Sustainable: Xcel energy program subscriptions going fast

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Sustainable: Xcel energy program subscriptions going fast

August 1, 2017

A new Xcel Energy program offering customers an opportunity to buy renewable energy directly from the utility will help power the Minneapolis Convention Center and the University of Minnesota in the future.

Renewable*Connect” has sold two-thirds of the 75 megawatts allotted to it since starting just over a month ago. While the cost of electricity is higher than Xcel’s standard rate, that premium hasn’t stopped businesses and government bodies from signing up, said Lee Gabler, Xcel’s senior director of customer strategy and solutions.

“I’d characterize [Renewable*Connect] as a success, a significant success,” he said. “To accomplish this in such a short window of time leaves us incredibly encouraged about the future.”

The program comes out of a desire by business and government to reduce greenhouse gases through clean-energy initiatives, he said. Many of them have aggressive carbon-reduction goals that require the purchase of renewable energy to offset their electricity consumption, Gabler said.

“This is something determined by our customers and their needs, especially around sustainability goals,” he said. “Those are becoming much more prevalent, much more important and much more high-profile. Our focus is responding as best we can to those needs.”

Xcel’s program is part of a national trend toward “green tariff” programs that allow utilities to sell renewable energy to their customers. While residents are part of the mix of customers for Renewable*Connect, Xcel’s Jaclyn Webb, product portfolio manager, said 80 percent of the early adopters are businesses, a category including local and regional government agencies.

Customers learned about the program through conversations with Xcel’s sales force, bill inserts, social media and advertising campaigns, she noted, and that will continue until the program is fully subscribed. Xcel offers subscription plans with month-to-month and five- and 10-year terms.

The Public Utilities Commission approved the program earlier this year, allowing Xcel to redeploy 50 megawatts of a wind farm in southwest Minnesota and 25 megawatts of a solar project in Chisago County for Renewable*Connect.

A special Renewable*Connect program was developed solely to allow the state Department of Administration to offset more than 30 percent of the electricity use at the Minnesota State Capitol with clean energy.

One main reason Xcel and other utilities can charge a premium for green tariff programs is that the customers receive “renewable energy credits,” or RECs, for the power they purchase.

Those credits can be used by businesses and governments to substantiate their support of green energy and be bought and sold on an emerging REC market, although they have little value today in Minnesota’s market.

Renewable*Connect isn’t the only option for energy customers. Xcel’s own Windsource program allows businesses and residents to claim the RECs in return for paying slightly more on their bills for the wind energy. Those extra costs, Xcel has said, reflect the actual cost of the renewable energy allocated for the program.

SOURCE:  Finance and Commerce

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