Xcel Energy-Colorado proposes rebate program to build EV chargers

After getting pushback to its plan to build out electric vehicle chargers, Xcel Energy-Colorado is proposing to offer rebates to private businesses that want to build their own charging stations.

The Public Utilities Commission is considering a proposal by Xcel to spend $145 million to build, own and operate up to 460 fast public electric vehicle chargers over the next three years. In July, the company filed an alternative plan to spend $120 million from 2024-2026 for a program offering rebates to businesses and non-regulated entities to build charging stations.

Under the alternative, Xcel, Colorado’s largest electric utility, wouldn’t own or operate the chargers. The EV charging proposal is part of Xcel’s transportation electrification plan, required by state law.

Trade organizations representing convenience stores and other businesses interested in installing chargers have said utilities would have an unfair advantage in the emerging market. They said utilities can use ratepayers’ money to invest in the infrastructure and get authorization from regulators for a certain rate of return on their investments.

However, Xcel has said the 460 chargers it proposed operating are less than 10% of the more than 6,000 additional chargers needed to support the state’s goal of having 940,000 electric electric vehicles on the road by 2030. Advocates of speeding up the transition to electric vehicles to address climate change and improving air quality see the involvement of utilities as important.

Retailers have argued that utilities’ entry into the market will discourage private businesses and entrepreneurs.

Xcel Energy’s alternative that would offer rebates as incentives for others to build public chargers isn’t a response to the criticism from private businesses, Xcel spokeswoman Michelle Aguayo said.

“We are committed to supporting public fast charging for electric vehicles in Colorado, but recent developments among Tesla and many major auto manufacturers in the high-speed public charging market required we propose an alternative strategy for consideration,” Aguayo said in an email.

Since Xcel submitted its plan in May, several automobile manufacturers, including Ford and General Motors, announced they will adopt Tesla’s charging connector design, known as the North American Charging Standard. Tesla’s design has been proprietary and other car companies have used the public domain Combined Charging System standard.

But Tesla, which has the country’s largest supercharger network, recently struck deals to allow other automakers to use adapters to plug into its system. The “current uncertainty and volatility in the public charging market” and the potential for the uncertainty to continue prompted Xcel to consider all options, the company said in testimony to the PUC.

“I would question the logic of that. This is a nascent marketplace that’s growing and evolving every day. It’s not like it was all stable and super settled back in May when they filed this and everything changed by July,” said Ryan McKinnon, spokesman for the Charge Ahead Partnership, a national coalition that includes retailers who want to build EV charging stations.

McKinnon believes feedback from businesses, the public and state agencies in Minnesota, where Xcel is based, and other states spurred the company to propose the alternative.

‘While we don’t have a position on rebate programs in general, what Xcel is proposing at least recognizes that utility ownership of EV chargers is a failed model that will not grow the EV charging network that Colorado needs,” McKinnon said.

McKinnon noted that Xcel Energy took heat over its EV charging plan from state agencies in Minnesota in June.

The Minnesota Department of Commerce told the state utilities commission that Xcel “has not shown that it can build, operate, and maintain even the limited number” of the fast-charging stations it has been approved to build.”

The Star Tribune in Minneapolis reported that Xcel withdrew its clean transportation plan after getting a lower rate increase than it sought from Minnesota regulators. The company said it will resubmit its proposal.

AARP Colorado opposes Xcel adding the expense of building EV chargers to the rate base, the basic electric rate that customers pay.

Residential customers’ monthly basic rates wouldn’t rise to pay for building EV chargers or the rebate program, Aguayo said. But a fee that recovers the utility’s costs of electrification would raise the average residential electric bill by 77 cents a month.

Basic rates for commercial and industrial customers would go up an average of $15 a month, according to Xcel, to help cover costs.

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