CEO who made Xcel a leader in wind power will step down, stay on board

Ben Fowke will retire in August after 10 years as chief executive of Xcel Energy Co., his tenure marked by the company's industry-leading role in the nation's move from fossil fuels to clean energy.

Bob Frenzel, Xcel's current president and chief operating officer, will succeed him as CEO, the company announced Thursday.

Fowke, 63, will remain on the Minneapolis-based company's board and serve as executive chairman, focusing on national energy policy.

Fowke was named Xcel Energy's chair, president and CEO in August 2011.

"I really think it has been a great decade," Fowke said in an interview. "One of the things I am most proud of is our leadership in the clean-energy transition."

Fowke hailed from the Colorado utility New Century Energies, which merged with Xcel in 2000. When Fowke took the baton in 2010 from retiring Xcel CEO Richard Kelly, the company had already established itself as a leader in wind energy.

Fowke pushed Xcel considerably further, with the company regularly ranking as one of the nation's top wind-power utilities.

In 2011, 53% of Minnesota's in-state electricity production came from coal and 13% from wind. By 2020, coal generation had fallen to 25% while wind had risen to 22%, according to Minnesota Department of Commerce data.

Xcel, by far the state's largest electricity provider, has driven that change. In 2018, Xcel became the first major U.S. utility to announce plans for 100% carbon-free electricity by 2050.

"Ben has been an outstanding leader for Xcel Energy and a champion — at the company and throughout our industry — for building a clean-energy future while maintaining affordability and reliability for our customers," Chris Policinski, Xcel's lead independent director, said in a statement.

Fowke has been a fixture on the Star Tribune's annual list of Minnesota's highest-paid CEOS, taking in $21.8 million in 2020 and a total of $118 million over the past six years.

In pursuit of its carbon-free goals, Xcel has in recent years announced the early closure of all four of its big coal-fired generators in Minnesota, three of which are in Becker. The first two are slated for shutdown in 2023 and 2026, the other two by 2030.

Like many electric utilities that are abandoning coal, Xcel has increasingly moved to natural gas-fired generation, and plans to build an $800 million gas plant in Becker by the mid-2020s.

The company says it's needed to make up for lost coal power, though environmental groups strongly oppose it. They say solar, wind and batteries can fill the gap, while a new gas plant is contrary to Xcel's goal of 100% carbon-free power by 2050.

Xcel and clean-energy groups agree that getting to 80% carbon-free power can be done with today's technology. But covering that last 20% — both technologically and economically — will be one of Xcel's and the industry's biggest challenges, Fowke said.

"We have a great opportunity, but we have to be ever mindful of what our customers want: 24/7 reliable and affordable power," he said.

While Minnesota's residential electricity prices are in line with the U.S. average, they have increased in recent years at a faster rate than they have nationally, federal data show.

Frenzel, 50, joined Xcel Energy as chief financial officer in 2016, previously having worked as CFO for Luminant, a subsidiary of Energy Future Holdings.

He also worked as a vice president in Goldman Sachs' investment banking division and before that was a senior consultant at Arthur Andersen. He served in the U.S. Navy for six years as a nuclear engineering and weapons officer.

"I am honored and humbled by the support and confidence that Ben and the board of directors have placed in me," Frenzel said in a statement. "Xcel Energy is in a strong position thanks to Ben's leadership."

Xcel's stock closed Thursday at $71.12, up 95 cents. The stock was around $28 when Fowke took over as CEO in 2011. After a few lean years, the stock began steadily rising in 2015.

From 2010 through 2020, Xcel shareholders saw 229.6% total return, compared with 212.2% for its peer group of utility companies, Xcel said in a filing to the U.S. Securities and Exchange Commission.

Xcel's two largest markets are Minnesota — where it is also the second largest gas provider — and Colorado. In addition, the company has operations in Texas, New Mexico, Wisconsin, the Dakotas and Michigan's Upper Peninsula.

Xcel has two nuclear power plants in Minnesota, which together provide about one-quarter of Minnesota's electricity and are critical to Xcel's carbon-free energy plans.

Fowke said he was proud of the nuclear fleet's progress over the last decade.

Ten years ago, Xcel's reactors weren't in the top quartile of the country's best-performing nuclear plants as they are now. Also, in the first half of the decade, large cost overruns at the Monticello nuclear plant were a major issue before state utility regulators.

In recent years, Xcel has sunk well over $1 billion into both plants for all sorts of capital improvements. They are now among the best performing nuclear plants in the nation, Fowke said.

"We have come a tremendously long way in 10 years," he said.

Includes reporting from staff writer Patrick Kennedy.