Investor-owned utilities to provide discount off-peak rate, all-renewable option
Minneapolis, MN – Signed into law by Governor Mark Dayton, clean energy advocates, including Minnesota utilities, worked together to create bipartisan and market-driven policy that has the following outcomes:
- Beginning in 2015, more than 1.3 million households will have access to a discounted rate for electric vehicle (EV) refueling.
- Also beginning in early 2015, investor-owned utilities will provide customers the option of zero-emissions EV refueling with renewable energy.
- State agencies can more easily consider electric fleet vehicles–previous purchasing decisions were not permitted to take into account the lower refueling and maintenance costs typical of EVs.
- The policy removes roadblocks to utilities becoming champions for EV adoption.
First in the nation
Taking leadership to accelerate private-sector adoption of EVs, Minnesota is the first state nationwide to require its investor-owned utilities to offer a special rate for off-peak (overnight) EV refueling.
Refueling rate expected to be less than $0.99 per gallon of gasoline (equivalent)
Co-operative utilities that pioneered off-peak EV refueling rates in Minnesota–Connexus and Dakota Electric–charge roughly 50 percent lower than average daily rates. Connexus and Dakota Electric currently offer an off-peak refueling rate that is equivalent to $0.57 per gallon of gas.
The U.S. Department of Energy provides a methodology for comparing the costs of gasoline and electric refueling. Under the new law, Minnesota’s three largest utilities–Xcel Energy, Minnesota Power, and Otter Tail Power–have until early 2015 to set their specific off-peak charging rates for electric vehicles. The law allows for flexibility in the specific rate design.
“This law is a win, win, win,’ said Michael Noble, executive director of Fresh Energy, a nonprofit organization dedicated to economic development and nonpartisan energy policy. “It’s a significant savings to consumers, an extraordinary market opportunity for utilities, and timely action for society. For the public, this law helps reduce harmful carbon pollution and also reduces risk and Minnesota’s economic exposure to volatile gasoline prices.”
Lowers costs for all ratepayers
Left unchecked, the booming EV market had the potential to increase costs for all electric ratepayers because people would likely to be plugging in to refuel during peak hours (e.g. 4:00PM to 8:00PM). The new off-peak refueling incentive saves all ratepayers money by more evenly distributing demand on the electricity grid.
State-Recognized Financial and Environmental Benefits
The new law recognizes the “financial, energy conservation, and environmental benefits of electric vehicles” (statute).
Unique Marketing and Consumer Education Exception for Utilities
As regulated monopolies, investor-owned utilities have been discouraged from use of promotion and advertising to increase sales and electrical consumption. This new law creates a special exception specifically for informing and educating consumers about the benefits of electric vehicles and the availability of the off-peak refueling rate.
Promotion of the off-peak program could take the form of
- electric bills that highlight fuel-cost savings, avoided tailpipe emissions, etc.,
- rebates for residential refueling equipment,
- point of purchase displays at automotive dealerships, and
- television, print, and online advertising.
Wide Variety of Electric Vehicles in Minnesota
Eleven different models of electric vehicles from eight different brands are currently available in Minnesota. Models available are: Nissan Leaf, BMW i3, Ford Focus EV, Ford Fusion Energi, Porsche Panamera S E-Hybrid, Chevrolet Volt, Cadillac ELR, Tesla Model S, Ford C-Max, Mitsubishi i-Miev, and Smart Electric Drive. Lease rates for the Nissan Leaf, Mitsubishi i-Miev, and Smart Electric Drive may start as low as $200 per month.