Xcel Energy wants to tap North Dakota energy boom
FARGO - Xcel Energy's top leader, who addressed shareholders Wednesday in Fargo, said he wants to tap North Dakota's growing natural gas supplies and has directed his managers to seek opportunities. "North Dakota is truly a state on the move, and...
FARGO – Xcel Energy’s top leader, who addressed shareholders Wednesday in Fargo, said he wants to tap North Dakota’s growing natural gas supplies and has directed his managers to seek opportunities.
“North Dakota is truly a state on the move, and we’re happy to be part of that success,” said Ben Fowke, Xcel’s chairman and chief executive officer, in remarks acknowledging the company’s first annual shareholders’ meeting in Fargo.
“We are interested in exploring how we can have a bigger presence in North Dakota,” Fowke said in an interview. Abundant natural gas supplies in the state – coinciding with recent spikes in propane fuel costs – make that an obvious avenue to pursue, he said.
“Natural gas might present some real opportunities going forward,” he said in the interview, echoing comments made in a meeting with The Forum of Fargo-Moorhead’s editorial board.
Xcel is interested in possible joint ventures with partners, an approach it took with 10 other utilities that joined for the CapX2020 transmission project, which includes a new high-voltage line from Fargo to Monticello, Minn., Fowke said.
“We just want to be part of it, and think we can be,” he added, referring to the North Dakota energy boom.
Xcel plans to build two new wind farms in North Dakota with a combined capacity of 350 megawatts, and in a recent agreement with utility regulators has committed to build a new 400-megawatt “thermal” generating facility in the state by 2036, with a natural gas plant considered likely.
Combined with two other planned wind farms, with a total capacity of 750 megawatts, Xcel expects to save customers $180 million in fuel costs over 20 years through renewable energy sources.
But Xcel’s interest in energy development exceeds the commitment it has made to regulators, said Fowke, who has directed his staff to “look at resource planning from a North Dakota perspective.”
Formerly Northern States Power, Xcel provides natural gas to 48,000 customers and electricity to 90,000 customers in North Dakota, primarily in Fargo, Grand Forks and Minot.
The utility is interested in providing natural gas to customers in communities near pipelines who want to switch from propane.
An early example is in Barnesville, Minn., where work will begin this summer to extend a pipeline about 20 miles to enable hookups in the town 25 miles southeast of Fargo.
Even paying a $26 monthly fee to pay for the pipeline connection, customers should achieve significant savings by switching from propane, said Mark Nisbet, Xcel’s principal manager in North Dakota.
Access to an existing pipeline is important in extending natural gas service to communities, or commercial sites such as large grain-drying operations, Nisbet said.
During Xcel’s annual meeting, shareholders handily re-elected a slate of 11 directors and strongly rejected a proposal to split the role of the board chairman and chief executive officer, both positions held by Fowke.
In remarks to investors, Fowke noted that Xcel had delivered earnings of $1.95 per share, the top of its predicted range, and that it has raised its dividend for the 11th consecutive year.
The dividend for the first quarter was 52 cents a share, compared to 48 cents for the same quarter last year, leading Fowke to reaffirm with confidence Xcel’s earlier projection that this year will see earnings of $1.90 to $2.05 per share.
In recent years, Xcel has moved its annual shareholders’ meeting outside of Minneapolis, where Xcel is based. Last year, the meeting was in Eau Claire, Wis., and meetings also have been conducted in Denver and Amarillo, Texas.