, which were issued on Thursday. CEO Ben Fowke said the utility is stepping up its capital spending in eight states.
During the conference call to discuss results, Fowke said Xcel is proposing to spend up to $3 billion in Minnesota alone on wind repowering, utility scale solar, transmission, distribution and natural gas investments. About 800-1,000 megawatts (MW) could be added in repowering.
“Across our service territory, we are working with key stakeholders and communities to find ways to help support economic recovery efforts,” Fowke said. “The proposed projects in Minnesota alone would create an estimated 5,000 jobs.”
The company is on track over the next five years to rack up a 7% increase in collective rate base among its utilities in eight states and collectively invest $22 billion over the period, he said.
More quarterly earnings coverage by NGI may be found here.
Xcel reached a settlement during the quarter with Boulder, CO, that calls for a 10-year utility operating franchise for the company’s Public Service Company of Colorado. If approved, the settlement would be effective Jan. 1.
Xcel and the utility industry in general have been shaken by recent social injustice, Fowke said. He plans to push for initiatives aimed at improving racial justice nationally and in Minneapolis, following the recent death of George Floyd.
“As a society, I think we have a lot of work to do, looking at our unconscious bias and business practices,” he said. “I’m confident Xcel can help drive positive change for our nation and our community.”
Net income was $287 million (54 cents/share) in 2Q2020, compared with year-ago profits of $238 million (46 cents).
Xcel, an official supporter of the international Task Force on Climate-related Financial Disclosures, is working on recommendations to report about climate change in four categories — governance, strategy, risk management, and metrics and targets.
“We’re retiring aging coal plants while investing in the nation’s largest multi-state wind expansion, seeking to extend the life of carbon-free nuclear energy and investing in our transmission and advanced grid capabilities as part of our plans to reduce carbon emissions,” said Fowke.
“We’re investing in transmission and advanced grid capabilities along with company-owned wind farms, where the cost to construct the projects is more than offset by the fuel savings. We’re also looking to extend the use of existing carbon-free nuclear plants,” he said.
With the interim goal to reduce carbon emissions from customers’ electricity 80% by 2030 — as compared to 2005 levels — Xcel said natural gas is “an energy workhorse,” and will play an important role for the company. Nonetheless, the company addresses that natural gas produces greenhouse gas emissions.
Xcel is seeking opportunities to implement new low-carbon fuels in addition to operating the “cleanest” natural gas delivery system possible, it said in the sustainability report. Xcel also has joined Our Nation’s Energy Future to expand emission reporting, and collectively limit methane emissions throughout the entire natural gas supply chain to 1% or less by 2025.
The report also showed that Xcel estimates it could invest $20-30 billion in 12-18 gigawatts of new wind, solar, storage, natural gas or other clean technologies beyond the current investment plans.
As of 2019, 33% of Xcel’s power supply originated from natural gas, compared to 41% from renewable sources and 26% from coal.
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