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Xcel Energy wants to offer rebates on electric vehicles to get more of them on Colorado roads

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A plan by Xcel Ener­gy-Col­orado to offer car rebates to increase the num­ber of elec­tric vehi­cles in the state is get­ting praise from those who want gas-guz­zling cars off the roads and crit­i­cism from those con­cerned about the impact on the utility’s ratepay­ers.

The rebates would raise to $130 mil­lion from $102 mil­lion the amount of mon­ey Xcel Ener­gy pro­pos­es to spend over three years on its plan to build charg­ing sta­tions for elec­tric vehi­cles. A 2019 law cleared the way for Xcel Ener­gy and oth­er reg­u­lat­ed util­i­ties to invest in equip­ment and pro­grams to boost the use of elec­tric vehi­cles, one of Gov. Jared Polis’ major goals.

The law also allows Xcel Ener­gy and oth­er investor-owned util­i­ties to recov­er the costs of build­ing the charg­ing sta­tions from its cus­tomers. The com­pa­ny has pro­posed an addi­tion­al charge on cus­tomers’ month­ly bills, a “rid­er,” to do that.

The Col­orado Pub­lic Util­i­ties Com­mis­sion is hold­ing hear­ings on Xcel Energy’s plan, which sup­port­ers say would be a giant step toward cut­ting cli­mate-chang­ing green­house gas emis­sions and air pol­lu­tion. How­ev­er, there’s con­cern that offer­ing rebates for elec­tric vehi­cles is beyond the scope of what was envi­sioned and will dri­ve up cus­tomers’ elec­tric bills.

State Sens. Chris Hansen and Kevin Pri­o­la, spon­sors of the elec­tric-vehi­cle leg­is­la­tion, said in a let­ter this week to the PUC that the bill was designed to “min­i­mize over­all costs and max­i­mize over­all ben­e­fits.” The bill capped the impacts on retail rates based on a per­cent­age of the utility’s annu­al rev­enue require­ments.

“Both Sen. Pri­o­la and I argued (in the Sen­ate) about how this would be ben­e­fi­cial to cus­tomers, how this would be good for ratepay­ers,” said Hansen, a Demo­c­rat from Den­ver. “The fixed cost of the sys­tem gets spread out over more elec­tric sales and that dri­ves down costs for every­body.”

Hansen said he would be com­fort­able with some kind of rebate to encour­age peo­ple to buy elec­tric cars if it’s geared toward peo­ple who need it.

The Col­orado Office of Con­sumer Coun­sel, which rep­re­sents the pub­lic before the PUC, gen­er­al­ly sup­ports Xcel Energy’s plan but is con­cerned about what cus­tomers will end up pay­ing, said Cindy Schon­haut, the direc­tor.  The rebate pro­gram was pro­posed just before the PUC hear­ings began and there’s no data in the hear­ing record about the effect on rates, she said.

The aver­age res­i­den­tial cus­tomer would pay 67 cents more per month if the plan is approved, Xcel Ener­gy spokes­woman Michelle Aguayo said in an email.

Xcel Ener­gy said it will ear­mark a por­tion of its bud­get for low-income vehi­cle buy­ers and charg­ing sta­tions and oth­er equip­ment for low­er-income com­mu­ni­ties and mul­ti-fam­i­ly res­i­dences.

Green Lati­nos, which advo­cates for the Lati­no com­mu­ni­ty on envi­ron­men­tal issues, sup­ports expand­ing the rebate pro­gram, Ean Tafoya, the Col­orado field advo­cate, said in a state­ment. Xcel Ener­gy should expand the income qual­i­fi­ca­tions and add geo­graph­ic qual­i­fi­ca­tions “to ensure that those who have been harmed by our his­to­ry of pol­lut­ing fos­sil fuels and envi­ron­men­tal racism can par­tic­i­pate in Colorado’s clean trans­porta­tion future.”

The Col­orado Ener­gy Office sug­gest­ed rebates to make it eas­i­er for peo­ple to buy elec­tric vehi­cles and help the state meet its goals to reduce emis­sions and elec­tri­fy trans­porta­tion, said Kei­th Hay, the agency’s pol­i­cy direc­tor. He not­ed the rebates would apply to leas­es and used cars and well as new cars.

In 2019, the leg­is­la­ture extend­ed state tax cred­its for elec­tric vehi­cles through 2025. Gene Camp of the PUC staff tes­ti­fied that it could cost util­i­ty cus­tomers 42% more to pay for rebates than what it would cost tax­pay­ers to finance state tax cred­its because of the mon­ey and inter­est that Xcel Ener­gy is allowed to recov­er.

The PUC staff also argued that the 2019 law didn’t autho­rize util­i­ties to offer incen­tives for buy­ing elec­tric cars.

Hay said the ener­gy office dis­agrees. He said the law refers to util­i­ties sup­port­ing wide­spread use of elec­tric vehi­cles through edu­ca­tion, out­reach and incen­tives that, among oth­er things, “encour­age greater adop­tion of elec­tric vehi­cles.”

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