Power companies are loaning out Teslas in Washington, electrifying bus fleets in Virginia and lobbying for electric vehicle tax credits on Capitol Hill.
San Diego Gas & Electric Co even went so far as to help train salespeople on how to convince consumers to buy electric vehicles (EVs) and then paid them as much as US$500 per sale. It is all part of a US$1.5 billion effort by utilities such as Exelon Corp and Dominion Energy Inc to promote vehicles that run on electricity.
The companies see it not just as a chance to sell more power, but to balance electricity demand and meet sustainability goals, said Max Baumhefner, a senior attorney with the Natural Resources Defense Council, a non-profit international environmental advocacy group.
“The grid is built for the one hour of the year when electricity demand peaks,” Baumhefner said. Pushing energy consumption to after-hours, when many drivers charge their cars at home, helps smooth out the swings in usage and could even reduce power costs for everyone, he said.
Yet some aspects of the industry’s campaign — such as lobbying for tax credits or against US President Donald Trump’s rollback of efficiency standards — have put the companies at odds with powerful oil interests. Half of US oil demand is for gasoline.
GROWTH
Electric and plug-in hybrid vehicles are a threat to that, even if they account for about 1.4 million, or 0.7 percent, of the vehicles on US roads.
Within five years, BloombergNEF predicts that they would represent as many as 7 percent of US vehicle sales, due to declining battery costs and a growing number of options.
That is a promising figure for utilities, which have seen electricity demand flatten as household appliances become more efficient.
By 2040, 10 percent of electric demand would come from electric vehicles, BloombergNEF said.
However, some motorists still have qualms.
“When we did focus groups, customers were telling us: ‘We have apprehension. We’re uneasy,’ whether it’s range anxiety or the upkeep,” Exelon Utilities chief executive officer Calvin Butler said.
SALES TACTICS
That has led to some extraordinary efforts on the part of the electric companies to put consumers at ease, such as San Diego Gas & Electric’s collaboration with pro-EV PlugStar to train showroom salespeople.
“Who better to sell somebody on an EV than the salesperson?” San Diego Gas & Electric chief environmental officer Estela de Llanos said. “By incentivizing some of these dealer employees, we like to think we planted the seed for more of that to happen.”
An Exelon start-up called EZ-EV helps motorists take test drives, calculate mileage needs and narrow down options — then score discounts at local dealerships. Motorists who sign up for a monthly vehicle subscription with Exelon’s Steer can also shift between electric models, from a Tesla Model X to a Porsche Cayenne.
Utilities also have asked state regulators in the US to approve more than 80 plans for advancing electric vehicles and charging infrastructure, said Atlas EV Hub, which tracks the efforts.
The bulk of the programs — about 78 percent of the requested initiatives — have won approval, Atlas Public Policy founder Nick Nigro said.
OPPOSITION
However, the proposals are meeting steep resistance from the oil industry, in some cases joined by the Koch-backed Americans for Prosperity and large power consumers wary of higher costs. With about half of US oil demand today tied to gasoline, the sector is fighting electric vehicles on all fronts, from statehouses and state regulatory commissions to Capitol Hill.
In the US Congress, oil and utility interests have squared off over efforts to expand a US$7,500 tax credit for electric vehicles.
The utility industry’s leading trade group, the Edison Electric Institute, has lobbied alongside automakers Tesla Inc and General Motors Co to expand the tax credit, while oil interests say that climbing sales and the surge in Tesla’s value show subsidies are no longer needed to jump-start a new industry.
Refiners and their trade associations “have waged a state-by-state campaign” to block utility investments in electric vehicle infrastructure, the Edison Electric Institute said in a May court filing. They are using “all available tools in all available forums to attempt to slow or stop the general move toward electric and other clean energy transportation, which they view as an existential threat,” the filing said.
In October last year, Massachusetts regulators turned back much of National Grid PLC’s US$167 million plan to install thousands of charging stations at parking lots, government offices, apartment buildings and other spots, after the American Petroleum Institute, gas station chain Cumberland Farms Inc and fuel supplier Global Partners LP blasted the initiative.
In Minnesota, a coalition including Marathon Petroleum Corp, and Koch Industries Inc refining company Flint Hills Resources Pine Bend have mounted a legal challenge to Xcel Energy Inc’s US$25 million electric vehicle plan.
Oil industry interests have also lobbied states to impose annual fees on electric vehicle users they say are needed to ensure electric vehicle drivers who do not pay gas taxes help fund roads and bridges.
“It’s fundamentally unfair to take the monopoly power that the utility has and charge everybody higher rates to build out infrastructure that 2 percent of today’s purchasers use,” said Derrick Morgan, senior vice president of the American Fuel and Petrochemical Manufacturers. “It’s a very big gamble with other people’s money.”
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