Xcel Energy’s last-minute proposal for a $30 million electric vehicle rebate program was slashed to $5 million and limited to low-income auto buyers by the Colorado Public Utilities Commission on Wednesday.
“This is a pilot, we just want to learn” what works, PUC Chairman Jeff Ackermann said. The commission made its decision in a Google Meet session.
Xcel Energy, Colorado’s largest electricity provider, in May filed a $100 million, three-year program to develop EV charging stations. Then in September, after hearings and testimony had been filed in the case, the utility proposed adding the $30 million rebate program.
MORE: It will take $130M to get more EVs on Colorado roads. Xcel wants its customers to cover the cost.
Legislation passed in 2019 enables utilities to develop charging infrastructure and include the costs in rates paid by customers. The aim of the bill was to help promote EVs as a way of reducing greenhouse gas emissions. Transportation is the largest source of greenhouse gases in Colorado.
The PUC approved the more than $100 million transportation electrification plan Wednesday that aims to add 20,000 residential, commercial and fast-charging stations in the next three years.
The decision was hailed by environmental groups and state officials.
“Today’s decision by the Public Utilities Commission propels us towards a clean energy future and reaffirms Colorado’s critical role as a national climate leader,” Jenny Gaeng, a transportation advocate with Conservation Colorado, said in a statement.
Will Toor, the executive director of the Colorado Energy Office, said in a statement that “the decision clearly keeps Colorado moving forward toward vehicle electrification by providing important investment in EV infrastructure.”
While the PUC supported most of the elements in Xcel’s plan, the proposed rebate program drew some fire.
Xcel had placed no limits on income or the price of vehicles that could be purchased under the rebate program. All three commissioners rejected that provision on Wednesday.
“We are asking ratepayers to help rich people to buy expensive cars,” Commissioner John Gavin said. “This totally fails the just-and-reasonable sniff test.”
Ackermann and Commissioner Megan Gilman crafted an alternative that would make rebates available only to income-qualified buyers, capping the program at $5 million.
“This is a targeted program to enable income-qualified people to enter the market,” Gilman said.
The program would provide rebates of up to $5,500 for new EVs and $3,000 for used vehicles. The rebates would be “equity-focused, income-focused,” Ackermann said.
The challenge with a rebate, Ackermann said, is finding the “sweet spot to get consumers to do what you want them to do.”
Gavin argued that the cost of EVs still is outside the “access point” for low-income buyers. The “perverse impact” of the program, he said, could be to incentivize low-income buyers to purchase cars they can’t afford.
The money could be better spent on “societal programs, like school bus electrification,” Gavin said.
The income-qualified rebate program passed on a 2 to 1 vote.
“While the Colorado Public Utilities Commission did not adopt our EV rebate program in whole, we recognize and commend their focus on equity and look forward to implementing a targeted pilot program supporting income qualified customers,” Xcel said in a written statement. “We’re pleased with the commission’s deliberations at the hearing. We’re excited to move forward and implement a transportation electrification plan that will drive forward Colorado’s electric vehicle transition and help the state achieve its climate goals.”
The rebate program was first proposed by the Colorado Energy Office, but in discovery motions the PUC staff uncovered emails showing that the plan has been developed with undisclosed input from Xcel Energy.
“I don’t think it was inappropriate, but it wasn’t transparent,” Gene Camp, a PUC staff deputy director, said in commission testimony. “It is not unusual for parties to collaborate in the background. … If this was a collaborative proposal it would have been helpful for (the Colorado Energy Office) to state it.”
UPDATED: This story was updated Dec. 23, 2020, at 8:09 p.m. to add information about how the PUC voted on additional elements of Xcel Energy’s transportation electrification plan.