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    Gas station owners, charging companies oppose Xcel Energy’s electric vehicle charging plan


    September 27, 2022 - Energy News Network

     

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      A coalition of retailers and charging station companies is objecting to a proposal by Xcel Energy to install hundreds of high-speed public charging stations across its Minnesota territory.

      Xcel Energy asked state regulators last month for permission to spend $170 million on a rapid expansion of charging infrastructure to help the state meet its goal of electrifying 20% of light duty vehicles by 2030.

      The utility said “range anxiety” will remain a barrier to that goal until drivers have enough charging options — it projects a need for 8,300 public fast-charging ports statewide by the end of the decade.

      Fewer than 100 exist today.

      “Unfortunately, we have not seen the market fill in key gaps regarding necessary public charging,” the utility said in its Aug. 2 filing.

      A representative for Xcel did not respond to an interview request.

      ‘A sweet deal’?

      Gas station and convenience store owners, EV charging companies, and conservative and free-market groups say Xcel Energy’s ability to use ratepayer money for the rollout would give it an unfair advantage in what’s expected nationally to be a nearly $50 billion a year market by the end of the decade.

      “It’s a sweet deal that they’re getting to be able to use ratepayer money to build the stations and then recoup that through their guaranteed return on equity,” said Ryan McKinnon, spokesperson for the Charge Ahead Partnership, which represents hundreds of businesses and industry groups.

      Monopoly utilities are usually guaranteed a level of profit when they build infrastructure – such as power plants or transmission lines – that state regulators determine is in the best interest of ratepayers. Xcel and other utilities nationwide are seeking to apply the same model to electric vehicle charging.

      Under the proposal, Xcel would build, own, and operate about 730 new high-speed public charging stations, each with two ports. That’s about 45% of the projected statewide need by 2026. An analysis would identify locations based on traffic and existing infrastructure. The utility says it would partner with site hosts and set prices to encourage off-peak charging. Chargers would be branded with Xcel Energy signage.

      The utility said it would hire a vendor to maintain the equipment, something that has been a challenge in other parts of the country – one recent study found that about a quarter of public charging outlets in the San Francisco Bay area were not working. Xcel said it would sign a service level agreement that guarantees a minimum level of uptime for its chargers and provides incentive to keep them working.

      “Xcel is basically the 500-pound gorilla,” said Lance Klatt, executive director of the Minnesota Service Station and Convenience Store Association. His members would like to see a different business model take hold in which retailers own the charging stations, sometimes in partnership with charging companies. “We just believe in a more open market approach and in competition.”

      New income for station owners

      The transition to electric vehicles represents both an existential threat and opportunity to gas stations and convenience stores. At-home charging will be the cheapest and most convenient option for many drivers, eliminating the need for many gas station stops. And many public chargers are being installed in other settings such as parks, office buildings, shopping centers, and even on curbside light posts.

      However, gasoline is a notoriously low-margin product for fueling station owners — most make their money selling snacks, beverages, and other in-store purchases. EV charging represents a chance to secure a bigger cut of that income. BP this year said its fast-charging stations were on the cusp of being more profitable than selling a tank of gas.

      Lonnie McQuirter, Jr., had a fast charger installed at his south Minneapolis 36Lyn Refuel Station in 2014. He said he doesn’t think utilities have the expertise to create charging stations that meet consumers’ needs because it isn’t part of their core business.

      “I’m not sure that it’s necessarily best for the current consumer,” McQuirter said, “but certainly if I’m a shareholder of Xcel — which I’m not — it definitely would suit me.”

      Instead, the Charge Ahead Partnership and other critics want Xcel to spin off its charging station business into a separate, unregulated affiliate company that would not have access to ratepayer money, which would “level the playing field” with retailers and charging companies, McKinnon said.

      They are seeking a contested case hearing before an administrative law judge before state regulators decide on the proposal.


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