Colorado regulators give Xcel Energy green light to invest in electric transportation, but limit vehicle rebates

Xcel Energy-Colorado got a green light Wednesday to charge ahead with its plan to invest in equipment and offer rebates to increase the use of electric vehicles.

The Colorado Public Utilities Commission voted to support Xcel Energy’s plan to spend $102 million over three years to build charging stations, incentivize homeowners to install charging equipment and provide support for converting school buses, government and business fleets to electric.

However, the three PUC members split on the utility’s proposal to offer rebates to people who buy electric vehicles. Discussions between Xcel Energy and the Colorado Energy Office led to a proposal that would have added roughly $30 million to the utility’s plan by offering rebates to get more electric vehicles on the road.

Instead, two PUC members voted to limit the rebate program to $5 million for rebates for low-income car buyers. The rebates would be offered on vehicles with suggested prices of $50,000 or less.

The PUC will issue a written decision later.

“This is the dawn of a new era for clean, efficient transportation in Colorado,” Travis Madsen, transportation program director at the Southwest Energy Efficiency Project, said in an email. “There’s something for everyone to like in this decision. It will save Coloradans millions of dollars. At the same time, it will help clean up our air, protect our health, reduce climate change and greatly improve energy efficiency.”

Xcel Energy submitted its electric transportation plan after a 2019 law cleared the way for regulated utilities to invest in equipment and programs to boost the use of electric vehicles, one of Gov. Jared Polis’ major goals. His administration’s target is to have nearly 1 million electric vehicles on the roads by 2030 to help meet the state’s goals for reducing greenhouse-gas emissions and improving air quality.

The 2019 law also allows Xcel Energy and other investor-owned utilities to recover the costs of building the charging stations and other expenditures from its customers. The PUC voted to allow Xcel Energy to add a charge, or “rider,” to customers’ monthly bills.

The average residential customer would pay 67 cents more per month if the plan is approved, Xcel Energy has said.

John Gavan split with the other two commissioners to vote against rebates.

“I think this rebate is very, very bad public policy. Essentially, we are asking ratepayers to help rich people to buy expensive cars,” Gavan said. “It is absolutely the wrong time to even be contemplating this. We’ve got a pandemic. We’ve got a recession.”

Gavan suggested waiting until Xcel Energy submits its next proposal in three years when prices for electric vehicles will likely be lower. He said he didn’t believe capping the price of cars eligible for the rebates would help in the current market.

The rebates apply to new and used cars.

The Colorado Office of Consumer Counsel opposed the rebate program. But Cindy Schonhaut, the director, said her office doesn’t object to the limited program. “The commission had a tough job, sorting out all the different interests.”

PUC Chairman Jeffrey Ackermann acknowledged concerns about the potential impacts on Xcel Energy customers and questions about the fairness of people who can’t afford electric vehicles helping pay for rebates. He said the staff and others voiced objections to the proposed rebates, but offered little in the way of options to meet the state’s goals for addressing climate change and increasing the use of electric vehicles.

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