Xcel announces plan for thirtyfold increase in EVs

Source: By Jeffrey Tomich, E&E News reporter • Posted: Thursday, August 13, 2020

Already deep into a plan to overhaul its eight-state electricity system, Xcel Energy Inc. is gearing up to take on transportation.

The Minneapolis-based company yesterday announced its goal to help electrify 1 in 5 vehicles across its service area by the end of the decade. That represents a thirtyfold increase in the number of electric vehicles on the road today.

CEO Ben Fowke told E&E News the plan would benefit EV owners in Xcel’s territory, who would collectively save $1 billion in fuel costs by 2030. It would also reduce carbon emissions by 5 million tons a year and contribute to cleaner air in cities like Minneapolis and Denver, he said in an interview yesterday.

“The economic benefits are pretty compelling, and the environmental benefits are equally compelling,” Fowke said.

The vision for accelerating EV adoption across its service area resembles Xcel’s “steel-for-fuel” strategy for replacing aging fossil-fueled generating plants that burn coal and natural gas with new investments in renewable energy.

That generation strategy underpins Xcel’s plan to reach 100% carbon-free energy by midcentury and achieve an 80% reduction in emissions by 2030. The transition to cleaner energy can assist efforts to cut tailpipe pollution, Fowke said.

But unlike overhauling its fleet of power plants, the company has little influence over consumers’ car-buying preferences and will need help from policymakers, manufacturers and others to follow through with its EV road map.

“With steel-for-fuel, we were in the driver’s seat,” Fowke said. “We’re not making these electric vehicles. We’re trying to facilitate the use of electric vehicles, so partnerships are extremely important.”

That means Xcel must work closely with state and local governments, automakers, car dealers, charging equipment makers, and many other parties to address barriers to EV adoption, he said.

“We like to think that we can be the accelerant to get all these folks working together,” Fowke said.

One way the company said it’s already encouraging EV adoption is to make it easier for consumers to go electric through increased availability of charging stations and utility programs that can save them money.

Customers today can charge EVs for the equivalent of $1 a gallon of gasoline, according to Xcel. In the Midwest, especially, those costs can be lower during overnight hours when electricity prices dip thanks to a growing wind fleet in the region.

Xcel has so far proposed $300 million of investments in Minnesota, Colorado and other states it serves to boost transportation electrification.

Collectively, Xcel’s plans aim to reach every segment of transportation.

The company is working with transit agencies in Denver, the Twin Cities and rural Wisconsin to help accelerate adoption of electric buses. And it’s working with business customers that want to electrify commercial fleets, including its own.

For residential customers, the utility wants to make it easier and cheaper to charge at home and address range anxiety by increasing access to public fast chargers (Energywire, Oct. 9, 2019).

Among the customer programs Xcel has already rolled out in its home state is a residential charging subscription pilot that lets customers charge EVs at night or during weekends for a flat monthly fee of $40.

The so-called Netflix model to encourage residential off-peak charging is one of the ways Xcel can make it simple for customers to go electric and save money, according to Fowke.

“That’s a pretty compelling proposition,” he said. “People don’t necessarily want to figure out what a kilowatt-hour of electricity costs versus what a gallon of gasoline costs and what that Btu conversion is.”

Fowke said another pillar of Xcel’s strategy is making the transition to electric transportation work for everyone, and not just those who can afford to buy an EV.

Whether it’s helping transit agencies electrify city bus fleets or a partnership with an all-electric, ride-sharing service in the Twin Cities, all of Xcel’s customers should be able to reap the economic and environmental benefits, he said.

“We need to make sure that our programs work for all customers — not just those who can afford an EV, but those that perhaps ride a bus or take an Uber or ride an electric bike,” he said.