Xcel Energy is recruiting Minnesota cities to thwart governor’s clean energy agenda

Xcel Energy is recruiting Minnesota cities to lobby against emissions reduction goals included in Governor Tim Walz’s climate agenda, but its campaign is off to a sputtering start after staff in several municipalities questioned the legitimacy of the effort and wondered whether it would undercut their own climate goals.

Xcel began approaching cities to join its Carbon-Free Future MN Coalition and lobby state officials earlier this year. At the same time, Chris Clark, president of Xcel’s Minnesota operations, participated in a stakeholder process to help shape Walz’s climate objectives. Clark was involved in discussions on the Climate Action Framework, which set a goal of 100% carbon-free electricity by 2040 – a decade ahead of Xcel’s corporate goal and in closer alignment with the swift action scientists say is needed to avoid the most catastrophic consequences of climate change.

As part of Walz’s advisory council on climate change, Clark participated in state-led discussions on carbon-free electricity goals at least as far back as November 2020. By early 2022, his company had quietly debuted the Carbon-Free Future MN Coalition with a website and a video praising its plan to hit 100% carbon-free electricity by 2050. Emails obtained by the Energy and Policy Institute via public records requests show Xcel began approaching public agencies to join the group soon after the Walz administration published a draft climate plan that solidified its commitment to carbon-free electricity by 2040.

With Minnesota falling short of its climate goals, state leaders have doubled down on achieving 100% carbon-free electricity. The final draft of the Climate Action Framework, released in September 2022, lists the 2040 benchmark as “an ongoing priority for the Walz-Flanagan administration.” State Rep. Jamie Long, who chairs the House Climate and Energy Finance and Policy committee, had previously pushed to codify the 2040 clean electricity standard in state law. 

Minnesota is in its strongest position in nearly a decade to pass climate and clean energy legislation after Walz won another term and his Democratic-Farmer-Labor party sealed majorities in the state House and Senate earlier this month. Legislation requiring 100% clean electricity by 2040 remains a top priority. Asked by EPI whether it would oppose such a bill, Xcel did not directly answer. A company spokesperson said the utility plans to work with Walz and other policymakers to “align our energy leadership with the polices (sic) of the states and communities we serve.”

But Xcel appears eager to stall a faster transition to carbon-free electricity, emails obtained by EPI show. In one instance in June, Xcel pitched its Carbon-Free Future MN Coalition at a gathering of Twin Cities mayors. The utility has also appeared at City Council meetings and met privately with public officials and civic groups. Xcel’s lobbying strategy, however, has met resistance at the local level. With ambitious climate plans of their own, many city officials have balked at the utility’s  invitation.

A staffer in one Twin Cities suburb questioned whether Xcel created the coalition to subvert the Walz administration’s 2040 carbon-free electricity goal, emails show. In another, a staffer said in an email that the group seemed more like a way to provide Xcel political cover than a benefit to their city. In an October memo to the City Council in the suburb of Hopkins, staff there noted that “many cities have chosen not to support the program as it does not align with their local climate goals.”

Emails to various public officials also show Xcel expected to reach a “critical mass” of 50 coalition members by late summer, at which point it planned to list them on the Carbon-Free Future MN website and step up its campaign. That unveiling still has yet to happen. 

EPI sent a series of specific questions to Xcel about its Carbon-Free Future MN coalition. Xcel responded with a 450-word comment which largely did not answer them. The questions and Xcel’s statement are published in full at the bottom of this article.

Coalition promotes fossil gas despite net zero pledge

A promotional video linked on the Carbon-Free Future MN website features gas stoves, which emit greenhouse gasses and cancer-causing pollutants. The website also contends there’s a need for high-emission fossil gas plants, a theory contested in recent Xcel regulatory proceedings. 

A staffer in a third Twin Cities suburb said in an email that one of their colleagues had received a Carbon-Free Future MN flyer at a Chamber of Commerce meeting over the summer. The staffer suggested that the coalition would align with an Xcel public relations campaign to continue investing in fossil gas plants.

In a fourth suburb, emails show a staffer felt that the coalition’s website indicated the group was formed to oppose efforts to accelerate Xcel’s 2050 carbon-free electricity goal – not to simply support the utility’s planned transition.

The Carbon-Free Future MN website takes specific aim at “some interest groups” that “are urging Minnesota legislators and regulators to mandate the elimination of carbon emissions as soon as 2030.” Clean energy and environmental justice advocates pushing for accelerated emissions reductions have frequently questioned Xcel’s ongoing investment in fossil gas.

The coalition’s website claims that speeding up the transition to carbon-free electricity wouldn’t “meet the needs of most Minnesotans who expect our system of universal access to safe, reliable and affordable electricity to continue.” The messaging draws from an increasingly familiar playbook used by utilities to justify investment in fossil gas despite the major disruptions it’s caused in recent years. 

Fossil gas price volatility has sent customers’ bills skyward – a trend expected to worsen this winter. In addition, Xcel customers are already shouldering millions of dollars in extra charges after the utility bungled gas operations during a February 2021 winter storm. Regulators at the PUC blasted Xcel and other utilities for mismanaging its gas infrastructure and racking up avoidable costs.

In a presentation about the Carbon-Free Future MN Coalition made to the City Council in Burnsville, the suburban home of Xcel’s Black Dog coal-turned-fossil-gas plant, Xcel lobbyist Michelle Swanson said Xcel is “counting on using natural gas” and that the Black Dog plant will run on gas “well into the 2040s.” She admitted, however, that technologies needed to meaningfully reduce emissions from gas plants do not exist today. Swanson listed “renewable natural gas,” hydrogen, and carbon capture as strategies to reduce or offset emissions – but all of those are costly, unproven at scale, and used by the utility industry to justify ongoing investment in fossil fuel infrastructure.

Burnsville officials ultimately agreed to join the coalition, passing a resolution whose first draft was written by Swanson. In an internal email to Burnsville City Manager Gregg Lindberg, Public Works Director Ryan Peterson noted that “the City could be as involved as we’d like, but Xcel really wants us to join to be able to put us on their website as part of the coalition. Once they receive a certain number of partners, they will start more outreach and publication of this including a robust website.”

Xcel offers to ‘assist with engagement’ of regulators, lawmakers

Xcel appears ready to use cities as a bulwark against criticism from clean energy and environmental justice advocates – and the decision-makers receptive to those advocates’ messages. The coalition website states that the group’s purpose is to “actively engage lawmakers, regulators and others in the carbon-free conversation” and promises “one-click access to your elected officials and regulators to make your voice heard.” 

Privately, Xcel has offered to coordinate coalition members’ communications with policymakers, including its regulators at the PUC. In an April email promoting the group to the Metropolitan Airports Commission, an Xcel account manager outlined the utility’s plans:

“We are asking customers to be part of this coalition at a level of engagement that aligns with your priorities. At a minimum, Xcel Energy would provide information about issues being considered by [the] Minnesota legislature, the Minnesota Public Utilities Commission, and other entities, and how this could impact you. Customers may want to take additional actions such as letters of support or other engagement with political leadership, and Xcel Energy can assist with that engagement. This coalition really offers you the opportunity to be a part of the conversation we are having with key regulators/policy makers in Minnesota.” (Emphasis added)

In her June presentation to the Burnsville City Council, Swanson appealed for the city to engage with Xcel’s regulators.

“We’re regulated by the Minnesota Public Utilities Commission and policy is shaped at the Minnesota Legislature and both of those bodies hear regularly from activists who want us to go faster, for example, to get to carbon-free,” Swanson said, specifically referencing “advocacy groups” that oppose fossil gas. She also referred to “groups that think we are going too fast,” though coalition marketing materials do not meaningfully address such groups.

Xcel wants customer money to promote the Carbon-Free Future MN Coalition

Xcel lobbyist Sara Barrow lists herself as the project manager for the Carbon-Free Future MN effort, and also notes she has “developed and implemented outreach strategies to assist in achieving company goals.” But Xcel has also apparently enlisted Rapp Strategies, a public affairs firm run by Todd Rapp, a former lobbyist for the utility who before that was an operative at the state legislature. Rapp’s group registered the Carbon-Free Future MN website domain in September 2021 – concurrent with Clark’s participation in efforts to shape the state’s climate goals. Rapp Strategies has since prepared slides and other recruitment materials to pitch the coalition to local leaders, document metadata shows. 

As part of its latest request to increase gas rates, Xcel asked to charge Minnesota customers $900,000 for “community relations” consulting by Rapp Strategies. Xcel only briefly mentioned the expense in its filing and did not specify whether that cost is tied to the Carbon-Free Future MN Coalition. EPI asked Xcel whether it was charging customers for those or other funds paid to Rapp Strategies for work on the coalition. The company did not directly answer the question in its statement, saying only that “The consulting contract you referenced is using their research and coalition-building expertise to advance this effort by educating customers and communities, and the dollars you mentioned support this work.”

Xcel keeping coalition’s aims under wraps

Despite framing the coalition’s objectives on its website as “responsible,” “careful,” and “the right way,” Xcel has tried to conceal information about it. After Swanson, the Xcel lobbyist, pitched the coalition to city officials in Hopkins, she sent a follow-up email urging staff to “please delete the presentation Sara sent you, or at least do not distribute, whatever works for you.”

The presentation, provided by the City of Hopkins through a public data request, echoes other recruitment materials. On one slide – titled “We need your voice” – Xcel wrote that “it’s important for policymakers to hear from you” and that sealing its 2050 goal “will require us to work through a complicated regulatory and legislative process.” 

Requests for emails with city leaders in Minneapolis and Saint Paul – two of Xcel’s biggest customers, and two of the state’s staunchest pro-climate municipalities – did not turn up any communication from Xcel about the coalition as recently as September. This is despite the fact that Xcel often characterizes both cities as strong partners – particularly Minneapolis, where the two have a formalized Clean Energy Partnership to promote the city’s clean energy goals.

A presentation to Twin Cities mayors in June revealed that a majority of Carbon-Free Future MN Coalition members were corporations and business groups. Those listed include Target, Allina Health, Red Wing Shoes, and several chambers of commerce. Online agendas for local business groups’ meetings show Xcel has continued to promote the coalition across its Minnesota service territory.

Xcel has history of delaying climate action

Xcel is considered a leader in reducing emissions in a utility sector mostly made up of laggards. Still, it has also joined efforts to oppose decarbonization strategies like electrification.

Earlier this year, EPI revealed that Xcel was part of a gas industry group that spread false information to undermine electrification in Colorado, where it also provides electric and gas service. In addition, Xcel CEO Bob Frenzel sits on the board of the American Gas Association, the gas utility trade group leading national efforts to subvert key consumer and climate provisions in the Inflation Reduction Act that promote electrification.

Beyond that, the utility has been part of the Consumer Energy Alliance, a front group that advocates for fossil fuels. Xcel executives also attended a weeklong boot camp organized by the Edison Electric Institute – the trade group for investor-owned electric utilities that counts Xcel as a member – on how to run advocacy campaigns, many of which opposed clean energy policy.

In Minnesota, Xcel is a lobbying powerhouse. The utility has 67 lobbyists registered in the state and is routinely among the biggest spenders on lobbying. In 2021, Xcel spent $1.1 million on efforts to influence legislators and regulators – the fifth-most of any lobbying group in Minnesota, according to state disclosures. Over the past half-decade, Xcel has made substantial campaign contributions to Republican state legislators and affiliated funds as Republicans consistently stalled climate and clean energy bills. Republicans have received far more from Xcel than Democratic-Farmer-Labor lawmakers pushing a pro-climate agenda.

Xcel’s support, both tacit and explicit, for a longer timeline to reduce emissions fits into a broader trend in the utility industry. After many electric utilities drove efforts to undermine climate science for decades, they have more recently shifted their focus to delaying climate action, according to a study by University of California, Santa Barbara researchers that was published in September. 

The electric utility industry is among those that have “argued that they should delay taking action on reducing pollution, for example because solutions are too expensive, infeasible, or because others should be acting,” the study found. EPI has also found that large investor-owned utilities with climate goals have generally back-loaded their carbon reductions. Utilities’ messaging also began to focus on unproven strategies like carbon capture – one of the dubious technologies Xcel promoted when it presented on the Carbon-Free Future MN Coalition to the Burnsville City Council.

Even as mounting research shows delayed climate action is a threat to lives and the economy, a cornerstone of Xcel’s initiative is raising doubts about the cost and reliability of more rapid decarbonization. Still, the utility stands by its push. On the group’s website, Xcel says it is “proud to sponsor the Carbon-Free Future MN Coalition.”

Questions EPI submitted to Xcel

1. Gov. Tim Walz has set a goal to achieve 100% carbon-free electricity in Minnesota by 2040, as indicated in the Minnesota Climate Action Framework (page 20 of this document). Does Xcel oppose this goal?

2. Will Xcel oppose legislation to codify a 2040 carbon-free electricity standard for Minnesota?

3. Chris Clark participated in state-led discussions on carbon-free electricity goals at least as far back as fall 2020, as a member of the Governor’s Advisory Council on Climate Change. These discussions included a focus on the Walz administration’s Climate Action Framework, which identifies the 2040 carbon-free electricity goal as a priority. Do you have any comment on this?

4. Xcel’s current rate case lists $900,000 in “increased consulting spend” for Rapp Strategies’ “community relations” work, as noted on page 31 of this filing (Initial Filing — Vol. 5, 2 of 2 Budget Summary and Correspondence, from 11/1/21). How much of this sum is related to the Carbon-Free Future MN Coalition? Are any other ratepayer funds being used to pay for Rapp Strategies’ work on the Carbon-Free Future MN Coalition?

Xcel’s response to EPI’s questions

“Developing the Carbon-Free Future MN Coalition is a key way we’re engaging, educating and encouraging stakeholders to participate in the clean energy future. We have nation-leading clean energy plans to reduce carbon emissions from the electricity we provide to customers 85% by 2030, and a vision to provide 100% carbon-free electricity by 2050. But if our customers and communities do not understand our plan and how it can deliver that clean energy future without risking reliability and affordability, there is a risk that the clean energy transition will be slowed.

That is why we are building this coalition of customers and stakeholders. One of our primary goals has been to educate them on our plans and address questions about whether such a rapid transition to clean energy is possible without sacrificing the reliability and affordability they depend on. We know our plans can achieve this goal, so the work helps position them to advocate for our ambitious clean energy plans if they choose to do so.

In addition to helping companies, communities and organizations with sustainability interests or concerns better understand the clean energy transition, they can also explore opportunities to participate such as through our Partners in Energy program or through their own sustainability efforts. This outreach also helps educate them on our progress—our system is about 60% carbon-free today—and shares information on how wind, solar and new technologies like batteries can contribute to this carbon free energy while saving our customers significant money, particularly during the recent commodity increases in natural gas prices, while creating good paying local jobs and community benefits.  

The consulting contract you referenced is using their research and coalition-building expertise to advance this effort by educating customers and communities, and the dollars you mentioned support this work.

Chris Clark’s service on the Governor’s Task Force is one of the many efforts in which we have worked to align our energy leadership with the polices of the states and communities we serve. We look forward to working with the Walz Administration and other policymakers to continue to do so.  

The current goal for Minnesota is to be carbon free by 2050, and this outreach helps increase understanding about that goal. Although the technology doesn’t exist today to get to 100% carbon-free while ensuring reliability and affordability for our customers, there are many exciting possibilities on the horizon. We’re exploring all technologies that with help us make the transition and would welcome any technology that will help meet the goal reliably and affordably earlier than 2050.

We’re excited to work with the Coalition partners to keep Minnesota moving forward as a clean energy leader.”

Photo credit: Ken Wolter via Shutterstock