Along with stepping up its efforts to increase its electricity produced from renewables and deemphasize coal-fired generation, Minnesota-based Xcel Energy Inc. plans to decrease the proportion of natural gas-fired generation in its fleet by 2020, Xcel CFO Ben Fowke told a financial audience at the AGA Financial Forum in Miami Beach, FL, Monday.

Fowke said anyone would be “hard-pressed to find another utility that has showed the environmental leadership of Xcel,” touting his company’s ability to deliver on its environmental promises as indicated in resource plans its utilities filed last year in Minnesota and Colorado, the two principal states among the six in which it operates. “We are significantly reducing carbon — not just intensity, but the actual tons produced,” he said.

Noting that Xcel is the top utility wind provider in the nation, Fowke said the company intends to keep its leadership in demand-side management programs and expand its use of solar, biomass and battery storage efforts to counter wind’s intermittency. “We have a lot of resources right in our backyard and that has allowed us to reduce carbon by bringing renewables onto our system in a cost-effective manner,” he said. “We’re not embracing any one baseload strategy that could put us at a lot of risk.”

Through repowering, retiring and general improvements in its power plant fleet, the Xcel carbon footprint has been reduced and will be dramatically reduced by 2020, Fowke said. Currently Xcel gets about 10% of its power supplies from renewables, and by 2020 that proportion will grow to 24%, he said. Coal that now represents 57% goes down to 46%.

“But just as importantly, natural gas, which now represents about 21% of the portfolio, falls to 17% by 2020,” Fowke said. “If you think about what the industry is looking at, I think it is pretty clear to me that you are going to see more and more natural gas usage because of the transition to try to meet carbon goals. Because of our unique ability to bring renewables on-line on an economic basis, we are going to reduce our use of natural gas.

“So not only do we meet carbon [reduction] goals, but we give our customers a hedge against volatile natural gas prices.”

Further helping Xcel meet these goals is what Fowke called “constructive regulation” from various state regulatory commissions that have provided forward-looking rate coverage on fuel sources. Last year, these types of rate adjustments totaled $107 million and he expects that to grow to $166 million this year and $195 million next year. In total, Xcel’s utility operations in six states were collectively granted more than $400 million in rate relief during the past two years, Fowke said.

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