Xcel Energy faces new pressure to leave the American Gas Association

Hart Van Denburg/CPR News
The Fort St. Vrain Generating Station west of Platteville in rural Weld County on Wednesday, November 3, 2021.

A coalition of environmental and racial justice groups in Minnesota and Colorado has a new message for Xcel Energy: It’s time to leave the American Gas Association, a powerful trade association fighting efforts to confront climate change through a broad shift to electric heating and cooking. 

In a letter sent Wednesday to Xcel Energy CEO Bob Frenzel, the coalition — which includes Sierra Club chapters in both states, the Union of Concerned Scientists and the Rocky Mountain National Association for the Advancement of Colored People — said the trade association is out of step with the company’s attempts to position itself as a leader on environmental issues. 

In particular, the advocates say the association is slowing policies that support a necessary shift away from fossil fuels. A recent NPR investigation found the gas association has spent decades casting doubt on research showing the health risks of gas stoves. More recently, the trade group has successfully lobbied for state laws that ban towns and cities from limiting natural gas in new homes.

“The American Gas Association is waging war against electrification and doing everything in their power to slow the transition away from natural gas,” said Patty O’Keefe, a senior field organizer with the Minnesota Sierra Club. “We see Xcel’s membership with the association as a direct contradiction of their commitment to clean energy.

Meanwhile, Karen Harbert, the president and CEO of the American Gas Association, said the trade group remains committed to meeting the country’s ambitious climate goals. She rejected any claims the natural gas industry isn’t an environmental leader, adding it’s invested in innovative carbon-reduction strategies other than electrification.

“Despite advocacy groups working to establish a one-size-fits-all energy policy that would drive up prices without significant environmental progress, this industry will continue to create and implement inclusive solutions which drive environmental progress for our customers and communities rather than playing favorites,” Harbert said. 

A spokesperson for Xcel Energy did not respond to CPR News’ request for comment. 

The letter comes after Eversource Energy, New England’s largest utility, left the association to focus on its efforts to cut planet-warming emissions. That departure marked the first time a major gas provider cut ties with the influential trade group due to environmental concerns.

Xcel Energy has promised to lead on climate change. It was the first investor-owned utility to commit to 100 percent carbon-free electricity by 2050, which prompted similar pledges from other power providers around the country. 

At the same time, the company has forged a deep alliance with the gas association. Beyond the utility’s membership in the trade group, CEO Bob Frenzel also sits on its board of directors.

On a financial level, environmental groups say the utility pays more than $500,000 in dues to the trade group annually. The coalition arrived at the figure by reviewing lobbying reports, which show about $24,000 in dues Xcel Energy paid to the association were spent on political influence efforts in 2021. That same year, the association told its members that 3.8 percent of dues went to lobbying, suggesting the company paid about $628,000 to the gas association.

That spending has already alarmed policymakers in Colorado. Earlier this year, Gov. Jared Polis signed a new law that bans utilities from recouping trade association dues from its customers. 

Xcel Energy has also stepped up to test a controversial climate strategy promoted by the gas association: mixing hydrogen in the natural gas supply. By blending the clean-burning fuel with traditional methane piped into homes and businesses, the association claims utilities can cut emissions without forcing people to switch to all-electric appliances. 

The strategy would also preserve a role for the company’s extensive gas network, which includes more than 26,000 miles of transmission and distribution lines in Colorado. Financial documents show that the system generated nearly $2 billion in revenue for the company last year, helping generate a record $1.7 billion in profit for shareholders. 

Xcel Energy is now trying to convince state regulators to approve a pilot project to test the idea in Box Elder Creek Ranch, a subdivision near Hudson, Colo. It’s already met resistance from residents who worry that adding hydrogen could crackpipe lines and damage existing appliances.