Colorado PUC approves Xcel Energy’s transportation electrification plan
Colorado’s Public Utility Commission (PUC), in a recent 90-page decision, largely approved a $110 million transportation electrification plan (TEP) for Xcel Energy, which when built out is expected to help support 940,000 electric vehicles (EVs) in Colorado by 2030.
That’s an important number because Colorado’s EV Plan 2020 calculates that the state “could see significant environmental benefits that include emission reductions” when EVs get to the 940,000 level. Colorado currently has an estimated 22,577 battery electric vehicles, according to a dashboard maintained by the Colorado Energy Office.
Xcel’s plan covers many fronts. It addresses infrastructure issues, particularly the need for vehicle charging stations, and it also covers social/equity issues. It includes, for example, a $5 million pilot rebate program to help low-income customers. Another initiative Xcel will develop is “community charging hubs,” partnerships with cities, municipalities, and community focused organizations. The hubs will provide service for ridesharing and E-bikes and E-scooters.
“Transportation is the leading source of greenhouse gas pollution in Colorado,” said Keith Hay, Director of Policy at the Colorado Energy Office. “The PUC’s decision is a down payment on transition to cleaner air and lower emissions.”
Some of the TEP highlights include:
• 940,000 EVs, by replacing internal combustion engines, could help reduce ozone forming pollutants by an estimated 800 tons of NOx, 800 tons of volatile organic compounds, and up to 3 million tons of greenhouse gas emissions.
• An analysis by M.J. Bradley & Associates found that under a high EV growth scenario, economic benefits would total $1.3 billion per year by 2050, with 80 percent of the benefits accruing to EV drivers and the rest to utility customers.
• Xcel will help develop a network of public fast chargers. In addition, the company may own stations in underserved areas where the market does not attract private investment.
• Bradley & Associates also found that state EV goals would put downward pressure on future rates, delaying or reducing future rate increases, thereby reducing customer bills by roughly $3 per month in 2030 and rising to potentially $42 per month in 2050.
The PUC is allowing Xcel to recover transportation electrification program expenses through a rider on ratepayers’ bills. The commission notes that Senate Bill 19-077 expressly authorizes this approach. SB 19-077 is the authorizing legislation in Colorado that was signed into law in 2019 requiring investor-owned utilities to file a program to support widespread transportation electrification within service territories. Similarly, on other issues, the commission makes a point of referencing alignment between the TEP and the Senate bill.
Commissioners added a number of comments regarding the new rider. They write, for example, “that a successful TEP will require the Company to make significant new investments that are not included in its current base rates.” They comment further that “rider recovery does not equate automatic cost recovery” and that “forecast and true-up filings will be subject to review.” The commission wanted to avoid the possibility that without sufficient revenue Xcel might have to scale back on its transportation electrification investments.
The PUC also wanted clarity and transparency for the new Transportation Electrification Programs rider, which is to list all new TE program expenses. Xcel did not want to add yet another rider to customers’ bills. The PUC said this set of issues will be re-examined in future proceedings.
Xcel’s proposal included a Commercial Portfolio section pertaining to fleet and workplace charging. The company estimates that each public Direct Current Fast Charger (DCFC) will cost $131,714 and presents “an equivalent levelized revenue requirement of $17,459 per year and annual operation and maintenance expenses of $3,951.”
These costs, of course, impact rates. For company-owned DCFCs, Xcel proposed a standard charging rate of $0.25 cents per kWh and a critical peak pricing (CPP) rate of $1.50 per kWh, as well as a dwell charge of $0.50 per minute for continued connection to the charger that begins accruing 10 minutes after EV charging is complete.
Intervenors challenged these rates. Tesla, for example, was concerned about competition with its own DCFC network. Electrify America said the rates “would repress or otherwise eliminate the economic viability of private development, leaving Public Service as the monopoly provider.”
In the end, the PUC denied, in part, Xcel’s rate proposals. Commissioners directed Xcel to replace the CPP rate with a time-varying rate. And they ordered the company to follow up with a new DCFC rate filing.
The TEP will be phased-in over three years, 2021, 2022 and 2023. Progress should be easy to track. Xcel is required to file an annual compliance report, due April 1. Based on the annual report, interested parties can ask the PUC to schedule a “prudency review hearing” to convey concerns about TE implementation.
