Key Points
• Carbon reduction strategies can be cost-effective. They are science-based and are driven by demands from communities, consumers, and Wall Street.
• A mix of renewables and conventional power sources will be needed.
• The new energy economy brings many diversified high-skilled and high-paying jobs to our communities.
Sen. John Cullerton (IL)
Tom Finneran (Moderator)
Sen. Rodric Bray (IN)
Sen. Martin Looney (CT)
Sen Larry Obhof (OH)
David Hudson
SEPTEMBER 19-22, 2019
New Energy and Jobs – A New Workforce for the States
David Hudson
President
Texas and New Mexico of Xcel Energy
Southwestern Public Service Company (SPS)
David Hudson is President for Texas and New Mexico of Xcel Energy, the Southwestern Public Service Company (SPS). The company is a multi-state integrated generation, transmission and distribution utility system, which serves 3.6 million electricity customers and 2 million natural gas customers. The company foresees a transformation of electric production supply into economic low-carbon technologies based on increased renewables and new natural gas technologies that capture carbon.
Jim Blundell (T-Mobile), Sen. Rodric Bray (IN) and Sen. Bob Peterson (OH) posed during a break in the sessions. The exchange of information and experience makes the Forum a valuable addition to the legislative calendar.
“Climate science supports our carbon reduction goals,” Mr. Hudson said. And this demand is reinforced by communities, customers, and Wall Street. The company is on target to meet those goals. It achieved 38% carbon reduction in 2018, anticipates 80% by 2030, and aspires to be 100% carbon-free by 2050.
Xcel's Carbon Reduction Plan
The Path to Zero Carbon
On the path to achieving its zero-carbon vision, the Company also is committed to:
• Protect energy reliability and affordability
• Engage support from our states and stakeholders
• Advocate for constructive public policy
• Develop carbon-free 24/7 technologies for 2050, including power to gas, deep rock geothermal, natural gas with carbon capture and storage, advanced nuclear, and storage technologies.
Xcel’s carbon-reduction strategy includes the country’s largest multi-state wind investment plan, which will generate a net savings, as the capital costs of projects are more than offset by future avoided fuel costs. The 12 new wind projects combined are enough to power 1.7 million average homes annually and avoid 142 million tons of carbon emissions, while supporting $800 million in landowner lease and property tax payments. The adoption of solar sources will bring an additional 215 MW to New Mexico interconnected to SPS transmission, and an additional 190 MW will be purchased by SPS.
Challenges remain to be addressed, he noted. You can’t count on wind all the time, nor on solar at night. Developing new storage technologies will be required to overcome these barriers.
New Energy Workforce Opportunities
Xcel’s 12 new wind facilities will create 2,700 construction jobs and 150 full-time jobs. The changing technologies of power generation require highly-skilled workers with increasingly diversified job requirements. They will require technical skills to serve as
generation operators for power, wind, and solar generation, line workers, substation technicians, and control center operators. “These highly-paid, high-skilled technical workers don’t necessarily need a college degree,” Mr. Hudson noted. “A four-year apprenticeship to become a journeyman is the best training.”
Sen. Mary Kay Papen (NM) and Suzanne Barham (McDonald's Corporation) chatted between sessions. The Forum provides opportunities to meet in a relaxed setting.
Discussion
Sen. John Cullerton (IL): The Corporate Average Fuel Economy (CAFE) standards still urge for better miles-per-gallon engines and use of electric vehicles. But Mr. Hudson noted that transportations emissions are going up and that 5.1 tons of carbon are emitted per car each year. Why is this?
Mr. Cummins: Transportation represents more than 30% of greenhouse gas emissions. Gas is cheap, and people are buying and driving bigger cars. The real-world fuel economy of new cars is about 25 miles per gallon. There are 250 million cars in the US and only 11 million are electric. At the same time, the Trump administration is attempting to revoke California’s more stringent standards (also adopted by 14 other States) and lower them to federal levels. Reduction of carbon emissions from transportation sources requires a strong federal standard, but this is not where we are headed.
Tom Finneran (Moderator): While there are promising technologies to improve gas mileage in the future, today’s option is ride-sharing. But a shared system doesn’t appeal to American drivers.
Sec. Propst: Decarbonizing transportation requires a broad array of technological and social policies. We started with the Energy Transition Act to decarbonize the energy sector. Transportation is up next. Governors from the 8 western states – Arizona, Colorado, Idaho, Montana, Nevada, New Mexico, Utah, and Wyoming – agreed to create an Intermountain West electric vehicle (EV) Corridor that will make it possible to drive an electric vehicle across major highways in the west with access to charging stations.
Mr. Cummins: Battery technology is a big challenge. Improved, accessible mass transportation options are a better solution and millennials are more receptive to not using cars.
Kevin Lynch (Avangrid Renewables, LLC): New Mexico is a big oil- and gas-producing state and leakage from them is a source of methane. How has New Mexico been able to develop model methane regulation with such big stakeholders? Was it a collaborative or adversarial process?
Sec. Propst: The process is critical for developing methane regulations in an oil and gas State like New Mexico. It is essential to have all who are involved and for data to drive the discussion. Methane is a problem you can measure and see the consequences. We created a level playing field by keeping all the industry stakeholders involved in the process. Industry is innovating and sharing best practices. So far we have gotten to the rule-making stage quickly by using data and science, taking input, and then drafting sensible, practical and workable rules. To obtain data, we are working with Project Canary, which provides technology for early detection of methane leaks and publishes a public database of their measurements. (See: https://www.projectcanary.com/continuous-monitoring-of-fugitive-gas-emissions/)
Tom Finneran (Moderator): Can methane be captured and pipelined so that it can be exported to markets, such as Asia for example?
Mike Kiely (UPS): UPS is now buying “renewable natural gas” (RNG) (methane) instead of liquid natural gas for their fleet. When organic matter, such as food and animal waste, decomposes, a mixture of primarily methane and carbon dioxide, is released, captured, cleaned, and injected into standard natural gas pipelines. Vehicles that burn natural gas can use renewable natural gas (methane-based) instead — and reduce their greenhouse gas emissions by 3000%.
Editor’s Note: The key difference from fossil natural gas is that RNG is partly or fully carbon neutral, since the carbon dioxide contained in the biomass is naturally renewed in each generation of plants, rather than being released from fossil stores and increasing atmospheric carbon dioxide.
Mr. Cummins: When methane gas is released into the atmosphere, it contributes 25 times more to global warming than carbon dioxide. So preventing methane release from RNG is imperative. However, RNG may provide advantages over using diesel in trucks.
Sen. John Cullerton (IL): Our State legislature has been asked to subsidize nuclear power. What is the future of nuclear power plants?
Mr. Hudson: There is strong public adversity to nuclear power and the permitting process is challenging. However, new smaller modular units that can be replicated could be a source for meeting excess demands in the transmission system.
Sen. Rodric Bray (IN): What is the role of Federal and State subsidies for renewable energy sources? Are renewable approaches viable without subsidies?
Mr. Hudson: Currently, subsidies are making wind power affordable, but these subsidies end in 2020. Once wind generation opportunities are saturated, the next step will be large-scale photovoltaics, which offers the opportunity to have them manufactured in the US.
Sec. Propst: Every form of energy is subsidized. The nuclear industry, for example, has the Price-Anderson Act, which covers liability claims of members of the public for personal injury and property damage caused by a commercial nuclear power plant accident.
Mr. Cummins: Battery technology is the big hurdle for renewables, and developing this technology could be a role for the Federal government – like the first moon shot. However, there are supply chain issues, especially as China is locking up the metals needed for batteries and they are pushing electric vehicles. But the amount of solar power hitting the earth from the sun is astronomical, and we need to be able to store this energy at night.
Sec. Propst: There’s been so much progress in the past 5-10 years; initially, 30% of energy in transmission lines was from renewables; now it is 50%. It is likely that we can get to 70%. This is not just naïve optimism, but a realistic projection based on the data.
Sen. Martin Looney (CT): What is the timetable for fuel cell technology coming online? Connecticut is pushing to convert to liquid natural gas, but methane is a concern.
Mr. Hudson: Fuel-cell technology is worth looking at for the future. Liquid natural gas (LNG) does not leak methane during transport, but methane leaks may occur during production of LNG.
Sen Larry Obhof (OH): Every form of energy generation is subsidized or not taxed. Ohio has given subsidies for developing 2 nuclear power plants; 90% of the State’s carbon-free energy comes from nuclear sources.
Mr. Hudson: Adding nuclear power plants is a policy issue based on consumer input. Nuclear power is reliable, but not flexible. There is currently some testing to see if nuclear sources could be more flexible – able to be turned on and off.
Sec. Propst: But storage of radioactive waste that lasts for eons is the main challenge of nuclear sources.
Kevin Fisk (LKQ Corporation): Workforce issues are a big struggle. Our company has contracts with UPS and USPS to rebuild their truck engines, so we have lots of work. But, despite good pay and incentives, we cannot find and retain people for these jobs. Is the same thing happening for the new energy sector?
Mr. Hudson: Workforce development is a definite challenge even in places with high unemployment. It is a generational issue. Many young people do not want to climb poles or work at hard physical jobs. The millennials and Gen Z do not have a commitment to stay with a company. We are focused on training and educating local people with the hope that they will stay in town and grow within the company.
Speaker Biography
David Hudson
David Hudson is president of Xcel Energy - New Mexico and Texas.
From 2010 through 2013, Hudson served as vice president, Customer and Community Relations. A native of Lubbock, Hudson began his career in 1983 as a rate engineer, becoming director of regulatory administration in 1997. Hudson testified and led multidisciplinary teams in preparing, executing, and negotiating retail rate and regulatory proceedings in Texas, New Mexico, Oklahoma, Kansas, Colorado, and Wyoming, including testimony before federal regulators in Washington, D.C. Active in many legislative negotiations, Hudson assumed responsibility for SPS’s strategic planning in 2008, after 25 years in the regulatory arena. With a detailed understanding of SPS activities and operations, he served on numerous influential committees, representing customer interests at the Southwest Power Pool and Federal Energy Regulatory Commission.
Hudson earned a Bachelor of Science in industrial engineering from Texas Tech University, and a Master’s of Business Administration from West Texas State University. He is a Texas licensed professional engineer.
Hudson volunteers with United Way and serves on the boards of numerous civic groups, including Amarillo Parks and Recreation Commission, The Bridge child advocacy center, and Panhandle Twenty/20 strategic planning group.
Climate science supports our carbon reduction goals. And this demand is reinforced by communities, customers, and Wall Street.
Xcel’s carbon-reduction strategy includes the country’s largest multi-state wind investment plan, which will generate a net savings, as the capital costs of projects are more than offset by future avoided fuel costs.
Xcel’s 12 new wind facilities will create 2,700 construction jobs and 150 full-time jobs.
Reduction of carbon emissions from transportation sources requires a strong federal standard, but this is not where we are headed.
Decarbonizing transportation requires a broad array of technological and social policies.
The process is critical for developing methane regulations in an oil and gas State like New Mexico. It is essential to have all who are involved and for data to drive the discussion.
Vehicles that burn natural gas can use renewable natural gas (methane-based) instead — and reduce their greenhouse gas emissions by 3000%.
Every form of energy is subsidized.
Battery technology is the big hurdle for renewables, and developing this technology could be a role for the Federal government – like the first moon shot.
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