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The Daily Cardinal Est. 1892
Tuesday, August 03, 2021

Though Madison Gas and Electric has made recent efforts to pursue renewable energy options, some of the company’s shareholders are worried about their commitment to the cause. 

Madison Gas & Electric, shareholders fight over renewable energy proposals

With climate change impacts becoming more visible, environmentalists are turning to Madison Gas and Electric, the energy giant powering the city and its suburbs, in a bid to speed up its green energy initiatives. 

A small but dedicated group of MGE shareholders have taken the issue into their own hands and hope to enact change from within the company. Founded in 2014, MGE Shareholders for Clean Energy now has a little over 100 members, though co-founder Beth Esser estimated 15 to 20 are active.

The group is trying to pressure MGE to speed up their conversion to renewable energy, which includes a plan to have 30 percent of their energy output be renewable by 2030 and 80 percent by 2050.

“Our motto has always been ‘What’s good for the planet is good for our pocketbook,’” Esser said. “When we started, MGE did not have even their 30 percent [renewable energy] by 2030 goals and they were proposing a fixed rate increase that was a huge disincentive to renewable energy and energy efficiency.”

Earlier this year, the group submitted a shareholder resolution to the company requesting they draft a “public report … describing how they can provide a secure, low cost energy future for their customers and shareholders by eliminating coal and moving to 100% renewable energy by 2050 or sooner.” 

MGE hired a law firm to fight the resolution. Esser said the Securities and Exchange Commission ruled in favor of MGE and judged the resolution to be “micromanagement.”

Esser said the decision by the SEC was not the end of the road but was rather just another obstacle for the shareholder group to overcome.

“We’ve been working on pushing MG&E to do more for clean energy since 2014 and this SEC rule will not stop us,” she said. “We’re continuing on until we see MG&E really being the leaders that they say they are. We want to see that actually happen.”

MGE has pushed back against this criticism by highlighting the green energy initiatives they have put in place in recent years, which they said have increased their owned renewable capacity by more than 500 percent. 

Included in the latest additions to MGE’s renewable capacity are a 66-megawatt wind farm in Iowa, two proposed solar fields in Wisconsin and an expansion of the existing solar field next to Dane County Regional Airport. 

“Growing MGE's use of renewable energy, and thereby reducing carbon intensity in electric generation, is a key strategy for achieving deep decarbonization,” said Steve Schultz, corporate communications manager for MGE. “MGE is actively working toward deep decarbonization by advancing clean energy projects and programs for customers.”

Schultz also said MGE’s goals of 40 percent renewable energy by 2030 and 80 percent by 2050 are consistent with international benchmarks, but Esser does not believe these goals are ambitious enough.

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“We want them to listen to the science, which clearly shows that 80 percent reduction in emissions by 2050 is not enough,” she said. “The reality is, even though they are making steps … they have these long-term investments in two coal plants that they don’t really have a clear plan to rid themselves of and we want them to be honest. How are they going to do that? What are their plans for that?”

Though MGE does have long-term nonrenewable investments, Schultz said the company has supported both the city of Madison and Dane County in their pushes to expand renewable energy. He pointed out the role MGE has played on the county’s Council on Climate Change, which has advocated further pursuit of renewable energy sources. 

He also mentioned the partnership MGE has with the city, which includes assistance in Madison Metro Transit’s goal of making half of their bus fleet electric by 2035.

Though Schultz said there is no concern about profits taking a hit as the deadline for renewable energy approaches, Esser said she is somewhat worried about her investment. She believes MGE does not want to be truthful with shareholders about the costs of renewable energy because it could end their decades-long streak of annual dividend increases. 

“We think that it’s related to the bottom line of money for them,” she said. “If they came out with an honest report about what it will take to get them to move to 100%, that it could mean that would take a dip into those dividends.” 

She said the primary motivation for her activism was her children, whose college funds are reliant upon MGE shares.

“My concern over my investment and my concern over the environment are totally tied together because all of this is for the future [of my kids],” she said. “I want this to be a place for them to live a long and happy life and to be able to have their own children and grandchildren and I want my investment to do well.”

Though MGE has made demonstrable efforts to commit to renewable energy, Esser still thinks there is more to be done and urged MGE customers to take a closer look at where the company generates its electricity.

“I just think that people need to be looking between the lines,” she said. “MGE has removed coal from the Madison skyline, but they have investments in coal … and they purchase fossil fuels off of the grid. Even though it looks like they are the greenest utility out there, you’ve got to look a little bit deeper.”

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