Why Colorado utilities should gear up for transportation electrification — The Mountain Town News #ActOnClimate #KeepItInTheGround

Coyote Gulch’s Leaf charging at campsite near Steamboat Springs August 21, 2017.

From The Mountain Town News (Allen Best):

Marrying electrical utilities and electrified transportation

Electric cars constitute disruptive technology. By one estimate, sales will increase almost six-fold nationally during the next five years. Another study foretells that 10 percent of all cars nationally will be plug-in hybrid or all-electric vehicles by 2025.

Instead of driving up to gas pumps at Shell and other stations, we’ll be fueling up with electricity. This represents increased demand for utilities, a sector that has seen little or no growth in recent years because of improved energy efficiency. For governments that have set aggressive goals for reduction of greenhouse gases, it represents an opportunity to pair up electrified transportation with low-cost renewables, shrinking the carbon footprint in the process.

Where does the Colorado Public Utilities come into this? That was the essential questions asked by PUC commissioners recently as they heard testimony from a dozen speakers.

The intent when inviting their comments, said Jeffrey Ackermann, the chairman of the PUC, was to get a feel for what constitutes “reasonable expectations of utilities.”

The goal is to “see where the market is going and work with the momentum that is already out there,” said Ackermann.

Speakers at the Dec. 8 information meeting repeatedly told the PUC commissioners the same thing: You do have a larger role in this business and technology transformation, not less. Many also spoke about the imminence of autonomous vehicles, such as has been the focal work of another Coloradan, Rutt Bridges.

Chris Nelder, manager of vehicle-grid integration for the Rocky Mountain Institute, described the transition as potentially a problem, but also a benefit. “It’s not something we can sleep on,” he said.

Nelder and other speakers called for the PUC to help ensure that sufficient charging stations are provided by utilities. He and others also called for utility rate schedules that encourage EV-charging in ways that maximize use of low-cost renewable energy.

Widespread adoption of EVs will be good for utility ratepayers altogether, commissioners were told. The significant increase in demand will occur mostly during off-peak periods, causing a downward pressure on electrical rates that benefit all ratepayers.

The commissioners also heard that air quality and greenhouse gas reduction efforts will be aided by more rapid adoption of EVs. Instead of burning gasoline and diesel, EVs will be fueled by electricity, increasingly so from renewable sources. In that way, air quality will be improved.

Will Toor, transportation manager for the Southwest Energy Efficiency Project, said that driving an EV today in areas serviced by Xcel Energy, the state’s largest utility, is the equivalent of driving an internal-combustion car that gets 48 miles per gallon, in terms of its air quality benefits. By 2025, as Xcel further cleans up its electricity, that same car will be getting the equivalent of 75 mpg in terms of air quality benefits.

Shifting to electrified transportation can also reduce greenhouse gas emissions. In 2015, transportation overtook electrical production as the leading source of greenhouse gas emissions in the United States, according to the U.S. Department of Energy.

Nelder, drawing heavily from the Rocky Mountain Institute’s October 2017 report, “Gas to Grid,” which he co-wrote, said that getting people to buy EVs isn’t the main problem anymore. “The EVs are coming—and fast,” he said. Range anxiety has diminished as new models are capable of traveling 200 miles or more on a single charge. You can even buy a Tesla with 600-mile range, but at a cost: $250,000.

But even more bottom-shelf models are getting extended miles even as prices drop. In June, Bloomberg New Energy Finance predicted price parity between EVs and traditional internal-combustion engines by 2025.

EV owners in Colorado are currently clustered along the Front Range, as is the population altogether. But there are small clusters on the Western Slope, mostly clearly in the Aspen-Glenwood Springs area.

Despite this strong market momentum, speakers testified that the state-regulated utilities have a role in accelerating the transition.

So does Colorado. Gov. John Hickenlooper, in an executive order issued July 11, specified a 2025 goal of cutting greenhouse gas emissions statewide by more than 26 percent. He asked for a plan by Jan. 1 to “build out key charging corridors that will facilitate economic development and boost tourism across the state while reducing harmful air pollution.”

Colorado intends to use $10 million of its $68.5 million in proceeds from the Volkswagen emissions settlement for charging stations along interstate highways.

Should utilities take part in this installation of charging stations beyond this program? Speakers repeatedly said yes.

More than 80 percent of charging is expected to be at home. However, public charging plays a role, too. That’s why Tesla several years ago began installing charging stations in sometimes out–of-the-way places, to give comfort to owners of Tesla’s electric cars that they could get across North America and back again.

Studies have shown that somebody with charging infrastructure at a workplace is six times more likely to buy an electric car.

While any electrical outlet can charge an EV, more rapid fueling occurs with Level 2 chargers. Faster yet are direct-current fast-chargers, called DCFC. Colorado next year is expected to have 87 of them, but if this rapid growth occurs, within 15 years it will need 3,239. The slower, level-2 chargers will need to grow from almost 23,000 next year to 842,000.

These are apples and oranges in cost, too. Level 2 chargers can be had for $500, but a high-speed charger can cost up to $500,000. With that much invested, they need high rates of use.

“It’s all about utilization, utilization, utilization,” said Jonathan Levy, director of policy and strategy for Vision Ridge Partners, a Boulder-based equity and venture capital fund that specializes in the sustainability sector.

The agency has direct responsibility for regulation of the state’s two investor-owned utilities, Xcel Energy and Black Hills Energy, which together provide electricity for between 60 and 70 percent of Coloradans, and also the transmission planning by Tri-State Generation & Transmission. The agency has no authority in regulating the mostly rural electrical co-operatives or the municipal providers, such as Colorado Sprigns Utilities.

Nelder said the PUC might allow Xcel and Black Hills higher rates of return if they can figure out how to get high use of the high-speed chargers. He said chargers placed along major highways get higher use than those in cities.

That same point was made by SWEEP’s Toor. He pointed to a study that found the operating cost for a high-speed charger located along a major highway was $10,000 a year, compared to $39,163 for those in urban areas.

He also pointed to the need for charging infrastructure in multi-family housing. In Colorado, 24 percent of people live in multi-family housing. In Denver, it’s closer to 40 percent, he said. That’s challenging on the face of it, and lower-income housing introduces a social-equity issue. He suggested this is where PUC commissioners should nudge utilities into providing charging stations.

That same point was made by Liz Babcock, manager of air, water and climate for the Denver Department of Public Health and Environment. She said Denver plans to invest $250,000 in charging infrastructure. But she said it was “critical” that incentives be given Xcel Energy to install charging stations in multi-family housing projects.

Denver, she said, has a goal of attaining 100 percent carbon-free energy for public transportation by 2050.

To push vehicle electrification, the city introduced a public messaging campaign to drive electrify vehicles. It’s called Pass Gas Denver. “Kind of cheeky,” said Babcock.

A different kind of social justice issue is how more rural areas can have access to charging infrastructure.

Christian Willis, director of transportation fuels & technology for the Colorado Energy Office, said another question is how to incentivize charging infrastructure along Colorado’s secondary highways, which don’t get as much traffic.

The sheer bulk of vehicle electrification may strain existing utility infrastructure in times and places. Nelder pointed to the effort to develop next-generration solid-state batteries. Toyota says it will deliver these to market within two years. Nelder reported potential for major charging, such as at facilities handling electric buses, causing demand to surge. “Ten to 15 megawatts at a single charging location? That’s not trivial,” said Nelder.

At the pace of adoption that the Rocky Mountain Institute foresees, Colorado will need 37 times as many charging stations in 15 years, said Nelder.

That adoption rate will also cause electrical demand for cars in Colorado to grow from 23 megawatts in 2018 to 849 megawatts in 2033. That’s the load equivalent to Xcel’s largest single electrical sources, such as major coal plants or giant wind farms.

Rate structures that encourage electric car owners to use low-cost electricity at non-peak times, called time-of-use rates, is another area where the PUC may work with utilities.

California utilities have adopted policies that encourage charing of EVs during non-peak times. Slide/SWEEP

“You all control rate design, and rate design is crucial to adoption of electrified transportation,” said Max Baumhefner, an attorney with the Natural Resources Defense Council, an environmental group

Thad Kurowski, from Tesla, echoed that argument, calling for time-of-use rate structures that encourage charging of car batteries when electricity is cheapest.

As for Xcel Energy, it’s not publicly advocating anything, said Jack Ihle, director of regulatory and strategic analysis for the Public Service Co. of Colorado, the Xcel subsidiary. “Our customers and communities are asking for help to do this; we are excited about the opportunity to electrify transportation.”

Colorado won’t necessarily have to invent this electrified wheel. California, said Nelder, is the leader,” far and away. They are hacking through the jungles and clearing the path for everyone else to follow.”

The PUC already has some authority to move into this new arena of electrified transportation, said Ackermann. Another commissioner, Frances Koncilja, suggested the commission may need legislative guidance.

The PUC has scheduled no next steps in this discussion about electrified transportation. The commission uses such information meetings as educational opportunities, but not necessarily as a stepping stone to further action, says Terry Bote, external affairs manager for the PUC. “As far as I am aware, there are no plans to issue a position paper.”

The PUC has scheduled no next steps in this discussion about electrified transportation. The commission uses such information meetings as educational opportunities, but not necessarily as a stepping stone to further action, says Terry Bote, external affairs manager for the PUC. “As far as I am aware, there are no plans to issue a position paper.”

Also worth reading: the New York Times report, “What Needs to Happen Before Electric Cars Take over the World.”

PowerPoints of speakers at the PUC hearing can be found here.

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