(May 2008) Senators were voting on legislation to extend the renewable production tax credit (PTC) as this issue of Fortnightly went to press. But with federal tax support for...
Energy People: Ben Fowke
We talked with Ben Fowke, who leads Xcel Energy
Ben Fowke is chairman of the board, president, and chief executive officer of Xcel Energy. He previously served as president and chief operating officer with responsibility for overall corporate operations as well as Xcel Energy's four operating companies, which do business in eight states: Colorado, Michigan, Minnesota, New Mexico, North Dakota, South Dakota, Texas, and Wisconsin.
Our discussion focused on Xcel's rapidly growing wind resources. They made up seventeen percent of the energy provided to its customers in 2015, generating more power than nuclear and nearly as much as natural gas. By 2020, Xcel projects that twenty-four percent of its energy will come from wind.
PUF's Steve Mitnick: Is wind a differentiating strategy for Xcel?
Ben Fowke: I think very much so. Whenever you can buy a technology that is environmentally friendly and buy it at a price cheaper than you can buy more conventional alternatives, for example natural gas, you have a unique advantage.
That's exactly what we have across all of our eight states with what we call "Steel for Fuel." We are lowering our customers' overall bills by buying or building wind at a price point that is less expensive than acquiring natural gas under a long-term contract. Wind is more affordable than natural gas even compared to today's low natural gas prices.
We are blessed at Xcel Energy with the best wind resources in the country. If you overlay the National Renewable Energy Laboratory maps with the maps of our service territories, you'll see this abundant natural resource is right in our backyard. It's much cheaper to access wind in the states we serve than in other parts of the country.
As a result, our customers benefit because their bills go down. Our shareholders benefit, because now we're investing in infrastructure and hedging what can be a volatile commodity, natural gas. The environmental benefits are the icing on the cake.
PUF's Steve Mitnick: Can you break down what happened to the technology that made wind as economic in recent years as it is now?
Ben Fowke: Two reasons. First, wind energy is coming down in price as the technology continues to improve. The blades are far more efficient and typically much bigger.
Eight to ten years ago, in the Upper Midwest, Colorado and Texas, Xcel Energy had wind capacity factors in the mid-thirties.
Today, some of the same sites deliver a capacity factor in the fifty percent range. That translates to a much lower cost of energy for our customers.
The second factor bringing down the cost of wind is the production tax credit legislation which passed at the very end of last year.
Any project started this