This fall, I was fortunate to help start an interesting conversation, along with Mike Thorson, board chair of Great River Energy (GRE) and Kandace Olsen, its vice president and chief culture officer. The conversation was in the GRE board room, and with sixty mid-career professionals brought together from all parts of the Minnesota business community by Heartland Group Leadership TLC. It’s also noteworthy that this meeting was the final convening of an 18-year series that has done 223 interesting and diverse conversations about ethical business, social responsibility, and how personal leadership in companies can be transformative for those companies.
Kandace told the story of 2013, a horrible year for GRE when their 15-year business plan was rejected by state regulators, their constituencies were divided over a solar initiative at the legislature, and the Obama Administration announced its national plan to reduce carbon pollution from the coal industry. As a utility with an energy mix that’s more than 70 percent coal, GRE’s leadership took the courageous step to seek out external stakeholders for deep engagement and advice. It conducted a process with the Great Plains Institute to “hear all the voices”, such as its largest industrial customers, lenders, regulators, and advocates (including me) seeking to reduce society’s dependence on fossil fuels.
It was clear from the stories told at our meeting that leadership from both GRE and Fresh Energy have set aside some pre-conceptions and barriers over the past three years by deeply listening and learning from the other’s perspective.
For my part, I learned how the recession of 2008 had stopped all growth at GRE – once the fastest growing electric utility in the Upper Midwest. Now, it’s facing no growth in its business, and even slightly declining sales as suburban development slows and energy efficiency technologies permeate their service area. I also learned how management was coping with financial losses on its purchases of wind power. Their purchases of wind power are very low-cost. But when everyone is asleep and farm processes and rural industries are closed for the night, it’s tough to buy wind power at four cents per kilowatt-hour if you have to sell it into the Midwestern wholesale market at two cents.
Based in part on those conversations, Great River Energy began to make very strategic shifts in their business, resulting in at least six big decisions over the past several years that Fresh Energy applauds as leadership worthy of national recognition:
- Accelerating the debt retirement of its coal assets, Coal Creek Station and Stanton Station, giving management more options to reduce reliance upon existing plants, sooner.
- Retiring the Stanton Station coal plant after a 50-year run of providing reliable energy and family-supporting wages, after it became apparent that costs to run the plant exceeded the market value of the electricity.
- Jump starting the promotion of electric vehicles in a huge way: hosting the first-ever “all electric room” at a major US auto show, the 2016 auto show in Minneapolis; offering ten years of wind power to any customer in their service territory at night-time discount rates, and for no “green energy” premium price; and partnering with Fresh Energy to help all auto dealers statewide learn that an electric company website is where car customers statewide can get quick and handy answers to the first question EV buyers have: “how and where do I charge my new electric car?”
- Partnering with the White House and the national group Natural Resources Defense Council to promote “community energy storage,” a brilliant GRE idea to convince homeowners that electric water heaters are a “battery in your basement” for wind power – providing a direct line from clean energy to home energy use.
- Modifying Coal Creek Station to enable it to throttle down whenever low-cost wind or gas-fired power is available at wholesale prices.
- Attracting data centers by offering commercial/industrial customers 100 percent renewable energy at no extra charge.
As is obvious, by listening deeply to GRE’s business challenges, I discovered some real win-win opportunities for Fresh Energy. Of course, we love switching cars and water heaters from fossil fuels to wind power! And I can honestly say that GRE is THE national leader crafting a strategy to grow their business by converting driving and water heating to wind power. Not only is GRE all-in, Fresh Energy has also gone public with the idea that expanding electricity dependence is a central part of our new three-year strategy to cut dependence on imported fossil fuels.
Instead of just advocating for electric companies to help customers get more efficient, and just advocating for electric utilities to buy more wind and solar power, now Fresh Energy is advocating for growing utilities’ loads – if they can grow their loads by cutting fossil fuel use elsewhere. Driving and water heating are just the first two examples: we took an even deeper dive into this question as part of a video project with the Minneapolis Foundation about how we “electrify almost everything”.
At the end of our conversation this fall, when the question was asked whether a Trump election will mean GRE will reverse its strategy to reduce coal dependence and expand environmentally desirable new energy sales, the answer from board chair Mike Thorson – on behalf of the management and the whole board – was clear: “We have our strategy set, we’re staying the course, and we intend to be on the right side of history.”