Xcel Energy is on track to reduce its carbon emissions by almost 35 percent by 2020 and continues progressive approaches to meeting environmental challenges, customer needs and the demands of today’s two-way energy system, CEO Ben Fowke said at CU Denver.
Fowke, who also serves as chairman and president of Xcel Energy, spoke to more than 100 people in the Terrace Room of Lawrence Street Center on Jan. 23. His CEO Briefing, “Energy Outlook: 2014 and Beyond,” was sponsored by the CU Denver Business School, the Business School’s Global Energy Management program, and Xcel Energy.
Fowke said Xcel Energy operates in eight states, serving 3.4 million electric customers and 1.9 million gas customers. Colorado and Minnesota are the company’s largest states, with Colorado alone accounting for 1.4 million electric and 1.3 million gas customers.
Fowke said the energy field is more complex and dynamic than ever. More than ever, he noted, the energy grid must be strong, reliable and ready to respond in a moment’s notice to fluctuating energy demands.
With the growth of renewable energy sources, such as wind and solar, on the grid, “We have to keep working to balance the loads,” Fowke said. “We not only have variable demand now, we have variable supply. We need to accommodate that and, frankly, Xcel Energy is a world leader in integrating renewable resources.”
Those variable supplies account for why the utility’s traditional method of billing and compensating customers who generate their own power — net metering — has become outdated. “We still need a grid,” he said. “And the problem with net metering, the way it’s designed, is that not everybody’s paying for the grid. So that means other people have to make up the difference.”
As more customers opt for solar rooftops, there will be fewer left to support the grid, which everybody still uses. Xcel Energy is working with stakeholders and the Public Utilities Commission to determine sustainable rates that are fair for customers.
The company has taken a forward-looking approach to renewables, diversifying its portfolio with more solar (it recently added 170 megawatts of utility-scale solar, doubling its rooftop solar from the past decade) and more wind (the No. 1 wind provider in the United States). Xcel Energy is a leader in being opportunistic about expanding renewable portfolios while keeping customer rates competitive, Fowke said.
While Xcel continues to invest in the grid, it is transitioning away from coal — which is still a low-cost source of energy, especially for existing plants — toward natural gas. “Natural gas is truly a revolution in America,” Fowke said. “It’s not just what it can do for utilities, it’s the feedstock for the manufacturing processes.”
Putting all these elements together, he said, results in a better energy product. “It’s cleaner, it’s safer, it’s more reliable, and, by golly, we’re ahead of the game.”
The bottom line is that global demand for reliable energy is at an all-time high. Fowke noted that the United States handles energy more efficiently than other nations. The cost for electricity in Germany, for example, is four times higher than the cost of Xcel Energy electricity in Colorado.
“People want the choice of their energy mix, they want conservation programs, they want billing programs,” he said. “We’re up to the task of giving it to them.”
He concluded by saying that everyone has an opinion about energy policy, and the key is to rely on facts and collaboration to set sensible public policy. “It’s too important to get wrong,” Fowke said. “Let’s make sure we have a fair policy in place for everybody. I think we have a great future ahead of us. And for those of you in the energy industry, I think you picked the right career.”
(Photo: Xcel CEO Ben Fowke talks about the energy outlook for 2014 and beyond at CU Denver. Photo by Tyghe Boone-Worthman, marketing coordinator, CU Denver Business School.)