Organization: MGE Energy Inc.

Year: 2017

Description: RESOLVED:  Shareholders request that MGE Energy lead a multi-party study of the electrification of the transportation sector in the MGEE service area.  The study implementation plan, omitting proprietary information and prepared at a reasonable cost, should be completed and reported to shareholders by December 2017. The study implementation plan should include the Company’s strategy to supply renewable energy to the electrified transportation sector, including analysis of long and short-term impacts on carbon reduction, utilization of new company owned renewable energy, financial and operational opportunities, and risks to the company.
 
SUPPORTING STATEMENT:
The utility industry is changing rapidly and MGE should be in a leadership position to aggressively seek new business targets that take advantage of emerging opportunities in the electrical sector.  Conventional industrial, commercial, and residential electrical load is remaining flat or decreasing due to new technologies, codes and standards, and consumer price signals to use less. However, electrification of the transportation sector represents an opportunity to supply new renewable energy in the MGE territory in the years ahead.   At the present time there is no road map or coordinated strategy by the company to assess and move forward on this potential market opportunity.
 
Currently, there is constant pressure to reduce carbon from the transportation sector to address climate change. This need will only intensify as the world continues to warm. According to EPRI’s “Environmental Assessment of a Full Electric Transportation Portfolio” report, electricity will eventually replace approximately half of projected light and medium-duty transportation-fuel use and a significant portion of non-road–fuel use. Electrifying vehicles and non-road equipment will lead to better air quality. The study found that greenhouse gas reduction ranged from 45% to 77% when the load was supplied with renewable energy.
 
The “Deep Decarbonization Policy Program - US 2050 Vol. 2 “report, also supports electrification of the transportation sector where possible.
 
Investors require additional information on how the company is preparing for potential scenarios in which the electrification of the transportation sector is greatly increased due to climate impacts and other market drivers. The information provided in the proposed study implementation plan will allow shareholders to determine whether the company is adequately managing or seizing related opportunities.
 
An electrification of the transportation sector initiative should be launched and led by MGE, which evaluates the potential for this new electrical  load with renewable energy, and which produces an adequate analysis prepared for investors to assess the company’s strategy. The initiative could include recruiting local organizations and experts in this field to determine the local technical, economic, environmental, and market impacts of electrifying the transportation sector, including replacing buses and trucks, vehicles (both fleets and passenger), light rail, and additional charging stations.
 
The proposed study implementation plan will lead to a better understanding of the potential and timing of increasing electrical load in the transportation sector as well as the impact of providing this increased load from renewable energy sources.