Xcel preps new EV programs to address 'suboptimal' charging incentives in Minnesota

Dive Brief:

Xcel Energy customers face a trio of barriers to electric vehicle (EV) adoption in the utility's Minnesota service territory, including a lack of information and awareness about their potential benefits, high upfront costs for charging installations and "suboptimal incentives to charge when energy costs are lowest," the utility told state regulators in a June 1 compliance filing.
The utility, doing business as Northern States Power Co., in its annual transportation electrification plan update told the Minnesota Public Utilities Commission (PUC) that EVs "could be a beneficial resource to the grid or create significant challenges depending on when and how they charge."
There are slightly more than 9,000 EVs in Xcel's Minnesota territory, but only about 1,750 customers utilize an EV tariff when charging. The utility is in the process of expanding a residential EV pilot designed to help customers participate in off-peak rates without the upfront costs of a second service line and meter.

Dive Insight:

Xcel has several new EV programs in development in Minnesota, including a bring-your-own equipment option, the launch of fleet and public charging pilots, and a charger offering for apartment buildings to be filed no later than September.

"All of our pilots and programs, including our residential EV tariff and our residential EV pilots, are specifically designed to incentivize off-peak charging when energy costs are lowest," the company said in a statement to Utility Dive.

A residential tariff has helped address barriers to charging at optimal times, and now includes more than 700 participants. The utility also said it is seeing success with new charging options.

Xcel launched a residential EV charging service pilot in 2018, and officials say they had to close enrollment within days due to customer demand as the initial offering was capped at 100 participants. The PUC verbally approved an expansion of the pilot in May, and the full program will launch in January 2021.

This program is designed to help customers participate in off-peak rates without the upfront costs of new utility equipment by measuring electricity usage from the EV charger itself. Officials say it also provides customers the option of having the company install and pay for the upfront costs of charging equipment, with those costs later recovered through an equipment charge.

Additionally, Xcel launched an EV subscription pilot rate this year where customers pay a fixed monthly cost for unlimited off-peak charging.

"We have undertaken substantial efforts to implement programs and create customer offerings that address these barriers and encourage transportation electrification," the utility told Minnesota regulators in its June 1 filing.

So far, only minimal system upgrades have been required to accommodate EV charging for Xcel's Minnesota customers, though that could change as adoption grows. A fleet charging pilot with Metro Transit in Minneapolis required about $546,000 in upgrades and make-ready costs.

"Distribution system upgrades are an important issue in planning for EV expansion, and we're working closely throughout our service areas to ensure we can meet the needs for additional charging and any necessary infrastructure," the company told Utility Dive. "We haven't had to make significant upgrades directly related to EV charging, but we're keeping an eye what may be needed in the future."

Xcel also warned that the COVID-19 pandemic will likely slow EV adoption. The utility told regulators it anticipates a 50% downturn in EV sales in 2020, "with a consistent lower rate of growth out through 2023." Still, it continues to prepare for thousands more EVs on its system in the next decade.

"Our Minnesota electric vehicle plan is the largest and broadest utility transportation electrification program in the Midwest," Xcel said. The utility says it views EVs as an opportunity to build on its clean energy plan to reduce carbon emissions 80% by 2030.

Xcel is also working to expand EV programs in other states where it operates. In May, the utility proposed its Colorado Transportation Electrification Plan and plans to spend up to $102 million on EV programs there, including charging equipment offerings for residential, multi-unit dwellings and commercial businesses. The utility has also filed a proposal in Wisconsin and says it will soon submit a plan in New Mexico.

"We're moving forward throughout the states we serve to ensure all of our customers and communities realize the benefits of having access to and driving electric vehicles," the utility said.