WisBusiness: CEO Pushes Energy Efficiency at MGE’s Annual Meeting

By Brian E. Clark


MADISON — MGE Energy Chairman Gary Wolter told shareholders at his company’s annual meeting Tuesday that “it’s time to kick energy efficiency efforts up a notch.”

In addition to increasing conservation, Wolter said MGE plans to increase its renewable energy base by between five- and 10-fold in the next decade.

“We need a level of commitment like the Manhattan Project or the effort that put the first man on the moon,” Wolter told more than 1,800 people at the Marriott West.

“It is not good public policy to waste energy,” Wolter said in an interview after his speech.

“It’s not just about the environment,” he said. “We need to accelerate conservation because energy may soon become a national security issue in the United States.

“Demand is growing in China and India,” he said. “Two billion people in Asia have walked onto the playing field and have changed our long-term energy future.

“We simply have to find another way and we plan to become a new breed of energy company,” he said.

Wolter said his company remains committed to business fundamentals, though he acknowledged that soaring natural gas prices hurt profits in 2005. And he said share prices have fallen in recent months, a decline he attributed to rising interest rates.

But he noted that that MGE – which distributes electricity to nearly 136,000 customers in Dane County and has roughly the same number of natural gas customers in seven south central and western Wisconsin counties – earned net income of $11.5 million in the first quarter of 2006, up from $8.2 million for the same period a year ago.

And he smiled broadly when he said that a $100 investment in MGE Energy stock in 2000 would have increased to $188 in 2005.

Wolter also detailed his utility’s investment in the Oak Creek power plants being built by We Energies on the shore of Lake Michigan. MGE will own 8.33 percent of the project and has paid $24.4 million so far toward the plants, which are projected to begin producing electricity in 2009.

He also explained why his utility has decided stop burning coal at its Blount Street plan on the isthmus in coming years – too much pollution – but said the utility would need to import more energy because of the change.

He also boasted about the completion of the West Campus Cogeneration Facility, which is jointly owned by MGE Energy and UW-Madison. It was completed on time and on budget in 2005 and will produce power for MGE customers, plus steam heat and chilled-water air conditioning for the UW-Madison campus.

But Wolter spent the majority of his talk urging shareholders to conserve by taking what he called “simple steps.”

If all MGE residential customers would replace one standard 60-watt lightbulb with a 15-watt fluorescent bulb – which provides equal light – the utility could save enough electricity in a year to power 1,800 homes.

To drive home the point, all shareholders received three fluorescent bulbs in gift bags to take home and install.

Come June, he said all MGE customers will receive a Power Tomorrow booklet detailing five energy steps they can put into use immediately.

“We’re not talking about painful lifestyle changes,” he said after the speech. “These are things people can do pretty easily.”

In September, he said his utility will begin holding workshops in which customers can learn more about energy conservation and ask questions of experts.

“I don’t know of any other any other utility that is backing up its conservation efforts with a program like this,” he said.

Wolter said he did not have a projection for how much energy the program might save.

“But I sense that it would be a lot,” he added, noting that similar efforts in the past two decades have saved 100 megawatts — the equivalent of a small power plant.

“Conservation, additional renewable energy sources and power from new generating units are key components of MGE’s “Energy 2015 Plan,” he said.

Wolter said he expects natural gas prices to remain volatile and said energy costs across the board will rise.

“Increasing prices will affect demand,” he said. “At some point that will change people’s behavior. It has already done that with some people.

“A growing environmental awareness and worries about foreign energy dependence and national security are coming together to force us to conserve,” he said.

“I predict more tax credits for things like hybrid vehicles and wind energy to reduce energy consumption,” he said. “Something has to be done.”