Rising from meter-reader to CEO, Xcel’s Dick Kelly has sound perspective on environment

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.”

Dick Kelly
Xcel Energy
Dick Kelly

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.”

What’s ahead
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.

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Comments (23)

  1. Submitted by Gregory Lang on 08/16/2011 - 12:16 pm.

    Xcel is a regulated monopoly so any enviormental “do-gooderism” is on the Xcel consumers “dime”!

  2. Submitted by david granneman on 08/16/2011 - 12:19 pm.

    i hope the directors of ecel wise up and show this guy the door. compairing the cost of electricity – coal – 2 cents a kilowatt – gas 6 cents a kilowatt – windenergy 14 cents a kilowatt. mr kelly’s ideas will skyrocket our energy cost and cause business to leave the state. i think they should put a box on your electric bill asking do you want coal produced electricity or wind produced energy. if you check wind – you bill is muliplied by 7. in addition to the high cost wind energy will require millions be spent on upgrading our electric grid. wind energy is a constantly varing source of electricity. our present grid relys on stable sources of electricity. this science for global warming is not done and is being revealed as dependent on faked manufactured data. minnesota need reliable stable low cost energy if the state is to grow and prosper. MR KELLY YOU NEED TO GO.

  3. Submitted by Dawn Mikkelson on 08/16/2011 - 12:29 pm.

    Curious if the documentary he’s referring to was “Green Green Water”? http://www.greengreenwater.com

    As the director of that film, I’m curious to learn the specific ways that “Manitoba is cleaning it up”. From my perspective, it appears that Manitoba Hydro has historically utilized significant PR spin to make what they’re doing appear environmentally friendly and talked a good talk about their treatment of the northern Cree and Metis communities. However, when it really comes down to it, building a couple bridges and cash payoffs that amount to the funding of a community center (as is the case in South Indian Lake) does little to alleviate the loss of a community’s economic and environmental sustainability. The emotional, environmental, economic, and spiritual wounds inflicted upon this community and broken promise from Manitoba Hydro and the Manitoba Government in the 1970’s of the “eradication of mass poverty” in exchange for this dam system still impact these communities profoundly and will for generations to come.

    I applaud Mr. Kelly for his personal commitment to this issue and speaking of it publicly. However, I remain unconvinced that “Manitoba is cleaning it up” in any other sense than their amazing ability to clean up their image in the media through a significant PR investment.

  4. Submitted by Lance Groth on 08/16/2011 - 12:29 pm.

    Too bad Mr. Kelly is retiring. We need more industry leaders like him.

    I share his sentiment when he said: “I don’t know how they can deny the science. I really don’t.” The answer is they can’t from the basis of science, but they can and do from the perspective of politics; sacrificing the future of their offspring for short-term gain. It is an immoral position.

    I do like the idea of an industry insider with a healthy respect for science as energy secretary. One thing that disappoints me with Mr. Obama is that he hasn’t made clean energy and climate change mitigation a major priority; although, his plate has been more than full and I do understand that one can fight only so many battles at once. Still, the clock is ticking.

    Personally, I believe it to be far too late for emissions reduction to be effective in avoiding major global warming induced climate change (though we must still pursue it vigorously). If there is still any hope, it is in developing technologies to directly remove CO2 from the atmosphere and sequester it. I had some hope when Richard Branson put up an X-prize for precisely this kind of technology some years ago, but I haven’t heard that anyone claimed it. Otherwise, we will get to the point as conditions worsen of looking at radical geo-engineering options such as shading the Earth from space or the upper atmosphere, and that is fraught with danger and high cost.

  5. Submitted by Don Shelby on 08/16/2011 - 12:33 pm.

    This was a story about a good leader who broke the mold. If his windpower initiatives were “do-gooderism on the Xcel consumers “dime,” as you say, would it surprise you that wind is Xcel’s least cost generating source? The regulations you speak of were exceeded by this man’s leadership.
    Don Shelby

  6. Submitted by David LaPorte on 08/16/2011 - 12:59 pm.

    I’ve been an Xcel customer for 30 years. I’m happy to pay more if it means that we’re leaving the world in better shape for our children and grandchildren.

    I just hope that next CEO shares Dick Kelly’s philosophies.

  7. Submitted by Brian Nelson on 08/16/2011 - 01:44 pm.

    David: if you remove the subsidies from coal the price would be astronomical. You are already paying through the nose for coal through your taxes. Secondly, the issue of climate change is over. What’s funny is that so many deniers can’t point two a single study (or a thousand studies) and show what is wrong with the evidence. The claims of “junk science” is the result of laziness and conservative cowardice.

  8. Submitted by Robert Moffitt on 08/16/2011 - 02:33 pm.

    When I read a great profile this this, I’m reminded that Jim Thome isn’t the only old guy around these parts who can still hit them out of the park.

    Congratulations, Don, on another well-written column.

    I’ll rather have an “environmental do-gooder” running my utilty that an “environmental do-worser.”

  9. Submitted by david granneman on 08/16/2011 - 03:54 pm.

    New Study of NASA Data May Debunk Global Warming Predictions


  10. Submitted by david granneman on 08/16/2011 - 04:00 pm.

    JUNEAU, Alaska — A federal wildlife biologist whose observation in 2004 of presumably drowned polar bears in the Arctic helped to galvanize the global warming movement has been placed on administrative leave and is being investigated for scientific misconduct,


  11. Submitted by Lance Groth on 08/16/2011 - 04:30 pm.

    Mr. Granneman may profit from reading this short article, “Conservative’s Conversion on Climate Change”:


    I make particular note of this passage:

    “…addressing climate change today is an ethical and moral imperative. Failing to do so is a repudiation of our responsibilities both to each other, and most particularly, to future generations. It is a breach of faith, trust, and duty, of enormous magnitude.”

    Indeed. Denialism is immoral, plain and simple. Anyone who professes to have “family values” cannot logically be a denialist, if they have any integrity.

  12. Submitted by david granneman on 08/16/2011 - 05:50 pm.

    the majority of americans believe the data is false

    69% Say It’s Likely Scientists Have Falsified Global Warming Research – Rasmussen Reports™

  13. Submitted by Tim Larson on 08/16/2011 - 10:15 pm.

    #7 //”Secondly, the issue of climate change is over. What’s funny is that so many deniers can’t point two a single study (or a thousand studies) and show what is wrong with the evidence. The claims of “junk science” is the result of laziness and conservative cowardice.”

    It’s all right here if you’re willing,and not too “lazy” to look.



    As to Mr. Kelly, a man I admire greatly, and his “thoughtful” statement “I don’t know how they can deny the science. I really don’t.”

    As you’ve said. “The problem is, he’s not a scientist.”

  14. Submitted by Joe Musich on 08/16/2011 - 11:04 pm.

    Mr Shelby

    You wrote recently about Tony Hayward showing up in Minnesota To try to use his extraordinarie communications skills to leverage the desire to “surgically mine” rare mierals in northern Minnesota. It would be worth your time to gain perspective of the simiarities between northern Miinesota and the Mississsipi River gulf. This guy has an interview with the mystery writer James Lee Burke embedded with Burke’s concern with the BP oil spill.


    Then click on Burke to listen.’


  15. Submitted by Gregory Lang on 08/17/2011 - 02:30 am.

    the article cited in comment #11 was written by Micheal Stafford, an ex RINO who helped found the “Coffee Party”! a counter to the “Tea Party” which has received virtually no mainstream media coverage.

    Like Andrew Sullivan, Micheal Stafford “Jumped the shark” long ago.

    BTW: the Pentagon actions were a “what if” scenario that was studied. The Pentagon didn’t anticipate the “Arab spring” uprising triggered by high grain prices due in large part to the fifteen million US acres of corn grown for mandated ethanol fuel.

  16. Submitted by rolf westgard on 08/17/2011 - 04:08 am.

    Nuclear power is Xcel’s lowest cost and most reliable fuel source. Xcel runs a program called Windsource where you pay EXTRA to support wind energy.
    The notion that wind power “competes” with natural gas is a joke. Wind power “requires” extra natural gas in order to back up all those times when wind isn’t producing. The constant cycling of those gas plants in Xcel’s Colorado region is causing more global warming emissions per a recent Bentek study.
    Kelly is right about the threat of global warming, but wind power isn’t the answer.

  17. Submitted by Don Arnosti on 08/17/2011 - 02:30 pm.

    I have definitely noticed a sensible turn in the management of Xcel over the past decade. It has been a pleasure to have my power company working on solutions to pressing problems facing our kids, rather than arguing over semantics or engaging in small-minded squabbling like our elected representatives, and many of the commentators on this article.

    Come on, people, let’s work together for the common good – we can have a good life and a strong economy only if we all pull together.

    PS I’ve been a 100% Windsource customer for years – and I’ve noticed the extra money I’ve invested has ranged from a small rebate (one month) to usually $3 or $4 per month extra – not 7X the usual cost.

  18. Submitted by rolf westgard on 08/17/2011 - 02:47 pm.

    I am an Xcel Energy shareholder because I have confidence in the company and its management and those three low cost reliable nuclear reactors.
    I also like to call a spade a spade. Research on renewable energy is useful, but at this point renewables aren’t doing anything for our kid’s future.
    Xcel is testing a Japanese battery to back up a small wind farm. The battery costs $4-5 million, is the size of two 18 wheelers, & has to be kept at 500 degrees. Its total storage capacity equals less than 20 seconds of output from Prairie Island. But it makes our energy ignorant legislature think we have an answer to wind’s intermittent output.

  19. Submitted by Don Arnosti on 08/17/2011 - 02:54 pm.

    It is hard to calculate total cost for a technology which has waste disposal responsibilities which span millennia. I do not wish to burden future generations with a disposal cost because I’m using a bit of power for my laptop right now. How would we feel if somebody 500 years ago had used some power for heat or light and we, today, had to safeguard their waste dump?

  20. Submitted by rolf westgard on 08/17/2011 - 03:05 pm.

    I’ll probably do another class on nuclear energy and spent fuel disposal in winter quarter.
    Spent fuel storage is not a trivial problem, but it is doable. Obama didn’t help when he trashed Yucca Mountain. And the stuff that has millennia long half lives is not very radioactive. It’s the 30 year material that is the problem.

  21. Submitted by Tim Larson on 08/17/2011 - 10:04 pm.

    //Denialism is immoral, plain and simple. Anyone who professes to have “family values” cannot logically be a denialist, if they have any integrity.

    I don’t think I’ve ever seen a statement that does a better job of illustrating the problem with this whole argument.

    I never needed a reason to conserve, and live below my means. That was drilled into my head by parents who were children of the depression.

    What’s immoral is that we seem to need a political reason to “believe” in anything these days. If your “team” is for it then it must be the truth. When it’s something that should just be a basic lesson of life. Without all the extraneous BS.

    I have serious questions about your definitions of, morality, family values and logic.

  22. Submitted by Beth Wellington on 08/19/2011 - 05:00 pm.

    Mr. Shelby, thanks the piece, which I cited in my piece The Guardian published. You can find a link here: http://bethwellington.blogspot.com/2011/08/more-mtr-madness.html

  23. Submitted by Eric Sandeen on 09/13/2011 - 12:10 pm.

    Mr. Granneman – “i think they should put a box on your electric bill asking do you want coal produced electricity or wind produced energy. if you check wind – you bill is muliplied by 7.”

    They give you that choice already. Anyone who wants to can sign up for wind power in Minnesota, with the WindSource program. I’ve done it for the last 10 years for 100% of my bill, and the cost multiplier is about 1.03, not 7.

    When you use wind, Xcel removes the fuel charge from your bill, so the difference in cost is very small. On my last bill, it was an increase of $0.009/kWh, increasing my total electric bill by a whopping 3%. The average Minnesota resident with an 800kWh/month bill would pay around $7/month for wind.

    If that’s too steep, you can opt to cover only a portion of your usage with wind power. (Or do a little conservation to get below average) 🙂

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