Xcel Energy focused on essential change
For many of us, this past year made laser clear what we value most, and perhaps, what needs to change. That’s also true for organizations like Xcel Energy. We operate in an industry already undergoing significant transformation, driven by technology and evolving customer needs. The challenges brought on by the global pandemic and economic downturn, followed by the killing of George Floyd and civil unrest, helped to reinforce our priorities and also shine light on areas where we can do more.
Clean energy leadership
Xcel Energy is the first major U.S. power provider to announce a vision of delivering 100% carbon-free electricity to customers by 2050, with an interim goal of cutting carbon emissions 80% by 2030. And we’re more than halfway there: we’ve reduced carbon emissions 51% from the electricity provided to customers since 2005, and even more (54%) here in Minnesota.
To continue these reductions, we’ve proposed plans for the Upper Midwest to exit from coal responsibly. This means working with communities that have hosted our coal plants to help them find new employment, tax base and economic development opportunities. We recently proposed a revised Integrated Resource Plan that will reduce carbon faster and at a lower cost to customers by pivoting from plans to build a new natural gas plant in Becker, Minnesota, to instead using four smaller natural gas facilities in separate locations throughout the region. All the new units will be designed to enable the use of carbon-free hydrogen for producing electricity in the future.
In 2021, we’ll complete the nation’s largest multi-state wind expansion, which began four years ago. Since that time, we’ve doubled the amount of wind on our Upper Midwest system—enough new wind energy to power 2 million homes each year. And under the Integrated Resource Plan mentioned above, we’ll add almost 6,000 megawatts more wind and solar to our Upper Midwest system, taking advantage of the transmission capacity created by retiring coal.
In addition to cleaner electricity, we’re spearheading a strategy to reduce greenhouse gas emissions from our natural gas business, which includes keeping our methane emissions below 0.2%, purchasing natural gas from suppliers with low emissions, and expanding program offerings to help customers reduce their carbon emissions from natural gas use.
The switch to cleaner energy sources is good for the environment in multiple ways, beyond carbon. Company-wide, we’ve cut conventional air pollutants like sulfur dioxide, nitrogen oxides, lead, mercury, and fine particulate matter by 85% and water consumption by 34%. More improvements are underway.
Our vision to power 1.5 million electric vehicles by 2030 means 20% of all vehicles on the road across our service territory will be electric in that year, creating $1 billion in customer fuel savings and saving 5 million tons of carbon emissions annually. Everyone in our communities will benefit from better air quality as EVs also cut down on smog and fine particulates, especially for those living near highways or heavy traffic.
We provide a fundamental service that communities rely on to help them grow and prosper. Equally, Xcel Energy relies on its communities to succeed.
In good times and hard times, one of our most important contributions is to keep customer energy bills low. It’s a key priority, especially as we increase investments in clean energy. By improving our processes and technology, we’ve maintained residential energy bills in Minnesota that are below the national average for the last decade.
From mom-and-pop shops to corporations and nonprofit organizations, the pandemic created economic challenges throughout our communities, and we responded in multiple ways, offering customers increased energy efficiency and bill payment assistance. This includes a $17.5 million Payment Plan Credit Program, funded by shareholders, for bill forgiveness for Minnesota customers who have fallen behind on their energy bills.
Through the Xcel Energy Foundation, our company and employees stepped up to support local communities in 2020, donating $2 million to address food insecurity and COVID-19 relief. Across our service area, employees volunteered 59,000 hours, and together with the company, donated a total of $15.3 million through the foundation’s giving programs and the United Way campaign.
Commitment to diversity, equity, and inclusion
This past year was an awakening for many people and organizations across the country, including Xcel Energy. We’ve renewed our commitment to addressing racial equity and social justice within our society. That starts within our own workplace. For 2021, we’ve added a new corporate scorecard metric that ties executive compensation to fostering an inclusive workplace, promoting equity and building a workforce that reflects the communities we serve.
Our commitment extends to our work with communities, suppliers and other stakeholders as well. For more than two decades, we’ve supported diverse suppliers. In 2020, we spent $643 million on goods and service with businesses owned by women or veterans or whose owners are racially or ethnically diverse, disabled, or lesbian, gay, bisexual or transgender.
In Minnesota, we donated $300,000 to help fund North Star Learning Pods, an innovative program to help reduce the opportunity gap for Black and other racially or ethnically diverse students. Located at local churches and community centers, learning pods provide tutoring, enrichment experiences and reliable internet connections for hundreds of students.
Xcel Energy and its foundation were among the first to support the Minneapolis Community Safety Innovation Fund established in late 2020 to support community-driven health and social service innovations with the goal of improving safety in the city. We also donated $250,000 in grants to 14 nonprofit organizations to fund racial equity programs and rebuild communities in Minneapolis and St. Paul.
Working toward a brighter tomorrow
These commitments and more are detailed in our newly released 2020 Sustainability Report, titled Essential. This marks the sixteenth year we’ve published the report that focuses on our company’s environmental, social and local economic contributions.
The theme, essential, began as a way to thank and recognize our mission-critical employees—those on the frontlines and literally in the trenches, working to keep the lights on and the heat flowing. As the report developed, it was clear essential also applies to our commitments and the environmental and social change we are leading.