CHEAPER BY THE KILOWATT: Minnesota soon may require utilities to set a cut-rate price for off-peak electricity for electric vehicle owners to keep costs in check for other ratepayers.
By Tom Steward | Watchdog Minnesota Bureau
Just one speed bump, though. You’ll need to be driving the right kind of vehicle — one of maybe 5,000 electric models now on Minnesota roads.
Yet supporters claim even those who will never own, much less plug in, an EV will also benefit from the “time-of-day” legislation. The dirty secret, they say, is that electric vehicles are on a crash course with ratepayers.
“Do electric car owners save money under this? Yeah, but the rest of us save a lot more,” said Rep. Pat Garafalo, R-Farmington, author of the bill in the Minnesota House. “If we start having more and more electric cars plugged in, every single electric car is like a small house on the grid.”
Think the price of a gallon of gas fluctuates dramatically? The same could happen to electric bills as more EVs hit the highway, regardless of whether you own an electric vehicle.
Legislators say the increasing number of electric-powered cars on the grid will cost ratepayers no matter what, by accelerating demand and energy costs for everyone. The wholesale price of electricity varies dramatically, depending on the time of day. Utilities spread the wholesale cost of power to all ratepayers.
“If you want to pay for your neighbor’s plug-in, then just have them plug in at five or six o’clock in the day,” said Garafalo. “They’ll pay a little bit more money because they’ll just be using the regular rate. However, all of us will be paying a lot more because peak charges in the wholesale market are way, way, way more expensive than off-peak.”
The measure would require bigger utilities to set a special cut-rate tariff for electric vehicles to plug in during off-peak hours. At two Twin City area electric cooperatives offering the option, EV owners charging up during off hours already pay less than half the going rate — about 13 cents per kilowatt-hour.
“We’re very happy with the lower rate of 5.7 cents a kilowatt hour that we pay for off-peak usage,” Mark Hanson, an EV owner from Blaine, said during a recent committee hearing. “Our understanding is that Connexus and therefore, its customers, save two to three times that amount of money over us plugging in during peak hours when we get home.”
Who’s steering the move to pass the “time-of-day” price break? An environmental group, Fresh Energy, that’s received millions from out-of-state interests to lobby for energy conservation mandates while pushing a transition to electricity-guzzling vehicles.
“That’s the funny thing, there’s all this focus on conservation and doing less,” said Garafalo. “But when you point out that electric cars will drive the grid up, there’s kind of a divide like, oil is bad but coal is less bad. It’s actually kind of funny.”
Doubts about the environmental advantages of electric vehicles in several respected scientific studies haven’t slowed the green group’s attempt to get the cut-rate incentive across the legislative finish line this session.
“It would provide Minnesota residents with a convenient and attractive way to charge their car at home and see the savings on their utility bill,” said Ross Abbey, a policy associate for Fresh Energy at a recent committee hearing. “… And the bill also removes regulatory uncertainty and clears the way for rate-regulated utilities to really become champions for electric vehicle adoption here in Minnesota.”
Contact Tom Steward at email@example.com.