Xcel Energy clarifies wind energy position after lobbyist implies doubt

Xcel Energy, long the nation's top wind energy provider, had to do some damage control Monday, Jan. 7, after its chief Washington lobbyist implied the Minnesota utility was considering a split with its wind energy allies.

Company officials told state wind energy advocates the Minneapolis-based utility is not abandoning wind power and chalked up its lobbyist's statements to frustration and fatigue over a last-minute tax credit extension inserted in the New Year's Day fiscal cliff bill.

Xcel had been disappointed that the one-year extension of the production tax credit for wind energy, known as the PTC, did not include the utility's suggestion for something called a "consumer renewable credit" to help utilities.

The lobbyist, John O'Donnell, was quoted Friday in the National Journal, a Washington, D.C., publication, saying "we are in the process of reviewing our relationship" with the American Wind Energy Association. Xcel is a member of the association.

O'Donnell also told the Journal that Xcel may not buy more wind power because the tax credit did not do enough to benefit wind energy customers like Xcel.

On Monday, Xcel CEO Ben Fowke issued a statement saying his company continues to believe wind energy is an important part of its energy future.

The PTC is paid to developers to offset the cost of building a windmill farm, but the proposed consumer renewable credit would go to utilities like Xcel to offset some of the costs of using wind energy, such as having natural gas power plants ready to take up the slack when the wind dies down, Xcel officials explained.

"While that proposal was not enacted, we are pleased to see the PTC extended," Fowke said in his statement.

Fowke added, "we will continue to consider additional wind resources for our systems as we always have." The utility is under a state mandate to make sure 25 percent of its electricity production comes from wind energy by 2020.

However, Xcel won't need more wind energy until 2019 at the earliest, because it has built up a sufficient storehouse of wind energy, Xcel spokeswoman Mary Sandok said.

Xcel will revive its idea for a consumer renewable credit with Congress this year when lobbying begins anew on extending the production tax credit beyond 2013, said Chris Clark, Xcel's regional vice president for rates and regulatory affairs.

"We continue to think it's a good solution," Clark said. "But at the end of the day, we recognize the legislative process. Sometimes it takes a few tries before something is enacted."

The American Wind Energy Association also papered over the spat, releasing a statement Monday.

"We've worked with Xcel on their concerns and will continue to. The tax credit already flows to utility customers and they also benefit from wind energy's very low operating costs, but we're always open to discussion," it said.

"Xcel has been very important to (the association) as a participant, because you need to be working with utilities with great amounts of wind on their system," said Beth Soholt, executive director of Wind on the Wires, a regional wind energy association.

Michael Noble, executive director of Fresh Energy, a nonprofit advocacy group, said he understood why tempers boiled over. The one-year extension of the PTC ensured another battle for the tax credit on Capitol Hill at the end of this year.

"What I want is thoughtful, sustainable public policy that robustly develops wind power, because it's by far our lowest-cost, carbon-free new energy resource," he said.