He started out in college reading meters. He’ll retire as the chief executive credited with turning Minneapolis-based Xcel Energy into a leader in renewable energy.
Xcel Energy CEO and chairman Richard C. Kelly said Wednesday he is retiring after 43 years with the company. The 64-year-old Kelly announced at Xcel’s annual shareholders’ meeting in Minneapolis that he’s stepping down on Aug. 24, before his 65th birthday on Sept. 5.
Benjamin G.S. Fowke III, currently president and chief operating officer, will succeed Kelly as chairman and CEO. Fowke, 53, was chief financial officer from December 2008 to August 2009, when he became COO.
“I feel fortunate to have worked for this company,” Kelly said, choking up as he addressed the meeting at Xcel headquarters. “It’s been an exciting part of my life for not just the last year but the last 43 years.”
Kelly read meters for Xcel’s Colorado division while he was in college. After graduating in 1968, he entered the auditing department, got a master’s degree in administration and held a number of finance-related jobs with New Century Energies and Public Service Co. of Colorado before New Century merged with Northern States Power of Minneapolis in 2000 to form Xcel.
He was groomed for the top spot at Xcel, holding the positions of chief financial officer, chief operating officer and president and CEO before he replaced Wayne Brunetti in 2005 as chairman and CEO.
Kelly took over when Xcel was weakening. The company had taken a $2.8 billion charge after a high-flying energy trading subsidiary, called NRG, declared bankruptcy.
Since then, Xcel seems to have recovered in Wall Street’s eyes.
“Xcel has quietly but consistently put together above-average earnings growth for its shareholders,” said Paul Franzen, an analyst for Edward Jones Research in St. Louis.
From 2005 to 2010, Xcel posted an average annual earnings growth rate of 7 percent, while most utilities saw growth in the 4 percent to
5 percent range, he said.
Franzen said he was happy to see Fowke replace Kelly because the two have worked closely together.
Many environmentalists praise Kelly for embracing renewable energy. Xcel is the nation’s utility leader in using wind energy and expects to meet a goal of deriving 30 percent of its energy in Minnesota from renewables by 2020.
“I tip my hat to Dick Kelly for bringing Xcel into the 21st century,” said Michael Noble, executive director of the nonprofit advocacy organization Fresh Energy.
Some environmentalists disagree. Kelly failed to support more community-based wind projects and instead chose to maintain a cartel-like hold on renewable energy, said George Crocker, executive director of the nonprofit North American Water Office.
“That’s not leadership, that’s greedy profit-taking,” Crocker said.
Kelly said his environmental work was one of his biggest achievements, and he said Xcel officials would get ribbed by their peers for going after wind energy aggressively years ago.
“But we have the advantages other utilities don’t have,” he added, referring to the rich wind resources in Xcel’s midwest and western states.
Fowke said Xcel would continue the strategy set under Kelly.
Efforts at the state Legislature to loosen rules on coal plants don’t impress Fowke. “I think getting a coal-fired plant sited would be next to impossible,” he said.
Meanwhile, at the annual meeting, all management proposals passed except one to eliminate cumulative voting for directors of the board. Cumulative voting offers ways to allow minority shareholders at odds with management to get a voice on the board.
Leslie Brooks Suzukamo can be reached at 651-228-5475.
