Xcel as a transportation company

Utility plans for EVs align with Colorado’s decarbonization goals, says analyst

by Allen Best

DENVER, Colo. – Xcel Energy announced Wednesday a vision to drive toward 1.5 million electric vehicles in its service areas—including a large chunk of Colorado—by 2030. The company also operates in seven other states.

In a sense, this announcement merely confirms the legislative marching orders given the utility by Colorado and several other among the eight states in which it operates. In the case of Colorado, SB 19-077 required Xcel Energy and Black Hills Energy, the two investor-owned utilities to apply to the state’s Public Utilities Commission to build facilities to support electric vehicles and recover the costs. Xcel in May submitted its plan, which is expected to be approved later this year by PUC commissioners.

The announcement should be seen in an even broader context, says Travis Madsen, transportation program manager for the Southwest Energy Efficiency Project, a major player in driving public policy in the energy sector in Colorado.

“Xcel, he said, “is evolving beyond just being an electricity company. It’s also becoming a transportation company. I am excited that the company is embracing the idea that part of what it’s doing is to enable electric vehicles.”

This is from the Aug. 14, 2020, issue of Big Pivots. Go HERE to subscribe.

Colorado legislators in 2019 adopted a raft of energy legislation, the most over-arching economy wise decarbonization goals: 26% by 2025 and, more challenging by far, 50% by 2030. Gov. Jared Polis reasserted and expanded somewhat the goal adopted by his predecessor, Gov. John Hickenlooper, to have 940,000 EVs on Colorado roads by 2030. Polis expanded the plan by including medium and heavy-duty vehicles, although Colorado does not have tax incentives for them, unlike cars.

Xcel’s ambitions and those of Colorado align very well, says Madsen. He points to an Xcel filing with the PUC of its goal of having roughly 500,000 electric vehicles in its service territory in Colorado. Xcel delivers more than 60% of the state’s electricity.

Travis Madsen

Madsen says he expects Colorado will meet and then exceed the EV goals because of the simple fact that the economics of vehicle electrification are starting to align. Vehicle costs are changing, and electricity has always been cheaper than petroleum. This was noted by Xcel in the press release posted on its website. “By 2030, an EV would cost $700 less per year to fuel than a gas-powered car, saving customers $1 billion annually.

Xcel’s goals also align with the state’s efforts to decarbonize its electricity. “This activity by Xcel is one of the key ingredients in making that happen,” he says. This vehicle electrification by 2030 will reduce emissions from transportation 40%.

There’s another component: air quality. Air pollution poses a serious health threat to people, and new studies reinforce and expand that understanding. The northern Front Range has had air pollution issues for many decades, less now than 50 years ago, but still dangerous and with a stubborn persistence. There are multiple causes, including oil-and-gas drilling, but transportation exhausts are the single largest cause.

“The more we learn about air pollution and how bad it is, the greater the push to switch,” says Madsen. “The switch to EVs is one of the major tools.”

In its May filings with the PUC, Xcel laid out a multi-pronged approach to aiding the charging of EVs in its Transportation Electrification Plan. It proposes to invest $100 million during three years in electric vehicle infrastructure and programs. See the 48-page plan filed with the PUC here.

These include programs to help people rewire their garages for charging, as most charging is expected to be done at home. The program also calls for efforts to allow those in multi-family housing, such as condominiums and apartments, to have access to charging. Another component addresses fleet-charging. And, if a relatively small part of the program, Xcel proposes how it will figure out where to put expensive fast-chargers in locations that private companies, like EVgo and ChargePoint, do not, because of infrequent use.

Madsen expects PUC approval for Xcel’s plans by early 2021 and the laying out of the programs, which will then accelerate the adoption of EVs in Colorado. The deadline for adoption of the plan was specified by legislators as March 1, 2021.

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