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United States

The Wright way - MidAmerican's CEO talks strategy

UNITED STATES: Having joined the company as an intern, MidAmerican CEO Adam Wright combines in-depth experience of the business with the competitiveness of a former professional NFL player as the utility works to deliver on its 100% renewable energy promise.

‘Nothing in life is free’… Adam Wright in conversation with Tom Kiernan at AWEA’s Windpower 2018 conference (pic: AWEA)
‘Nothing in life is free’… Adam Wright in conversation with Tom Kiernan at AWEA’s Windpower 2018 conference (pic: AWEA)

American-football running backs are prized for two particular qualities: their vision to see a gap in the defensive line, along with their speed and power to exploit it. Those are the qualities that Adam Wright, chief executive and president of MidAmerican Energy — and a former professional football player with the New York Giants — says will benefit his company as it competes in the energy sector.

MidAmerican builds to own wind farms long-term, although it sometimes uses independent developers such as Invenergy or EDF Renewable Energy. As Wright put it in a Q&A session at the American Wind Energy Association’s Windpower 2018 conference in May, when asked about competition with the growing number of non-energy companies seeking to buy or own renewable energy, such as Microsoft: "We just think we do it best."

He added: "Muhammad Ali was not Muhammad Ali without Joe Frazier… You’ve got to have that kind of competitive environment. It makes you think, it makes you innovate, it makes you push, it makes you challenge. It creates these gaps that you can identify.’"

With more than 4.4GW online in Iowa at the end of 2017, MidAmerican owns and operates more wind-powered generation capacity than any other US rate-regulated utility. Based in Des Moines, it serves 770,000 electric customers and 751,000 natural gas customers in Iowa, Illinois, Nebraska and South Dakota.

MidAmerican is on track to become the first investor-owned utility in the US to service 100% of its customer needs in a single state with renewable energy, the company announced on 30 May. And most of that renewable energy, delivered to MidAmerican’s customers in Iowa, will be generated by wind power.  

The 100% renewables benchmark will be met — even exceeded — when the company’s $922-million 591MW Wind XII project is completed in late 2020 or 2021. It is subject to approval by the Iowa Utilities Board.

MidAmerican installed its first wind turbine in 2004 and now operates more than 2,100 units at 27 wind farms across Iowa, an investment of $12.3 billion. The company’s $3.6-billion 2GW Wind XI cluster, Iowa’s largest-ever economic development project, is currently under way. The first two Wind XI projects, Beaver Creek and Prairie, are already operational, with another five wind farms under construction: Beaver Creek II, North English, Arbor Hill, Orient and Ivester. Completion of the Wind XI cluster is expected in December 2019. In June, MidAmerican, a subsidiary of Warren Buffet’s Berkshire Hathaway Energy Co, passed the 50% mark for using renewable generation in the retail electric load provided, according to the Iowa Utilities Board.

Work ethic

The 40-year-old Wright has a remarkable story. He was raised by a single mother in Omaha, Nebraska, in an area that he has said was "plenty rough enough". His father died when he was eight, and his mother went back to college and trained to become a nurse.

Her work ethic has stuck with him. "Nothing in life is free," he says. "Nothing comes easy. If you want it, you have to work for it," he told Tom Kiernan, CEO of AWEA, during the Windpower 2018 Q&A. Indeed, Wright’s first job was selling coffee in a local bingo hall at the age of ten.

Wright played football avidly, and also became an intern at age 18 at MidAmerican, a role he kept for seven years, even while studying civil engineering at the University of Nebraska. "I majored in engineering only because it was going to be tough. I didn’t want to play college football and coast through college," he told Windpower Monthly. He was on the books of the New York Giants for two seasons from 2001, but was sidelined for much of the time with a torn ligament.

"I learned discipline and how to prepare, as well the importance of being in good condition mentally and physically," he says of being a professional athlete. "Attention to detail matters a lot even if your outcome was unsuccessful."

He returned to the energy business and, in 2003, joined Northern Natural Gas (NNG), another Berkshire Hathaway Energy company, which owns the largest interstate natural gas pipeline system in the US.

"Energy gets me excited because it’s an essential service for society. We get to impact people’s lives in a very significant way every single day," he says. At NNG, in various management roles, he says he learned about operations and the importance of people in a company’s success. In 2012, he moved to Des Moines to lead the expansion of MidAmerican Energy’s wind-generation fleet, but in 2015 returned to gas, assuming responsibility for the utility’s gas-delivery operations. In January 2018, he was promoted to his current role.

Asked why MidAmerican is pursuing wind power, Wright says: "Our customers want wind energy — they demand it, We’re moving toward a society where we want things to be sustainable, renewable…" Iowa’s weather does not lend itself to large-scale solar, so wind remains key to the state’s renewables generation.

Asked about the most surprising thing he has learned about wind power, he says: "How rapidly the technology is improving and the efficiency is increasing, while the cost continues to decrease. It really is a competitive source." In a interview with Reuters earlier this year he said: "We haven’t had to raise customers’ rates and that’s a big part of the way we evaluate these [wind] projects. We’re not building wind for the sake of building wind."

MidAmerican began investing in wind some 15 years ago as a hedge against volatile fuel prices, taking advantage of the production tax credit (PTC) that has helped keep wind-power prices low. "The revenue streams from the wind farms with PTC are typically sufficient to offset the levelised costs over the life of the asset and result in a levelised benefit to customers. There is no other form of generation from which we’ve been able to achieve this result," he says.

Iowa’s landmark renewable portfolio standard has helped. The state was one of the first in the country to introduce one, as early as 1983. As of the end of 2017, as much as 36.9% of the state’s electricity generation came from wind, more than in any other state.

Greenwash?

MidAmerican also deals in coal and natural gas. "To help us deliver reliable energy, we see an ongoing need to maintain other generation assets, including coal and natural gas plants," he says. The coal will be phased down even more once storage becomes economic, which he says will happen but is not yet the case.

Still, environmental groups have slammed the utility for portraying itself as a renewable-energy leader while still relying on coal as baseload power. The Iowa Environmental Council and the Environmental Law & Policy Centre say that MidAmerican still gets 30% of its electricity from coal, and is among the top 20 utilities for the size of its coal fleet, which is about the same size as its wind fleet.

"The 100% renewable energy vision is a bit of a gimmick," Josh Mandelbaum, a senior attorney at the Iowa office of the Environmental Law & Policy Centre, told the Des Moines Register in August. "It’s pretty misleading if MidAmerican is giving customers the impression that’s all they have to do."

Be that as it may, Wright says MidAmerican will stick with the strategy of owning and operating wind farms, building as much as it can before the PTC is phased out, with the last projects completed by 2021.

After 2021, Wright predicts a dip in MidAmerican’s wind development "so that the market can catch up with us… I think the industry’s going to figure it out, but there will be a ramp down."

Asked by Kiernan what advice he would give the wind industry, Wright said: "Figure it out. We are truly limited only by our imagination. We can do whatever we put our mind to." He then used the example of energy storage to illustrate his advice: "Let’s fall in love with the vision of energy storage. It’ll shake out. We’ll figure it out."

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