As a major U.S. energy provider, Xcel Energy’s operations have a fundamental relationship to the environment. Not only do we rely on natural resources to serve our customers — from water to fossil fuels and even wind and sun — but our operations generate emissions and waste that we must carefully manage and reduce. Because of this connection, protecting the environment is one of our core values and a key focus for a more sustainable energy future. We expect our employees and others working for us to consider the environment at all times and continually find opportunities to reduce our impact in a cost-effective way for customers.
Our environmental commitment is based on a foundation of outstanding regulatory compliance, as we work to meet and surpass the many environmental rules and requirements that apply to our operations. Going beyond compliance, our goal is to demonstrate leadership and meet the expectations of our customers and the communities we serve. They depend on us to act responsibly and provide reliable, affordable energy that is increasingly clean—with fewer emissions, waste and other environmental impacts.
Our approach to environmental policy is practical, as we seek to balance environmental benefits with providing our customers affordable, reliable energy. We pursue proactive emission reductions and clean energy initiatives that support stakeholder interests and produce measurable environmental improvement while also controlling costs and strengthening the energy grid long term.
Xcel Energy has a corporate environmental policy that sets expectations for aligning our business practices with corporate commitments and environmental requirements. All company employees, contractors and vendors are required to follow the policy.
Engaging on policy issues with stakeholders is essential to our efforts, so we regularly discuss environmental and clean energy issues with policy makers, regulators, the environmental community and other energy providers. We often advance environmental initiatives and constructively participate in addressing issues, while keeping in mind and protecting the interests of our customers, communities and shareholders. In rare instances, we may oppose new regulations or policies when the rules are infeasible or the costs significantly outweigh the benefits.
As we engage on issues, we keep the following principles in mind:
We have a formal environmental management system designed to ensure continuous improvement and compliance with all applicable environmental requirements. Our management system provides:
We strive to operate in compliance with all federal, state and local rules and regulations. However, there are occasions when regulatory agencies issue notices of violation (NOVs) or other types of notifications of potential noncompliance for alleged exceedances of permit limits or regulatory requirements. These NOVs can potentially result in fines or penalties. Often there can be disputes about the alleged noncompliance, and even when it is our view that we remained in compliance, settlements are often reached to avoid the transaction costs of litigation and to cooperate with the regulatory agencies.
Every year as part of our internal and ongoing efforts to self-identify and self-correct any potential noncompliance issues, we conduct our own facility audits. In 2016, we conducted 99 internal environmental audits to help ensure compliance.
|Notices of Violation or Compliance Advisories||2||4|
|External Agency Audits or Inspections||83||83|
|Internal Audits Conducted to Ensure Compliance||89||99|
In the summer of 2015, Amarillo, Texas experienced record rainfall and flooding. As a result, several of the retention ponds at our Nichols and Harrington plants exceeded capacity and discharged wastewater to a permitted outfall. The discharged water was contained and migration was held to a minimum. However, several parameters of the discharge exceeded permit limits due to heavy sedimentation washing into the ponds. We reported these exceedances to the Texas Commission on Environmental Quality (TCEQ), which issued a compliance order. We met with TCEQ and petitioned to have the order removed due to the fact that the exceedances were caused by historical rainfall and flooding. TCEQ agreed but concluded that the record rainfall was not an affirmative defense to the permit exceedances. A final penalty of $15,000 was negotiated in 2016 for settlement of the order.
Environmental costs include payments for nuclear plant decommissioning, storage and ultimate disposal of spent nuclear fuel, disposal of hazardous materials and waste, remediation of contaminated sites and monitoring of discharges to the environment. As we’ve reduced emissions through the addition of environmental controls, the total costs of investing in and operating the controls has risen somewhat over time.
Operating expenses for environmental monitoring and disposal of hazardous materials and waste, including nuclear decommissioning and spent nuclear fuel disposal expenses, were approximately:
More detailed information regarding nuclear decommissioning and spent nuclear fuel disposal expenses is provided in our 2016 Form 10-K.
Capital expenditures for environmental improvements at regulated facilities were approximately:
Read our corporate environmental policy.
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