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Jun 28, 2023

Xcel Energy retail EV charger network plan faces opposition

Enterprise Reporter FILE PHOTO: Denver EVGo charging station with two Level 2 and one DC Fast Chargers. Xcel Energy, facing criticism in Colorado and Minnesota for proposing company owned and operated

Enterprise Reporter

FILE PHOTO: Denver EVGo charging station with two Level 2 and one DC Fast Chargers.

Xcel Energy, facing criticism in Colorado and Minnesota for proposing company owned and operated retail fast charger networks, has added a rebate option to its Colorado plan. Instead of building and owning chargers, Xcel is suggesting it give ratepayer funded rebates to private retailers who install charging stations in Colorado.

Xcel Colorado filed its second 3-year Transportation Electrification Plan May 15, asking that the Colorado Public Utilities Commission authorize billing some customers $145 million to build 460 public chargers with roughly 580 individual charging ports here.

The problem, according to EV charging industry spokespersons, is that Xcel, a regulated monopoly, shouldn’t be in the business of competing with private industry in providing vehicle chargers because it’s an unfair economic advantage for Xcel to use captive ratepayer money.

“Xcel was trying to take over Minnesota’s EV charging marketplace, which would have reduced infrastructure and service while raising prices on Minnesotans,” said Charge Ahead Partnership Executive Director Jay Smith in a release. “Thankfully, there has been enough public pushback and scrutiny from the Minnesota Public Utilities Commission that Xcel was forced to back down and withdraw this outlandish request.”

The Charge Ahead Partnership is a nationwide coalition of businesses and individuals who want to expand the nation’s EV charging marketplace.

Xcel Energy, headquartered in Minnesota, proposed building a for-profit DC fast charger (DCFC) network there in November 2021. The stated goal was to install, own, and operate 730 EV DCFCs there at a cost to ratepayers of $192 million.

After the Minnesota PUC drastically cut the company’s requested rate increase from $440 million to $306 million, Xcel withdrew its $330 million clean transportation portfolio proposal, saying it wanted to “reevaluate” its investment plans for the state.

According to a June 14 letter from the Minnesota Department of Commerce to the Minnesota PUC, Xcel acknowledged that despite Commission approval of 21 DCFC stations in April 2022, Xcel does not have any stations in operation and no sites are beyond the pre-construction stage. Xcel also disclosed that, as of March 21, 2023, it had no operational DCFC stations in Colorado or New Mexico, despite receiving approval in Colorado in December 2020 and in New Mexico in September 2021.

“This is a win for Minnesotans. Xcel’s attempt to extend their monopoly into the EV charging marketplace would have burdened all Xcel customers with higher power bills and discouraged private investment in EV charging,” Smith said.

The Charge Ahead Partnership maintains that many private businesses, including retailers, gas stations and convenience stores are eager to offer EV charging services because they already have the locations and amenities that customers desire. However, says the group, they cannot confidently invest in EV charging if they are forced to compete against a powerful state-sanctioned monopoly.

“The damage that Xcel has done to the EV charging marketplace is becoming obvious,” said Ryan McKinnon, spokesperson for the Charge Ahead Partnership, “At this point, Xcel has completed exactly zero of the 54 chargers it was authorized to build in three states since 2020.”

“At the same time, they have driven away much-needed private investment in EV charging in those states because private businesses can’t compete with a state-backed monopoly,” McKinnon added.

Michelle Aguayo, spokesperson for Xcel Colorado told The Denver Gazette in an email that the public charging network would be paid for by commercial and industrial customers, not residential customers. She also confirmed that Xcel does not have any operating chargers in Colorado at this time.

After the withdrawal of its plan in Minnesota, Xcel Colorado filed an addendum to its pending Colorado Transportation Electrification Plan presenting an option to the PUC for Xcel not to own or operate the chargers, but rather it would offer rebates to companies that choose to install them. Xcel commercial and industrial ratepayers would still be paying for the rebates.

The PUC can approve either option or neither. Hearings on the plan are anticipated in early 2024.

Under the rebate option Xcel would install and maintain the infrastructure for new, dedicated EV service. For the new service, the company installs, owns, and maintains wiring, transformer upgrades, pads, poles, new service conductors, as well as metering equipment for EV charging separate from any existing service at the site, as well as new service panels, conduit, and wiring that runs from the new meter up to the charger, said Aguayo.

Aguayo said the company still supports the original ownership and retail operation proposal but believes stakeholders and the PUC will be “interested in weighing both options in light of changing public charging market.”

“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,” said Aguayo in an email to The Denver Gazette. “The alternative would provide funding for approximately 460 public fast chargers (the same as the original plan) and would invest the same amount as the original proposal for public charging. This alternative was not in response to entities that oppose utility ownership of public charging.”

Aguayo also confirmed that Xcel’s TEP work can’t step outside of it’s customer footprint in providing services and improvements.

In testimony submitted to the Colorado PUC with the amended filing, Deborah E. Irwin, Xcel Energy’s Manager of Regulatory Policy for Wisconsin & Michigan said, “The public charging market is undergoing rapid changes in real time, and the Company believes the market is likely to look materially different in terms of market participants, technologies and equipment configurations, and availability a year from now and beyond.”

McKinnon is less concerned with a rebate program than he was the idea of directly competing with retail charging vendors.

“We don’t have a position on rebate programs in general, but by offering the rebate alternative, Xcel is tacitly admitting that they have no business ever promising to build, own and operate chargers,” said McKinnon. “They never delivered on the chargers they promised, and the only way they could justifiably keep asking for more ratepayer money for charging was to offer to give it out as rebates.”

Amy O. Cooke, Energy Policy Visiting Fellow for the State Policy Network doesn’t think Xcel Energy should be in the business of providing EV infrastructure at ratepayers' expense because it socializes the costs and privatizes benefits for a minority of drivers.

“EV charging stations and infrastructure should be beyond Xcel’s scope of work,” said Cooke in a statement to the Denver Gazette. “Unfortunately, regulatory capture in Colorado is so egregious that the PUC is likely to rubber-stamp whatever Xcel proposes,” said Cooke.

“Ratepayers should remember that lawmakers and other elected officials are to blame for skyrocketing utility bills. Xcel reacts to the regulatory environment the legislature created, and the executive branch embraced. When bills go up, and they will, save your wrath for them,” Cooke continued.

Cooke is correct in saying that Xcel is responding to legislative mandates.

The company’s Transportation Electrification Plan is the product of legislation passed by the Colorado General Assembly in 2019. Senate Bill 19-077 requires regulated electric public utilities to file an application for a program “to support widespread transportation electrification within the area covered by the utility's certificate of public convenience and necessity” every three years.

The statute does not specify what must be included in the program but lists many things that may be in it, including infrastructure and charging facilities, meaning Xcel has wide latitude in meeting statutory requirements.

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