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Xcel CEO bullish on renewables

Feb 9, 2008 - The Associated Press

Some utilities are fighting mandates for renewable energy. Xcel Energy Inc. has embraced the trend and would like to see some national standards on renewables for utilities.

Xcel Energy leads all investor-owned utilities in the amount of wind power on its system. In Colorado, Xcel Energy gets more than 10 percent of its power from wind and aims to get 20 percent from all renewable energy sources by a state deadline of 2020.

"Our intent is to push it to the max," said Dick Kelly, Xcel Energy chief executive and president. "Whether that's 20, 25 percent, 30 percent."

Minneapolis-based Xcel Energy, which serves eight states in the West and Midwest including North Dakota, also has a plan to cut carbon dioxide emissions by 10 percent by 2017.

Kelly said he generally favors a national renewable energy standard.

"It'd be nice to have a policy at the federal level, a national policy, so we all know what the rules are and we all know how to play by them," Kelly said in an interview with The Associated Press at Xcel Energy's downtown Denver offices.

Some utilities felt differently when the U.S. Senate debated a measure in the energy bill that would have required investor-owned utilities to generate 15 percent of their electricity from solar, wind and other renewable sources.

Atlanta-based Southern Co. and other utilities contended it would be tough to meet the mandate in the Southeast, where there isn't an abundance of wind and sun.

Kelly said he can sympathize with that because natural resources vary across the country.

Even in Colorado, one of the windiest and sunniest states, Kelly worries about having enough power when people need it. The company also is sensitive about costs to businesses and households.

"I'm assuming the people of Colorado wouldn't be very receptive to the power going out in July when it's 100 degrees and we say, `Well, the wind's not blowing, so you can't run your air conditioner,'" Kelly said.

Xcel Energy is working with the National Renewable Energy Laboratory in Golden on ways to store wind-powered energy for later use. The challenge, Kelly said, is to have a balanced portfolio of energy sources, which eventually could include nuclear power and coal plants that burn cleaner and pollute less.

"I think nuclear needs to be part of the solution because it's carbon-free," said Kelly, adding the nation's radioactive waste storage problem needs to be solved.

The Colorado native supports mandatory standards for cutting greenhouse gases blamed for global warming. Kelly said there is enough concern about carbon dioxide and customer demand for cleaner energy to warrant action.

"The time for debating it is over. We ought to actually start doing something about it," he said.

Kelly favors tax credits to encourage cutting greenhouse-gas emissions rather than "cap-and-trade" schemes that set pollution caps and allow companies to sell and buy credits. He said he thinks credits and incentives encourage more use of advanced technology, including coal plants that capture carbon emissions, while a cap-and-trade program might simply result in companies switching to natural gas, driving up the cost of gas.

Kelly also wants Congress to extend renewable energy tax credits and incentives set to expire at year's end. So far, proposals to extend them have failed.

All this might seem a big stretch for the company that teamed up with other utilities in 2004 to fight Amendment 37, a ballot measure that made Colorado voters the first in the country to set a renewable energy standard. Other states have set standards through regulations or legislatures.

Kelly said Xcel Energy opposed the measure because it was concerned it would drive up rates. The company also worried about a requirement that 4 percent of renewable energy required by 2015 come from solar power.

Investment in solar and a program encouraging homeowners to install solar panels have eased those concerns. Wind power also has become more economically competitive.

"I think the fact that we met the (10 percent) requirement eight years early should prove to people that we were never opposed to Amendment 37 and the renewable part of it," Kelly said. "I've been in favor of renewables for a long time. We've pushed the company as fast as we can."

With the addition of nearly 800 megawatts of renewable energy last year and more planned this year, the company is confident it will meet the 20 percent by 2020 requirement. It is buying power from a new 8-megawatt solar plant in south-central Colorado and is part of consortiums looking at other solar projects.

The American Wind Energy Association, a Washington, D.C.-based trade group, ranked Xcel Energy as the nation's leading utility in wind power in 2006 and 2007. It had 1,323 megawatts of wind power on its system in April, compared with 1,026 megawatts for No. 2 Southern California Edison.

"It's clear that Xcel is a leader, but more significantly is that the company's entire strategic posture has changed toward wind and other renewables under the leadership of Dick Kelly," said Randall Swisher, the association's executive director.

Swisher said his group is preparing a study to show lawmakers and other businesses the strides Xcel Energy has made.

Kelly, formerly the utility's president and chief operating officer, took over as CEO in 2005. He also worked for New Century Energies and Public Service Co. of Colorado, two of Xcel Energy's predecessor companies.

Xcel Energy has earned kudos from some of the same Colorado environmental groups it battled on the 2004 ballot measure. Some critics, though, have denounced the company's construction of a new coal-fired power plant in Pueblo. Some environmental groups dropped their objections in 2004 to the plant after Xcel Energy agreed to advanced pollution controls.

Others would like to see Xcel Energy be more bullish on renewable energy.

"Their resource plans represent a great start and shows that Colorado can be a real leader," said Craig Cox, executive director of the Colorado-based Interwest Energy Alliance, a coalition of renewable energy trade and advocacy groups. "We hope to bolster their leadership as the technologies continue to become more widespread."

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Updated: 2003/07/28