Annual meeting highlights goal of net-zero carbon electricity
A shareholder talks with MGE's Dan Clausen by a display featuring energy production data from MGE's Saratoga Wind Farm.
Chairman, President and CEO Jeff Keebler shared at the MGE Energy annual meeting of shareholders in mid-May his vision for net-zero carbon electricity from the company's regulated utility, Madison Gas and Electric (MGE), by 2050. The new, ambitious target reflects his vision for the future and the company's path toward deep decarbonization as technologies continue to evolve.
"We need to align ourselves with the work of the Intergovernmental Panel on Climate Change (IPCC) and its assessment of limiting global temperature increases to 1.5 degrees Celsius by 2050," Keebler said. "Our net-zero carbon goal is aggressive, and it will require technologies still emerging and not yet cost-effective, but it is where we need to be."
Climate science partnership
A shareholder talks with MGE's Debbie Branson in front of a plug-in hybrid Honda Clarity.
Keebler also announced MGE will be working with scientists at the University of Wisconsin-Madison, Nelson Institute for Environmental Studies and Department of Atmospheric and Oceanic Sciences to help evaluate the company's net-zero carbon goal in the context of the analyses done by the IPCC. The university will provide expert input and perspective to ensure MGE's goal is consistent with the IPCC assessment.
The company already has been working toward carbon reductions of at least 80% by 2050, from 2005 levels.
Before an audience of nearly 1,600 shareholders, Keebler said MGE has developed clean energy projects that will increase the company's owned renewable capacity by more than 500% in the near term. Those investments include:
Keebler also discussed MGE's three key strategies to achieve deep decarbonization: reducing carbon intensity of electric generation, electrifying transportation and engaging customers around energy efficiency.
Capital expenditures reflect strategic direction
MGE Energy Chief Financial Officer Jeff Newman reported capital expenditures in 2019 are projected to be $198 million, of which $53 million will go toward construction of Badger Hollow and Two Creeks Solar. The company also is investing substantially in new internal systems, including a new customer information system, which will enable MGE to offer new programs, products and services more efficiently and effectively and help to facilitate future market growth.
MGE Energy closed 2018 with a five-year annualized total return of nearly 12%, which outpaced major indices. Within the last five years, MGE Energy shareholders also have seen 23% dividend growth.
Directors F. Curtis Hastings, James L. Possin and Mark D. Bugher were elected at the annual meeting to serve three-year terms expiring in 2022.
Electrification efforts, EV resources on display at meeting
Transportation accounts for 29% of greenhouse gas emissions in the U.S. The electrification of transportation is one of MGE's three key strategies for reducing carbon emissions.
MGE is working with customers, stakeholders, municipalities, community partners and others to grow the use of electric vehicles (EVs) and to facilitate charging options throughout our community. For example, most recently, MGE has:
- Introduced "Explore My EV," an online tool to compare the costs of plug-in hybrid and all-electric vehicles to gasoline-powered models. The "Explore My EV" tool considers commute distances, available tax credits and maintenance costs, among other things. "Explore My EV," available at mge.com/exploremyev, also features MGE's programs for home and public charging and charging at home using clean electricity.
- Partnered with the ridesharing company Lyft to grow awareness of the benefits of EVs. The two companies will offer a $500 bonus to Madison-area EV drivers who sign up to drive with Lyft. EV drivers will share with their customers their insights into the benefits of going electric.
- Continued to expand the company's public charging network, which is powered by wind. One of MGE's newest fast chargers is located at The Home Depot off the Beltline Highway and Verona Road in the city of Madison. MGE also recently added Level 2 charging stations to the City of Madison's new South Livingston Street parking garage and at Madison College.
First quarter earnings report
MGE Energy produced earnings of $24 million, or 69 cents per share, for the first quarter of 2019 compared to $20 million, or 58 cents per share, for the same period last year.
Gas net income increased due to an increase of more than 9% in gas retail sales related to higher customer demand resulting from colder weather and an increase in retail customers. Electric net income was positively impacted by the company's investment in the Saratoga Wind Farm.
Smart thermostat program expanding
MGE is expanding its smart thermostat program this summer to welcome more customers and different types of smart thermostats. The company's initial program, which launched in 2017, involved about 500 residential customers with Nest thermostats. The expansion doubles the size of the program and includes Nest and other smart thermostats.
When temperatures climb, the demand for electricity increases. During these peak periods of electric use, MGE must use the maximum capacity of electric generation, transmission facilities and distribution lines to serve the needs of all customers. Reducing peak demand can help control costs for customers long term and help to manage carbon emissions from electric generation.
Smart thermostats can be controlled remotely through communication technologies. MGE Connect helps MGE better understand the potential for reducing electric peaks using smart technologies. Data from the original program show most customers allowed the minor temperature adjustments.
Jeffrey M. Keebler, Chairman, President and CEO