In a week, Dick Kelly will leave Minneapolis and find something to do in Colorado. He will retire as the CEO of Xcel Energy. What will he do?
“I’ve had enough of utilities,” he told me. “I’d like to try something different.”
He deserves a break. He has been working in electricity generation most of his life. On the way to becoming the CEO of one of the most respected electric utility companies in the United States, he walked around with a clipboard and read meters in thousands of backyards. Meter-reader to CEO. It has given Dick Kelly perspective.
The kind of perspective Kelly possesses is not seen very often in his business. Dick Kelly believes the facts are in on global warming. “I think the science is pretty solid,” he said. “Maybe we haven’t communicated it well enough. But I think people do believe we need a change in the way we generate and use electricity.”
He is talking about coal. Coal is the fuel from which most of America’s electricity is generated. Kelly has been about the business of driving Xcel to switch coal plants to natural gas, and he’s made Xcel the No. 1 provider of wind-produced electricity in the country. If he could stick around another 10 or 20 years, he’d likely put Xcel at the top in electricity production from the sun.
“We’ve got to get off fossil fuels,” Kelly said. “The quicker the better.”
“But, there are a lot of people in Congress who wouldn’t agree,” I said.
“I know it,” replied Kelly. “All they are worried about is the next two or six years when they run for reelection. They just keep kicking the can down the road.”
Then he adds, thoughtfully: “I don’t know how they can deny the science. I really don’t.”
If I didn’t know his record so well, I would have a hard time believing that these words were coming from the head of an American utility company. But then I remember that Kelly has driven Xcel to exceed the state’s mandate on renewable energy. Getting into wind in a big way was not a difficult decision for Kelly. There is plenty of it around here, and it is cost competitive.
Kelly said: “I think one of the misconceptions is that many people believe that wind is just outrageously expensive. Truth is, wind power competes very well with natural gas. The technology is getting better. We are getting a lot more kilowatts out of our windmills now. Even solar has come down 50 percent in the last two years.”
Then, Kelly said something that would get him booted from the utility country club. “I’d be OK if there were never any more coal.”
Early days of coal plants
He remembers his early years working at coal-fired plants. “When you would go to your car in the parking lot at the end of your shift, your car was just covered with residue and coal dust,” he recalled. “I thought, right away, this is not a good thing.”
Kelly was there as coal-fired electric utilities began to clean up the sulfur dioxides and nitrous oxides coming out of the smokestacks. “We are on the verge of taking care of the mercury problem, too.”
But that leaves CO2, and coal plants produce more of it than any single source. “We have a problem with CO2,” he said. “The science is done. It is clear that CO2 is not good.”
Kelly has also been running a company, don’t forget that. He has had to manage a good return on investment and keep prices low, and coal manages to do both of those things. “We have an awful lot of it,” he said. “There’s got to be some way. I personally think science will come up with a biological solution or chemistry application that will help clean it up.”
This year the state Legislature passed a bill lifting restrictions on coal-fired plants. Nobody is standing in line with proposals to build more coal plants in Minnesota. But Great River Energy (GRE) wanted to import coal-fired electricity from its Spiritwood plant in North Dakota. GRE pushed the Legislature to lift the restrictions that have prevented GRE from realizing its plan.
What was Kelly’s personal position on lifting the so-called moratorium? “On a personal basis, I didn’t agree with it. On a business basis, I could understand why GRE wanted it.” Then Kelly restates his personal opinion, “No more coal would be fine with me.”
I ask Kelly whether he is like a lot of other utility operators who dislike the government forcing them to comply with regulations. He said: “I come out of accounting and finance. I just need the rules of the road. And the utility can’t conduct its own research and development. So, I have always looked to the government to produce the science.”
Sometimes it is more personal. Xcel has a contract to import hydro-electricity from a Canadian provider called Manitoba Hydro. A documentary was produced saying Manitoba Hydro’s flooding of waterways was displacing Indian tribes, inundating burial grounds and destroying forests. Representatives of the tribes contacted the CEO of Xcel and he went to Manitoba to meet with them, and to look at the project.
He came away moved by what he saw. “It was true,” Kelly said. “There were dead trees and it was ruining some of their burial grounds.
“I met with Manitoba Hydro and told them the Indians were right. Now Manitoba is cleaning it up. I was a little skeptical, but sure enough, they were right.”
In a week he will be gone. He says he doesn’t know exactly what he’ll do, and will not rush to make a lot of promises. He does know one thing, though, and that his future will not be in utilities. I’m tempted to write that we are losing Dick Kelly just when we need him. So I ask a question that has been on my mind since I began covering energy issues: Would Dick Kelly entertain the idea of becoming secretary of energy?
He responded: “I’ve thought about that in my wildest imagination. I’m not sure if I’m qualified. But if someone gave me the opportunity, yes I would. I wouldn’t mind making a difference in the direction we are going.”
Kelly concluded the interview with: “I would like to be a part of helping the country continue down the path we started on.”
We should be so lucky.