Xcel moves ahead with EV charging network
The long and windswept roads traversing the northern Plains may not be the most comfortable place to be in an electric vehicle (EV) this winter, but Minnesota’s utilities are taking a lead role in laying the foundation for a statewide charging network that will help convince motorists they will be able to top off their batteries when needed en route to sometimes far-off points.
Xcel Energy will appear before the Minnesota Public Utilities Commission (MPUC) this spring to seek approval of a plan announced in August that will bring 750 new high-speed charging stations featuring around 1,500 individual charging ports to Minnesota and parts of neighboring Wisconsin by 2026.
The MPUC has already publicly supported a rapid expansion of Minnesota’s charging infrastructure but will next have to decide how much of the cost will be shouldered by Xcel’s ratepayers. On a separate front, they will also address likely questions about how large a share of the charging market Xcel and other utilities should hold, especially since they are getting a head-start over the private sector.
Xcel says it will work with communities and property owners to determine the exact locations of the new stations, but they will be located in both rural and urban areas and will potentially set an example for those wide-open spaces of the country that make EV range anxiety perfectly reasonable.
The idea of Xcel establishing a string of charging stations has drawn some criticism for being outside the role of a regulated utility company, but a senior company official told Daily Energy Insider there was no time like the present to begin the groundwork for what will eventually be an enormous change in transportation.
“Transportation is the leading source of emissions in the upper Midwest,” said Nadia El Mallakh, Xcel Vice President of Clean Transportation and Strategic Partnerships. “When we look at Minnesota’s policy, their North Star is the number of EVs in the state,” she added. “By 2030 they want to see one-of-five cars in the state be an electric vehicle.”
“That’s not that far away when you think about any type of infrastructure,” Mallakh added. “It takes a long time to plan and execute.”
Minnesota is a shining example of a state where motorists may be leery of placing their trust in an EV when charging stations can be few and far between.
Nevertheless, Gov. Tim Walz has placed Minnesota on a path that will increase the EV fleet to 20 percent by the end of the decade and slash transportation emissions by 80 percent by 2040. The Walz administration’s plan aims for the state to be carbon neutral by 2050. In particular, the climate plan also calls for 20 percent of Minnesota’s cars and other light-duty vehicles to be electric by 2030. The state legislature last week approved the proposal, which also includes a $2,000 individual tax credit for EVs; it squeaked through the Senate on a 33-34 party-line vote and was sent to Walz’s office where it was expected to be quickly signed.
Kellen Schefter, Senior Director of Electric Transportation at the Edison Electric Institute, said a “robust network of public charging stations” was vital to the success of the development of the EV market, and that Xcel and other utilities were the logical choice to participate in the expansion of EVs.
“They know how to build and maintain infrastructure; they are regulated by a public utilities commission, and they have an obligation to serve their customers,” Schefter told Daily Energy Insider in an email.
The MPUC is thinking along the same lines. The commission has officially stated on its website that Minnesota utilities “have an important role” in the expansion of electrification of the transportation sector through consumer education about the benefits of EV motoring and “through appropriate rate designs, policies, and investments.”
Mallakh said that rates were a “top barrier” but noted that EV charging stations were not a place for corner cutting and needed to be exquisitely reliable, meaning not only a prime high-traffic location but also having a high level of grid reliability and regular maintenance for charging stations. “One of our core businesses is reliability,” she said. “We need to help folks feel comfortable that if they use an EV, there will be sufficient workable charging available.”
Utilities pursuing their own comprehensive EV charging projects is seen as more efficient and fairer to the public than waiting for outside companies to step into the market with their own priorities and capabilities. Philip Jones, Executive Director of the Alliance for Transportation Electrification (ATE) noted in a recent blog that EV infrastructure is still in its early stages – very early in some states – and the $7.5 billion influx of state and federal incentive programs included in the latest federal infrastructure package amounted to a “mere down-payment towards our overall national and state EV infrastructure needs.”
Utilities are already in the electricity business, however, and their ability to plan and finance the upfront costs of new charging, plus their relationship with regulatory agencies, will lead to a more orderly approach than leaving the field to the unregulated private sector. “Done properly,” Jones wrote, “these utility strategies will optimize grid utilization, benefitting everyone, and offering real potential to lower rates over time since a utility’s revenues will rise apace with EV loads, creating headroom for the utility to spread or return those revenues back to customers, or to target special needs and underserved areas that need more attention.”
The ATE noted that:
- Utilities have the size and scale to execute a major expansion and integrate new charging systems into the power grid;
- Utilities can also design rates specific to EV charging, time-of-use, and accommodate load shifting when necessary;
- Regulated utilities are also obligated to provide service to all customers regardless of location and income rather than focusing only on upscale communities; lower-income neighborhoods might not need much capacity presently but that could change over time as more EVs come onto the used-car market.
Most U.S. utilities have taken an active role in developing charging infrastructure, but the strategy is not without its critics, including in Minnesota, who question the fairness of a public utility company forcing its ratepayers to finance a revenue-generating string of charging stations in their territory. An association called Charge Ahead Partnership promotes an alternative strategy in which the private sector, particularly operators of existing gas stations and truck stops, would be the logical choice to establish charging stations.
“When Americans drive gas-powered cars there is little concern about finding gas stations to refill when traveling or running errands,” the association said. “It is a different story for EV drivers. Charging networks can and should mirror existing fuel networks, a reality made difficult by barriers to private investment.”
Both Schefter and Xcel’s Mallakh discounted concerns that station operators and other private-sector players were being elbowed out of the EV charging business altogether or would be undercut on electricity prices. Xcel, in fact, estimated its 750 new stations would only give it 18 percent of the charging capacity needed to accommodate the governor’s 2030 EV adoption target.
“That means the electric company cannot do it alone, but targeted investments will spur further EV adoption that will grow the charging market for all participants,” Schefter said, adding, “There is more than enough room in the market for all parties.”
The catch, Schefter explained, is that parties from the private sector have not yet jumped into the charging market to the extent needed to accommodate the anticipated growth of the state’s EV fleet.
Mallakh said Xcel was more specific in describing its rate strategy, which she assured was “kind of a misnomer that something hinky is going on.”
“The charging we are proposing is supported by our customers,” Mallakh said, “and we are looking at creating rates that send the right signals.”
