Having pledged to produce carbon-free electricity by 2050, Xcel Energy has a new goal of achieving net zero greenhouse gas emissions from its natural gas operations in the same timeframe.
Xcel Energy, the largest electric utility in Colorado, said Monday that the goal builds on its goal announced in 2018 to deliver carbon-free electricity by mid-century. The Minneapolis-based company aims to reduce greenhouse gas emissions, including methane and carbon dioxide, from its natural gas business by 25% by 2030.
“It’s quite a transition for us as a company, in our clean energy leadership. One of the key corporate strategies for Xcel Energy is to lead the clean energy transition,” Bob Frenzel, the utility’s president and CEO, said in an interview.
While conservation groups commended Xcel Energy for setting a net-zero goal for emissions, they urged the company to be more ambitious in directly cutting emissions and to carefully account for reductions.
Xcel Energy, which operates in eight states, proposes a series of strategies for cutting greenhouse gas emissions from its natural gas operations. Frenzel said the company will continue to work to minimize the leaks from the pipelines and other infrastructure it uses to distribute natural gas.
The utility also plans to buy natural gas only from companies whose operations are certified as low-emitting. In those cases, an oil and gas company typically hires a contractor to monitor and report emission levels.
A third piece of the plan is to work with customers to increase energy efficiency in homes and businesses and provide incentives to power certain types of activities during off-peak hours. Xcel Energy is also looking at incorporating hydrogen and using so-called renewable natural gas, which is captured from landfills, wastewater treatment plants and animal facilities like dairies.
Under a bill passed in the 2021 legislative session, gas distribution utilities must file plans with state regulators to reduce greenhouse gas emissions 4% below 2015 levels by 2025 and 22% by 2030. Xcel Energy plans to submit its plan to the Colorado Public Utilities Commission in late 2022 or early 2023.
Xcel Energy’s announcement was welcomed by Gov. Jared Polis, who said the utility’s commitment will support Colorado as it fosters a clean energy economy and addresses climate change.
“Xcel Energy’s system-wide requirement to purchase certified gas by 2030 is an important step toward mitigating the impacts of global climate change and Colorado’s oil and natural gas workers are ready to supply those resources,” Dan Haley, the Colorado Oil and Gas Association president, said in an email.
Ean Thomas Tafoya, Colorado state director for GreenLatinos, said the push must continue to replace fossil fuels with renewable energy.
“While GreenLatinos supports efforts to cut methane leaking, we must be honest that there is no such thing as clean fracked gas,” Tafoya said in an email. “Xcel joining with the community calls for stronger direct regulation to reduce leaking methane from oil and gas operations is a good sign that our advocacy is working.”
Western Resource Advocates is looking forward to digging into Xcel Energy’s clean-heat plan, said Erin Overturf, director of the Boulder-based organization’s clean energy program. She said the utility has proposed ways to directly cut emissions by addressing the transport of natural gas and encouraging customers to reduce consumption.
“There are others where they’re really seeking to reduce emissions elsewhere in the economy and kind of taking credit for that themselves,” Overturf said.
The pledge to use only natural gas certified as produced under low emissions doesn’t make clear whether credit for those emissions would go to the oil and gas companies or the utility that uses it, Overturf said.
“Who’s taking credit for those emission reductions? If more than one entity is taking credit, then those emissions reductions are being double counted and it’s undermining the overall integrity of our efforts to reduce greenhouse gas pollution and acting on climate change,” she added.
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