ESG: Frank Prager

Deck: 

Xcel Energy

Fortnightly Magazine - November 8 2021

Electric Power, Arizona Public Service, Evergy, Northwestern Energy, PPL Corporation, WEC Energy Group, and Xcel Energy, as outlined below by execs from these companies, have quite decisively accelerated their progress on ESG priorities, through investment, innovation, and a clear intent to be recognized as leaders in ESG at the same time that they continue to deliver safe, reliable, and affordable utility service to the communities that depend upon them, powerfully.
 

Guidehouse's Dan Hahn: What are the most important things to know about ESG and Xcel Energy?

Frank Prager: Xcel Energy was the first utility to establish a vision of being carbon free by mid-century. We established this in December of 2018, and it is the guidepost for how we approach all ESG issues.

It is ambitious, but the target is one we're proud of. After announcing our 2050 vision, more than two dozen EEI utilities established similar goals. Our vision represents a transformation of the electric sector that was inconceivable just a few years ago.

We also established an interim goal of an eighty percent reduction from 2005 levels by 2030. That goal is one we're already hard at work implementing. We've got energy plans filed in Minnesota and Colorado that will achieve that interim target.

We've already achieved a fifty-one percent reduction across the system. The way we're doing it is straightforward. We're building a lot of renewable energy using the great wind and solar resources that we have in the states we serve.

We're also continuing to operate our nuclear plants in Minnesota, which are an important part of our overall strategy. And we are building some natural gas to maintain reliability along the way, as we retire most of the coal plants in our generation fleet. With this combination of strategies, we're able to achieve a remarkable level of carbon dioxide reductions.

We can do a lot through 2030 with the technologies we have today, but we can't get all the way to a carbon-free system. The intermittency of renewable energy means we will have impacts on the affordability and reliability of the system.

That is why, to achieve a carbon-free system by 2050, we need new technologies. We're working with policymakers and technology developers to develop zero carbon dispatchable technology to displace remaining fossil but that also allows us to control the system to provide affordable and reliable energy to customers.

We're big believers in technology. It will deliver; it just isn't here right now. That's why we set our vision for 2050 to give technology time to catch our ambitions. However, it's an exciting time in this industry. We're proud we have set these ambitious goals and we're well on our way to achieving them.

PUF's Steve Mitnick: You talked about innovation to try to go beyond eighty percent. Talk about how active Xcel Energy has been there.

Frank Prager: Innovation is a big piece of what we are and what we're trying to accomplish. The company is finding ways to create the new technologies necessary to bridge the gap between the eighty percent reduction in the carbon free system.

We are part of Energy Impact Partners, an exciting opportunity to learn about new technologies that entrepreneurs and developers are trying to deliver.

Our former CEO and current executive chairman Ben Fowke made innovation one of his main priorities. It was also one of his priorities during his tenure as chairman of the Edison Electric Institute.

EEI has been pushing Congress to fund research and development efforts through a program called the carbon-free technology initiative. That initiative is designed to develop carbon free dispatchable resources.

Xcel Energy is also working on its own pilots. We have a hydrogen pilot in Minnesota associated with our nuclear plants. This pilot will produce hydrogen using high temperature steam from a nuclear plant as part of the process to create green hydrogen.

We are also working with policymakers. Colorado just passed legislation we've worked on with the governor's office, lawmakers, and environmental stakeholders. It allows us to invest in new technologies to pilot and learn more about them. We're now evaluating many options to pursue moving forward

PUF: ESG has three letters to it. There's an S and a G, so let's discuss the S.

Frank Prager: Let's begin with diversity, equity and inclusion because, with what we've been through over the last eighteen months, it's been a traumatic period for the entire country with the pandemic.

For our employees, the issue of racial justice and reconciliation was huge. The murder of George Floyd in Minneapolis occurred a few miles from our office, and our employees, especially our employees of color, were deeply affected.

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Ben showed true leadership during that period. Our current CEO Bob Frenzel continues to develop diversity, equity and inclusion programs that will result in forward momentum. Given events in our community, for the first time, we made DEI part of our annual performance incentives for all employees, including our executives.

We also are looking at how we're working with the communities we serve. As an energy company, we have our assets in every neighborhood and in every state we serve. With our pipes, wires, transmission lines, and power plants in communities throughout the area, we're integral to our communities.

As part of our commitment to the communities we serve, we're hiring minority and women owned businesses and individuals to help us build new energy projects.

We're using that program in Minnesota, where we are building a four-hundred-sixty-megawatt solar project at our Sherburne County, or Sherco, coal plant.

We're also always promoting our Step-Up program, where we're hiring interns for the company, to help give people from underrepresented communities, an opportunity to be a part of Xcel Energy.

Another aspect of the S in ESG is just transition. As we make this energy transition toward a clean energy future, there are going to be folks impacted, especially employees and communities that have long relied on our coal plant operations.

In Minnesota, as I mentioned, we have the solar facility we're putting in at our plant at Sherco. We're also working with communities, to bring in a new data center to the city of Becker where Sherco is located.

That's going to provide two thousand construction jobs and fifty full-time jobs, and it's going to have a significant economic impact in the region.

We are also working with community and union leaders in Pueblo, Colorado, where we have our Comanche station and have plans to retire two of the three coal-fired units.

We're working with EVRAZ, a steel producer in Pueblo near Comanche, to look at ways they can continue to operate the facility and hire the people in Pueblo to work there. We're building a solar facility for them and allowing them to continue to stay in business and use clean energy, to protect the jobs onsite.

Another example is Hayden, a power plant in Northwest Colorado, where we're using advanced technology and other ideas, working with the community and labor, to try to find ways as we transition out of coal to protect the community and make investments in new technologies.

PUF: Xcel Energy is a big company and you're in a lot of states. How do you factor that in, try to reach these goals, and keep pushing, considering you cover so many different parts of the country?

Frank Prager: We are in eight states, and we're in states as diverse as Colorado and Minnesota, which, especially on the environmental front, are quite progressive.

We also serve states like the Dakotas or Texas, which have a different view on certain energy policy issues. We always need to find a balance.

What is most important for us, when we make investments and commitments to our communities, is to make these cleaner energy transitions, in a way the communities and customers appreciate, and most important, in a way that is affordable and reliable for all customers. That is how we'll achieve a more a successful outcome, no matter what the political situation is.

While some policymakers in some of our states may not agree with our focus on greenhouse gas reductions, they do appreciate the investments we're making in their community.

And they like that we're bringing them affordable and reliable power. That strategy is critical in our red states. Of course, it also works well in blue states, as they have an emphasis on environmental leadership.

No state wants overpriced power. If we can keep our eye on affordability and reliability, we can deliver what our states want, no matter what their political viewpoints are. Our strategy is robust, and it works in all the states we serve, no matter the political leadership.

Dan Hahn: What's your role in these initiatives?

Frank Prager: I wear a multitude of hats. I am the CEO's chief of staff. My role is to help Bob Frenzel and before him, Ben Fowke, to think about how the strategies of the company should develop and be rolled out.

I also coordinate the strategy components of what the company has to do. I'm engaged in federal policy, and do a lot of work in Washington, especially now with the budget reconciliation bill pending.

Another part of my job also is to act in the role of the sustainability officer for the company. We have board committees that oversee sustainability as well as our carbon strategy.

We don't do anything at Xcel Energy, from a strategic or a policy point of view, without thinking about, what does it mean for our sustainability? How does ESG play into any decision we make?

It doesn't mean we always make decisions that, for example, environmental advocates might want us to make, but we do a good job of balancing these issues and choosing a path that achieves the clean energy future that the company is committed to.

PUF: What's most rewarding to you in this fascinating job?

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Frank Prager: I love my job. I have an opportunity to work on transforming an entire industry. More than that, I work on issues that can allow us to transform the country, and to make a difference in people's lives.

There is nothing you can do with your career that is more valuable than that. I also work with some of the finest people I know, it's an honor to work with the people at Xcel Energy, and with all of the people who work in the utility industry.

 

ESG Powerfully conversations, some with Guidehouse's Dan Hahn and Michelle Fay: