Sustainability and Resiliency Committee Minutes July 12, 2022

The meeting of the Sustainability and Resiliency Committee was held in the City Commission Chambers at Fargo City Hall at 3:00 p.m., Tuesday, July 12, 2022.

Present:
John Strand (chair), Fargo City Commissioner
Tim Mahoney, Fargo Mayor
Bruce Grubb, Fargo City Administrator
Mark Williams, Fargo Assistant Director of Planning and Development
Ben Dow, Fargo Director of Public Works
Jennifer Sweatman, At-Large Member of the Public
Greta Gramig, At-Large Member of the Public
Dave Leker, Fargo Park District Representative (Ex-officio)
Paul Matthys, Cass County Electric Cooperative Representative (Ex-officio)
Shawn Paschke, Xcel Energy Representative (Ex-officio)

Absent:
Brenda Derrig, Fargo Engineer
Bekki Majerus, Fargo Facilities Director
Shawn Ouradnik, Fargo Inspections Director
Casey Steele, At-Large Member of the Public
Blake Mikesell, Fargo School District Representative (Ex-officio)

Approval of the Agenda:
Commissioner Strand called the meeting to order. He reviewed the current agenda and asked that a discussion about new and/or additional Committee members be included. There was unanimous approval by all Committee members present.

Approval of the Minutes:
Mr. Grubb moved that the minutes from the May 10, 2022 meeting be approved as read. Second by Mr. Leker. There was unanimous approval by all Committee members present.

Xcel Energy Presentation:
Tony Grindberg, ND Principal Manager of Xcel Energy, said Xcel was formed in August 2000 by the merger of Northern States Power Company and New Century Energies. He said NSP and Xcel have served North Dakota for more than 113 years and Xcel currently has about 94,500 electric customers and about 59,900 natural gas customers in North Dakota. In 2020, he stated, Xcel spent more than $434 million boosting the local economy in North Dakota, and the company provides more than 100 jobs to North Dakotans. He said with partnerships with small and diverse suppliers, Xcel ensures its products and services evolve to meet the needs of its customers and in 2020, Xcel paid $6.9 million in property taxes in North Dakota. He said Xcel has been a national leader in wind energy since 2005 and since the early 1990s, has supported energy efficiency and offers a leading portfolio of programs with options for all types of customers. Xcel leads the industry in emissions reductions efforts with its generating plants, he said, helping states meet clean air requirements and has several demonstrations and pilots under way to test advanced technologies. He said Xcel’s work restoring power after storms is recognized as among the best in the industry and Xcel’s work is focused around three corporate priorities: lead the clean energy transition; enhance the customer experience; and keep customer bills low. For more than a decade, he said, Xcel has pursued a strategy to transition to clean energy and is the first major utility to announce it will provide carbon-free electricity by 2050. Xcel is providing customers choices that meet evolving needs and interests, he stated, and make it easy to do business with Xcel. Energy affordability is a top priority for customers, he said, and Xcel is the only major U.S. energy provider to announce a vision with aggressive goals for reducing greenhouse gas emissions across three large sectors of the economy: electricity; natural gas use in buildings; and transportation. He said there is an ambitious plan to reduce carbon emissions 80 percent company-wide by 2030 and put Xcel on the path to achieve its vision of 100 percent carbon-free electricity by 2050. He said from 2005 through 2020, Xcel reduced carbon emissions by approximately 51 percent from the electricity provided to customers, which is more than half way to delivering 100 percent carbon-free electricity by 2050. Under Xcel’s clean energy vision, reducing carbon emissions is the top environmental priority, he said. To make the goal possible, the key drivers will be to protect energy reliability and affordability due to the fact that Xcel cannot be successful in providing clean energy unless it meets the customer requirements of affordability and reliability. He said Xcel also has to work with states and engage stakeholders with constructive energy policies that support and enable reliable, affordable clean energy and advanced new technologies, specifically carbon-free resources that can be dispatched to integrate high levels of renewables. He said in the coming years, it is anticipated Xcel will add thousands of megawatts of wind and solar power to its system, incorporating natural gas and storage resources to help balance high levels of renewables. He said the company is also supporting strategic electrification of certain end uses to further reduce emissions in other areas of the economy and continues to rely on carbon-free nuclear plants, retiring additional coal units or changing their operations to minimize emissions affordably and reliably, and making critical investments in supportive infrastructure, such as transmission. He said some combination of these zero-carbon technologies would help Xcel get to 100 percent carbon-free, although the technology will need to advance before Xcel is ready at the scale and cost needed. The company established a vision to power 1.5 million electric vehicles across the areas it serves, he said, and having more EVs on the road will help cut carbon emissions, lower fuel and maintenance costs for EV drivers and keep bills low for all customers. He said in 2021, Xcel announced a net-zero vision for its natural gas business, aiming to provide customers with reliable and affordable natural gas and building energy services that will have net-zero emissions by 2050. Xcel has set a strong interim target to reduce greenhouse gas emissions 25 percent by 2030 from 2020 levels, he said, and this starts by accelerating plans to reduce methane. He said Xcel is moving to purchase natural gas only from suppliers with certified low emissions and improving its natural gas delivery system to achieve net-zero methane emissions by 2030. For customers, he said, Xcel is expanding energy efficiency programs and piloting new voluntary programs that encourage the use of electric appliances and low-carbon gas alternatives. As Xcel transitions to cleaner sources of energy, he said, the company is reducing its environmental impact across the board. He said Xcel monitors and supports emerging and advanced energy technology to build new customer experiences, and is testing the real-world application of cutting-edge technologies to serve customers. He said Xcel’s Advanced Grid initiative is a multi-year project to enhance the power grid, which will improve outage restoration, provide customers with real-time data to better manage energy use and give employees new tools to more effectively manage the power grid. He said Xcel is expanding its use of Robotic Process Automation, which automates simple but time-consuming tasks such as data entry. He said Xcel’s investment in Energy Impact Partners is providing valuable insights and the clean-tech investment platform has now invested millions of dollars in dozens of companies and Xcel has engaged with several of these companies on strategic pilots to accelerate innovation within its operations. He said Xcel continues to expand options for its customers who use Google Assistant. In addition to energy saving advice, he stated, customers can now access account information and pay bills on a variety of devices and platforms. Xcel is working on a partnership with Idaho National Laboratory on a hydrogen demonstration project funded by the US Department of Energy, he said. Producing hydrogen from electricity directly generated from a nuclear plant in Minnesota allows Xcel to generate 100 percent carbon-free hydrogen, rather than generating it from fossil fuels, he said. There is a growing demand for the use of hydrogen in the areas of transportation, battery fuel cells and industrial processes, he stated. The Xcel Energy Foundation supports many nonprofit organizations, he said, including arts and culture to ensure access for more than 26,000 children to arts and cultural programs, as well as education to foster innovative K-12 STEM and environmental education for nearly 4,000 students.

In response to a question from Commissioner Strand asking if Xcel’s corporate messaging would be well-received in North Dakota where there is a battle to preserve the legacy of the carbon energy infrastructure, Mr. Grindberg said as a former lawmaker, he remembers when wind was suggested in the North Dakota Legislature and everyone laughed. He said today there is a debate over tax credits and investment and is the cost of wind economical. The 2017 Legislative session was a tough time for the energy industry, he said, and utilities in North Dakota were at odds with one another. There was a heavy-handed strategy in the Legislature to outdo wind, he said, which brought everyone to the table to discuss differences and that Utility Working Group still exists today. He said Xcel does not have any other generation in North Dakota but wind where coal has been the predominant generation and debate about energy, fossil fuels and carbon capture as a solution to address the emissions. He said the market is what is driving change, it is the Minnesota market demanding this change and Coal Creek found a way to deliver to that market. He said change is going to continue for some time.

In response to a question from Mr. Grubb asking about net metering and net billing, Mr. Matthys said if a customer has a solar or wind system that is over-producing or is not using all the energy as it is produced, the customer can sell it back to the utility. He said the utility buys that energy back at a voided cost so the only thing the customer can offset is if they are using the energy while it is producing it. He said anything excess they will sell back at a voided cost rate, which is about 2.8 cents per kilowatt hour. The only thing the customer is avoiding at their house is the cost of the fuel; all the transmission lines, transformers, poles, wires and everything still needs to be there whether someone uses energy for 15 minutes or 24 hours; therefore, they cannot avoid that cost. He said what they are avoiding is the cost of fuel to produce that energy.

In response to a question from Commissioner Strand asking about the Supreme Court decision about the Environmental Protection Agency’s ability to regulate carbon emissions in the power section and how that will affect the energy industry, Mr. Grindberg said he thinks what is going on in the country is a right-sizing of the Constitution’s intent. He said whether it is the EPA decision or others that have been changed in recent weeks, there will be more individual state initiatives; however, it is not going to be driven by Federal agencies and that is what the decision was, that the Federal EPA, this is not their responsibility, it is the state’s decision. He said he supports Project Tundra and it is in the best interest of North Dakota; however, it is costly and so with North Dakota decision makers, how that moves forward, where Project Tundra ends and the technology proves to allow that to happen will benefit everybody.

Mr. Matthys said the Supreme Court EPA ruling puts the power back in the states where it belongs. He said Federal mandates assume every state is in the same situation and they try the blanket approach. This way North Dakota can address environmental issues at the state level, he said, and no one who works in any utility organization is jumping up down thinking they do not have to do anything environmentally-friendly or do anything with environmental stewardship; it is quite the opposite. This is a great win, he said, and the states can do what makes sense in the state and locally.

Mr. Grindberg said ND Gov. Doug Burgum has said many times the state will innovate its way through, not regulate. He said the governor is advancing the concept of leading technology innovation and carbon capture is an example of technology to lead the State forward.
In response to a question from Commissioner Strand asking if new technologies would render coal, oil, wind, solar and hydro obsolete, Mr. Grindberg said he thinks North Dakota is blessed with people committed to doing the right thing.

Mr. Matthys said he does not think anything is going to happen overnight; it is going to be a slow transition, even if there is major technology boost, whether it is in nuclear, water or hydrogen. Another thing to consider, he said, is utilities have existing investments or contracts with coal, nuclear or natural gas plants, there is existing debt that needs to be paid. He said if someone comes up with a problem, the private sector will take care of it. The EPA ruling is one win, he said, due to the fact that when the Federal government gets involved, things get more convoluted.
In response to a question from Mr. Leker about looking into more nuclear energy, which is a very clean form of energy, Mr. Grindberg said there is a stigma with nuclear and over time, there will be an emergence of nuclear. In Minnesota for example, Xcel has asked for extensions on its two facilities and that comes with a lot of review. He said running a nuclear plant is a lot different than running a coal plant from a safety perspective; however, the technology that exists today to build nuclear plants is different than it was. He said the new Xcel CEO is a nuclear engineer who served in the U.S. Navy and he thinks there will be a growth in small nuclear reactors across the country to balance the blend of growth and energy. It is a proven technology, he said, it is safe and the infrastructure bill signed earlier this year has significant funding for nuclear. He said for the last two years Xcel has embraced an “all-of-the-above” energy strategy and nuclear is part of that strategy.

In response to a question from Commissioner Strand asking about a Manitoba and North Dakota power exchange, Mr. Grindberg said it did not happen due to the fact that Canadian energy is nationalized. He said Xcel buys some Canadian hydro; however, that is a federally regulated issue.

In response to a question from Commissioner Strand asking what things are happening in the energy industry that might surprise people, Mr. Grindberg said changes are being debated state by state and the energy generation mix continues to change. He said the EPA decision will have some effect and it is going to be an evolving change to meet the demands of the country. He said crypto businesses are looking for large power capacity opportunities in North Dakota and crypto data centers create a lot of attention. Another surprise may be Xcel’s natural gas rate increase due to the current issues with the natural gas supply chain. He said Xcel asked for an increase in its fee for more infrastructure to provide natural gas. The last fee change was many years ago, he said, and is needed for infrastructure investments in North Dakota.

Commissioner Strand said there are some in the community who would like to be part of the SRC. He asked if it be a good idea to add two more community representatives to the Committee or if the other members have suggestions, he would be open to hearing them. He also asked what the members thoughts were about term limits for the public members.

Mr. Grubb said at the time he did not consider term limits; however, when this Committee came together it was a reformulation of the previous Renewable Energy Committee. He said there are currently two elected officials, three public at-large members, various City staff members and ex-officio members. He said he has also been asked by members of the public that if someone drops off the SRC, they would like a chance to sit on the Committee. He said he and Commissioner Strand talked about adding a couple of new members, there is interest out there, people are watching and he thinks it would be great if the Committee were to expand.

The meeting adjourned at 3:59 o’clock p.m.