I join with clean energy advocates across the country in celebrating Xcel Energy’s announcement yesterday that it will reduce carbon emissions in its electricity generation by 80% from 2005 to 2030, and to zero by 2050. Although several small, publicly-owned U.S. utilities have already reached zero carbon energy supplies today (Georgetown, Tex.; Rock Port, Mo.) and one large (also public) one has made a similar commitment (Sacramento, Calif.), Xcel is the first investor-owned utility to make a low-carbon pledge. For that commitment, I applaud them.
To abuse two metaphors, however, the devil’s in the details. Or, as George R.R. Martin has his characters say several times in his Game of Thrones series: “Men are men, vows are words, and words are wind.” In other words, what do we know about actions that may impact the fulfillment of this promise? To that end, here are three questions:
- Who carries the risk? Low-carbon electricity production includes nuclear power. Xcel Energy’s Minnesota subsidiary sought a “blank check” from the state legislature last year for its pending nuclear power plant retrofits, shifting the risk of cost overruns from shareholders to customers. The bill was defeated by consumer and industry groups crying foul. Does a low-carbon commitment mean that customers will be asked to shoulder the risk of keeping nuclear plants operating or will Xcel replace the plants with conservation, efficiency, and renewable energy if they prove less costly (even if they provide less shareholder benefit)?
- Does this impact the company’s perspective on distributed, customer-owned energy? Xcel produced a video in 2014 that pretty clearly suggests that “doing solar right” means utility-scale projects. The company has expressed dismay at expansion of community solar in Minnesota, and tried to reduce compensation for customer-owned solar in Colorado. Distributed solar isn’t just something customers want, it makes economic sense. Will Xcel be willing to work with communities for a balance between shareholder-owned and customer-owned resources?
- Are they serious? Xcel’s Minnesota subsidiary just last week announced plans to purchase a two-unit gas plant in Minnesota, with the second unit being completed next year. If most power plants have a useful life of 40 years, how can Xcel buy a new one now when they have pledged zero carbon emissions in 2050 (when that plant will be only 31 years old). And, why are they paying a 65% premium over the price the current owner paid for it two years ago?
Visionary promises are important. It’s why we’ve celebrated the nearly 100 cities pledging to reach 100% renewable energy (and interviewed them about their path to get there). Xcel Energy’s promise is a landmark one, and it’s a moment of pride to be one of their customers as they pledge to lead. Let’s just keep our eyes on the details.