Date post: | 16-Jul-2015 |
Category: |
News & Politics |
Upload: | center-for-energy-and-environment |
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Meeting the Challenge: A Business Perspective
CHAIRMAN, PRESIDENT AND CEO
BEN FOWKE
AGENDA
Industry Trends
Where We Want to Go
How We Get There
Building on Our
Momentum
ACCOMPLISHMENTS
No. 1 wind provider in America
Building Solar Capacity
A Leader in Emission Reductions
A Leader in Conservation
A Leader in Transmission 30%
Carbon Reduction
Strong Reliability
Storm Response
TRENDS IN THE ENERGY INDUSTRY
Changing Economics
Growing Customer Expectations
Changing Policy Landscape
CHANGING ECONOMICS Natural Gas
Drilling and Fracking
$1/ MCF Difference = $1.2 Billion Over 10 years
Price and Production
Henry Hub Price
$/MMBtu
Marketed Monthly
Production MMcf
Millions
1.0
1.2
1.4
1.6
1.8
2.0
2.2
2.4
2.6
$-
$2
$4
$6
$8
$10
$12
$14
2008 2009 2010 2011 2012 2013 2014 2015
Price Production
CHANGING ECONOMICS Renewable Costs
$-
$2
$4
$6
$8
$10
$0
$20
$40
$60
$80
2005 2009 2013
$/MMBtu $/MWh
• Competes with natural gas
• Great energy hedge
Wind
Energy Tax Credit
CHANGING ECONOMICS Renewable Costs
• Technology improvements lower costs
• Utility-scale approaching combined cycle
• Utility costs must be considered
• Higher penetration requires greater system support
Solar Energy
Utility Scale
Energy
Rooftop
Tax
Credit
$400
$300
$200
$100
2006 2013 2013 $0
2009
Incentive
CHANGING ECONOMICS On the Horizon
Several icons will come up here, including:
Micro Grids
Battery storage
Two-way communication
Smart Appliances
Electric vehicles
Heat and Power
Micro Grids
Battery Storage
Fuel Cells
Utility in a Box
10 Year US Treasury Yield
Jan 2004 4.13
Dec 2014 2.17
1.00
2.00
3.00
4.00
5.00
6.00
Jan-04
Jan-05
Jan-06
Jan-07
Jan-08
Jan-09
Jan-10
Jan-11
Jan-12
Jan-13
Jan-14
Jan-15
Percent
CHANGING ECONOMICS Investor Appetite
Transco Yieldco
REIT MLP
CHANGING ECONOMICS Electric Sales and Infrastructure
• Capital investment more than doubled
• Infrastructure needs will continue
• Combined, these issues drive higher rate pressure
1.7%
-0.7%
0.6%
2000-2007
Average
2008-2013
Average
2014
Actual
GROWING CUSTOMER EXPECTATIONS
COMPETITIVE PRICES
CHANGING POLICY LANDSCAPE Growing Competition
Competition
Grid is the Economic Enabler
Assault on California Power Station Raises Alarm
CHANGING POLICY LANDSCAPE Security
CHANGING POLICY LANDSCAPE Security
CHANGING POLICY LANDSCAPE Security
Power Plants
77
miles of transmission lines
19,000 transmission towers
200,000
transformers
2,200 substations
1,200
Transmission Control Centers
4
CHANGING POLICY LANDSCAPE Security: Our Response
Defense in Depth
Invest in Resiliency
Drill, Assess, Repeat
Strong Response Plan
Risk-based Planning
30%
CHANGING POLICY LANDSCAPE Carbon Intensity Reduction Requirements
41%
11%
16%
35%
2005
2020 30%
Carbon Reduction
2012
2005
CHANGING POLICY LANDSCAPE Xcel Energy Carbon Reduction
XCEL ENERGY
To be the preferred and trusted provider of our customers’ energy needs
Vision
We provide our customers the safe, clean, reliable energy services they want and value at a competitive price
Mission
Carbon reduction
Grid modernization
Innovative products and services
New regulatory framework
ACHIEVING THE VISION
35% by 2030
40% reduction by 2030
RESOURCES FOR THE FUTURE
63% Carbon Free Fuel Diversity to Manage Risk
Coal 29%
Nuclear 28%
Renewables 35%
Natural Gas 8%
A NEW FRAMEWORK
Create new tools Take a macro view
Employ performance-based oversight
Employ longer-term compacts Align resource, policy and rate decisions
Expedite customer options Move away from one-size-fits-all
Ensure fair playing field
Explore alternative structures Create value
Meet each state's priorities
22
A flexible, collaborative, forward-looking process
THE PATH FORWORD
Pursue no regrets investment
Adopt technology at the speed of value
Use mitigation to smooth the way
Take a comprehensive view
OUR FUTURE
Our Role
Achieve each state’s policy objectives
Enable the
transformation
Balance multiple
interests
Competitive price
Our Customers
Satisfied Meet
community needs
More choice
Regulatory Framework
Fair Efficient Incentives Collaborative Policy Based
Our System Renewables Coal Nuclear
More distributed resources
Robust, reliable, resilient grid
Cost-effective carbon
reductions
Let’s Keep Working Together
COLLABORATION: THE MINNESOTA WAY
We’ve Accomplished Great Things
Together We have a Strong Team
Customers
Policymakers
Utilities
E21 Initiative