Xcel Energy’s ambitious and expensive plan to develop the infrastructure to serve electric vehicles was cut by 40% to $264 million by state utility regulators who said the proposal failed to demonstrate that it “minimized overall costs and maximized overall benefits.”
The Colorado Public Utilities Commission, in its April 10 decision, also said that the utility’s transportation electrification plan, or TEP, did not define “with any precision to what extent the TEP will specifically lead to greater EV adoption.”
To help meet Colorado’s goal of getting 940,000 EVs on the road by 2030, regulated utilities in the state were required to develop plans to build out charging infrastructure and promote the purchase of the vehicles.
Xcel Energy’s first plan, filed in 2020, was for $108 million. This second plan filed in 2023 was for $440 million and was supported in a settlement agreement by the state energy office, a dozen environmental groups and businesses.
“We are disappointed the settlement agreement was not holistically approved. This agreement was reached with a large and diverse set of interests,” Xcel Energy said in a statement.
Despite the cuts, the plan is too generous, according to Cindy Schonhaut, the director of the Colorado Office of Utility Consumer Advocate. “They always ask for more than they get,” she said.
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“Our analysis showed you didn’t need significantly more money to achieve the goals,” Schonhaut said.
Colorado-regulated utilities are required, under 2019 legislation, to submit a plan to the PUC to promote electric vehicles through the development of EV charging ports and infrastructure. The utilities can recover the cost through customer charges.
“The state legislature has made clear its vision that regulated utilities play a critical role in the state’s broad and extraordinary goal to remove greenhouse gas emissions from its transportation sector,” the PUC decision said.
The commission said that Xcel Energy was in “a unique position to facilitate the buildout of infrastructure necessary to support widespread confidence and practicality of EV adoption.”
Still, one refrain through the decision was that private markets for EV infrastructure have matured and can do more of the job, without Xcel Energy customers having to pay for it.
“Facts on the ground are evolving,” Schonhaut said. “The commission has recognized that things have changed and that is good.”
Xcel Energy submitted its first TEP in 2020 with a price tag of $108 million. It included a pilot to build public chargers at six sites and a program under which the utility would install chargers in homes and businesses and bill for the service.
In its second plan submitted in 2023, Xcel Energy initially proposed spending $145 million to build 460 public chargers — even though its pilot program had run into problems — and continue its installation service.
The charging network proposal was opposed by private charging companies and the Charge Ahead Partnership, a lobbying group for businesses, including convenience store and gasoline station chains.
“Essentially, Xcel was trying to take over the charging marketplace in Colorado,” said Ryan McKinnon, a spokesman for the Charge Ahead Partnership.
Xcel Energy abandoned the idea and its plan — which was supported in a settlement agreement by the state energy office, a dozen environmental groups and businesses — proposed only offering rebates to those who build public charging stations.
The public charging rebate program will be funded at $20.2 million and target rural and disproportionately impacted communities, such as low-income and minority areas.
“We applaud the company’s decision to withdraw its initial proposal for substantial investments in utility-owned charging stations, as it appears that the unregulated market is now poised to fill this role,” the commission said.
McKinnon said, “It is a big win for EV drivers and the charging market in Colorado.”
Electric vehicle rebates held back from governments, rental car fleets
Residents of disproportionately impacted communities will also be eligible for a total of $5.3 million in rebates on the purchase of EVs. The rebates are set at $5,500 for new EVs and $3,000 for used EVs.
The commission, however, rejected proposals to offer $9.8 million in rebates to government and rental car fleets and communities that are not disproportionately impacted.
The home and business installation programs were challenged by the Independent Electrical Contractors Rocky Mountain Association. The commission agreed, cutting funding, saying: “We find that this shift to the unregulated market will attract many more electrical contractors to provide these services.”
Xcel Energy sounded a cautionary note about the PUC’s proposed shift. “We understand the broad policy direction the commission has indicated in this decision,” Xcel Energy said, “but are concerned about making such significant changes rapidly and without planning adequately for such a transition.”
The commission also cut $25 million from operations and maintenance costs as more of these will be picked up by the private sector.
A proposal for $60 million in distribution system upgrades was also removed from the plan as the PUC staff and the UCA questioned whether upgrades of the distribution system, which brings power to homes and businesses, even belonged in the transportation plan or were really a system maintenance cost better captured in a traditional rate case.
“Staff argues that if the company is genuinely convinced of the need for the distribution investments it proposes in this proceeding, it should feel comfortable implementing them in the ordinary course of business,” the decision said.