This Friday, Xcel Energy, the largest energy utility in Colorado, will release its Transportation Electrification Plan. This is a big deal.
We know climate change can dramatically alter the Coloradan way of life forever. Fortunately, a new medium for reducing greenhouse gas emissions has emerged: the electric vehicle (EV), which is a lot cleaner than gas-powered vehicles.
Unfortunately, Colorado lacks the electric charging infrastructure and support to help everyone, from individual EV drivers to local governments to businesses, make it easy to transition from gas-powered vehicles to electric-powered.
Last year, the Colorado state legislature passed a bill, SB19-077, that requires Xcel Energy to submit a Transportation Electrification Plan (TEP) detailing how they will support EVs.
I don’t yet know what will be in it, but I’ve got some recommendations I sent Xcel for how they can speed up widespread electric vehicle adoption, helping the environment and saving people money on their utility bills. Here’s what CoPIRG is recommending:
Data collection and reporting: We recognize the role utilities play in transportation electrification is still quite new. That’s why it is critical that utilities track and report a set of data so we can all see what is working and what is not. We think “working” means a few things including the infrastructure that is built is highly utilized, people are charging and using EV infrastructure at times when energy is the cheapest to produce, we speed up the transition from gas-powered transportation to electric-powered transportation, and the anticipated excess revenue from electric vehicles is identified and used to either build out more EV services or reduce energy bills for all customers. Collecting and reporting the data that helps us determine these things will be critical.
Manage growth by focusing on off-peak charging: One of the utility’s top priorities should be ensuring any EV charging happens off-peak – the time when energy is cheapest to purchase because it is not the peak usage time across the grid. This is where the biggest benefits will be realized for individual EV users and for ratepayers across a utility’s territory. All investments should work from a position that on-peak charging should occur as little as possible and utilities should disincentivize on-peak charging. Electric vehicle adoption should not require the construction of new peak power generation.
- Invest in education: Education is critically important, and the Denver EV Action Plan ranks education as a top priority. According to MJ Bradley & Associates’ EV education policy toolkit, “consumer distrust and misconception about the relatively new technology behind EVs is a major barrier to widespread EV adoption.” Pairing infrastructure investments with a robust education program so that people know their options will not only help ensure charging infrastructure is more fully utilized but will also help encourage people to transition to EVs. Education is also important to ensure the benefits of electrification are maximized, including ensuring charging happens at off-peak hours. We recommend utilities coordinate their education and outreach with state and local governments because it can have the biggest impact if everyone is communicating similar messages.
- Ensure education leads to benefits: Because transportation electrification is a new space for most utilities, best practices for education programs have not been fully developed. Utilities should connect specific education programs with intended outcomes and goals so we can all more quickly determine which education programs and messages are most effective.
Be creative with on-street and public charging: 32% of Coloradans are renters and only 56% of vehicles in the United States have a dedicated off-street parking space, like a driveway or garage. It will therefore take creativity to determine where charging infrastructure should go. London installed charging infrastructure in street lamps, which provided on-street charging options for people who live in the area. Utilities should also identify ways to partner with schools or other day-time businesses to put charging in neighborhoods that can be accessed by residents without off-street parking.
Think outside the box on car ownership: One of the best opportunities to ensure these investments benefit everyone, even those who will struggle to afford to own and operate an electric-vehicle, is to invest in EV-powered transportation options that make car ownership unnecessary. For example, utilities can partner to support local electric-powered car share programs or build an EV charging hub in a neighborhood and invest in a bunch of electric-powered scooters or e-bikes that the community can access. This electric-powered mobility hub can help ensure the benefits of electric-powered transportation are shared by a lot more mobility users. One specific example – partner with the City of Denver, which has an RFP out to determine a new micromobility provider. Utility investments could ensure that the micromobility provider has the resources to roll out the e-scooters and e-bikes to the whole city.
Support the conversion of fleets: A lot of local government, transit, and commercial vehicles drive more miles than passenger vehicles. Electrifying a single fleet vehicle could therefore have more of an impact on reducing greenhouse gas emissions and other pollutants than a single vehicle used by an average Coloradan. While it might feel like converting commercial fleets will not provide benefits to Xcel ratepayers, we know that the excess revenue from these fleets can help put downward pressure on the overall utility grid costs for ratepayers. Helping businesses and local governments overcome the initial upfront costs of electrification can help them realize immediate fuel and maintenance savings, which also provides benefits to a utility’s customers, especially if they pay local taxes or ride the local transit.
Work with dealerships: A Sierra Club report found that outside of California, only 34% of dealerships had electric vehicles on their lots that were sufficiently charged and could be driven off the lot, reducing the likelihood they would be available for a test drive or that car dealers would be trying to sell them. Utilities can work with car dealers in their territories to ensure that they have the infrastructure necessary to support electric vehicles and could break down a barrier to EV adoption on the front end of car purchasing.
Use excess revenue to help lower customer utility bills: One of the big benefits of electrifying our transportation system is that money that used to pay to fuel gas-powered vehicles will now be used to fuel electric-powered vehicles, pumping millions of new dollars into the utility grid. Thus, when a utility makes investments to help individuals convert to an electric-powered vehicle, the benefits of that switch are felt by more than the electric vehicle owner. A study by Snyapse Energy showed that every dollar invested in electric vehicles yields $2-3 in benefits for the system, and Xcel Energy Electric Vehicle Cost-Benefit Analysis by MJ Bradley & Associates shows that supporting 1 million electric vehicles in your territory will have between $8-20 million in net revenue in 2030. It’s important that utilities put systems in place that allow for all their customers to benefit from this net revenue in the form of lower utility bills.
Performance-based incentives: Sometimes performance-based incentives (PBI) can be incorrectly used to reward a utility for doing what they were already supposed to do and what they already have a market incentive to do. We think that largely describes transportation electrification. However, PBI could play a role in this TEP in a few ways. We recognize there are a few places that will be particularly difficult to meet the expectations of SB19-077. For example, ensuring access to transportation electrification investments in areas with apartment buildings or areas where owning and operating an EV is out of reach for the average residents. We also recognize that there is a public interest in moving as fast as possible in converting our transportation system from a gas-powered one to an electric-powered one and reaching state greenhouse gas emission reduction goals as quickly as possible. Finally, we know the costs to consumers and the benefits of electrification will be maximized by maximizing the percent of people who charge off-peak. In each of these scenarios, meeting a base expectation should not merit a PBI but achieving something above and beyond the normal, might. For example, helping the state meet the “High EV Growth projection” from Xcel Energy Electric Vehicle Cost-Benefit Analysis by MJ Bradley & Associates or by hitting an off-peak charging rate for EV users that rival some of the best rates we’ve seen for other utilities (80% or higher) or by exceeding industry standards in providing electric vehicle benefits to hard- to- reach communities.
Converting from a gas-powered transportation system to an electric-powered transportation system is a critical strategy to tackle climate change. But it’s also a great way to reduce the cost of transportation and a strategy to reduce overall bills across an electric grid.
I’m excited to see what Xcel Enegry is proposing and will be working to push them to go big because they are poised, more than any other entity, to help tip the scales to a zero emission transportation system by taking bold action this year.