The legacy of former Xcel Energy CEO Alice Jackson
During her four years as president of Xcel Energy-Colorado, Alice Jackson helped unveil the utility’s plan to be carbon-free by 2050, worked on meeting climate change goals and speeded up phasing out coal.
Jackson has also faced criticism for the company’s fossil-fuel use and rate increases while Xcel’s profits in Colorado keep growing.
Xcel Energy, Colorado’s largest electric utility, is also grappling with updating the grid to accommodate a growing number of electric vehicles and wind and solar energy facilities. Increasingly extreme and unpredictable weather is expected to tax the system even more.
Jackson’s next step on the corporate ladder could be even more challenging. In early June, she moved into the newly created position of senior vice president in charge of system strategy and chief planning officer for all of Xcel Energy, which is based in Minneapolis and serves customers in eight states.
“In a nutshell, our team is responsible for building the energy system of the future,” Jackson said.
She’ll stay in Colorado and is working with her successor, Robert Kenney, during the transition. Kenney previously worked for Pacific Gas and Electric Company and was chairman of the Missouri Public Service Commission.
In a statement on Jackson’s new job, Xcel Energy said she will develop and implement integrated generation and transmission plans on the electric and natural gas systems “to meet the company’s vision to deliver net-zero energy by 2050 while preserving reliability and affordability for customers.”
“It’s a mindset shift for these planning teams, instead of working independently to work collaboratively,” said Jackson, who joined Xcel in 2011. “Many utilities across the country are talking about how we shift some of our planning functions. Not many have pulled the trigger on moving this forward, so we’re one of the first again.”
In 2018, Xcel Energy was the first utility in the country to announce the goal of being carbon-free. Jackson joined Ben Fowke, then the utility’s chairman, president and CEO, in a news conference in Denver to say the company’s aim is to get to net-zero carbon emissions across its eight-state territory by 2050.
The announcement followed the Colorado Public Utilities Commission’s approval of Xcel Energy’s plan to speed up closure of some coal-fired power plants, increase the use of renewable energy sources and add battery storage. At the time, the bids the company got for wind and solar projects were the lowest ever received by a utility in the U.S.
Last month, the PUC approved a new resource plan by Xcel Energy that will close all the utility’s coal plants by the start of 2031. The plan moves up the original 2040 retirement date of the company’s long-troubled Comanche 3 coal unit in Pueblo.
“Alice Jackson has led Xcel to commit to phasing out costly coal generation by the end of 2030, and has proposed a plan to achieve more than 80% renewable energy generation by 2030,” Gov. Jared Polis said in a statement.
The efforts will help stabilize utility rates and have established a precedent for the transition to renewable energy, said Polis. The governor has advocated for getting 100% of the electricity in Colorado from renewable sources by 2040.
Jackson understood where Colorado politics were heading and led Xcel in that direction, said Mike Kruger, president and CEO of the trade group Colorado Solar and Storage Association.
Colorado’s solar industry has tangled with Xcel Energy over access to the electric grid. Solar advocates have complained about the company’s process for making more capacity available and successfully pushed for new regulations to increase the size and locations of community solar gardens.
The gardens are centralized arrays of solar panels that connect to electric utilities’ systems. Subscribers get credits on their monthly utility bills. Colorado adopted the first statewide program in 2010, but has trailed other states since then.
“Could Xcel be a better partner? Absolutely,” Kruger said. “The community solar program is not living up to its promise.”
There could be more solar panels on rooftops and in fields, Kruger said. But solar energy has grown under Jackson’s tenure. In honor of the Colorado Avalanche’s Stanley Cup win, Kruger used a hockey analogy to describe Jackson’s approach.
“She skated where the puck was going. That’s really wise because you look across the country and you see utility executives skating to where the puck used to be,” Kruger said. “Ultimately we’re going to be decarbonized in Colorado in no small part due to (Jackson’s) leadership.”
Critics give Xcel Energy its due for adding more renewable energy, but say it’s not moving quickly enough given health and environmental concerns and the impacts of climate change. At the end of 2021, 33% of Xcel Energy’s energy came from wind; 32% from coal; 29% from natural gas; 5% from solar.
“Xcel is going to be closing coal plants, but later in the decade,” said Marie Venner, a member of the Small Business Alliance, which has opposed recent rate increases. “From my view, everything they’ve done has been done under a lot of pressure or requirements.”
Xcel Energy’s 2018 Clean Energy Plan that generated some of the lowest wind and solar bids in the country grabbed a lot of attention, Venner said.
“But they still left 95% of it on the table. They could’ve taken those bids and started to transition our system cost effectively,” she added.
Instead, Venner said, Xcel’s rates and profits have climbed in Colorado even as wind and solar energy prices have dropped. She believes the company has abused its monopoly in the market.
A lot of utilities have what are essentially monopolies because they’re the only entities willing or able to provide certain services such as electricity, water or sewer in an area. Like Xcel, they’re typically regulated in an effort to keep prices fair and service reliable.
Federal records show that Xcel Energy made $660 million in profits in Colorado in 2021, up from $588 million in 2020 and $578 million in 2019. The utility’s net income from its Minnesota operations was $606 million in 2021.
“Pancaking” rate requests
The state office of the Utility Consumer Advocate has spoken against Xcel Energy’s recent requests for electric and natural gas rate increases, condemning what it has called “a pancaking” of such requests.
“That’s not an equation for success by health and climate measures, to keep using their monopoly position to raise our rates and transfer more and more to shareholders,” said Ean Thomas Tafoya, state director of GreenLatinos, a conservation and environmental-justice organization.
Xcel Energy should reinvest its profits for the public good and help Colorado achieve its statewide goals for cutting greenhouse-gas emissions, Tafoya said in an email. He is the co-chairman of the state Environmental Justice Action Task Force.
Jackson said Xcel Energy is investing in its Colorado system. The company plans to invest in charging stations and other infrastructure and offering energy rates to encourage more electric vehicles in the state.
A planned $2 billion, multiyear project will upgrade Colorado’s high-voltage transmission system to help handle addition of renewable energy and growth. Most of the company’s wind and solar projects are on the Eastern Plains, away from where the population is more concentrated.
The utility will recover the cost of the transmission lines through cost-adjustment riders on bills.
While the generation costs of solar and wind energy have decreased, transmission costs have gone up, Jackson said. Inflation and supply-chain constraints are expected to boost wind and solar costs, she said.
Meanwhile, natural gas prices have jumped significantly. And Xcel is spending money to install smart meters to give customers more insight into and control of their energy use.
“There are a variety of pieces. It’s a complex industry,” Jackson said.
When Xcel Energy reviews other utilities’ rates, costs and service, “we compare very favorably,” she said.