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Xcel Energy to invest $110 million in Colorado electric vehicles

Jordan Smith
By Jordan Smith May 18th, 2021
4 min read
For business

Xcel Energy will soon invest millions into Colorado electric vehicles.

Regulators in Colorado recently approved a proposal from Xcel Energy to promote electric vehicles (EVs). The transport electrification plan includes developing a network of 20,000 charging stations. It also involves premiums for purchasing EVs and incentives to charge EVs during off-peak hours.

The initiative will be funded by a 67-cent charge on ratepayers’ utility bills. But the Colorado Energy Office believes that the plan will reduce electric rates in the long run. They believe it will encourage customers to charge their vehicles when electricity costs are low.

Will Toor, director of the Energy Office, describes Xcel’s plan as “well-designed” and “comprehensive.” “From the state’s perspective, we are very pleased with the decision the Public Utilities Commission made,” he explains. “Both the level of investment and ambition in the plan line up very well with the imperative to electrify our transportation system.”

Xcel’s program aims to support Colorado’s goal of having 940,000 EVs on the road by 2030. Xcel Energy would need to have 450,000 EVs operating in its service area by that time to achieve the state’s goal. Currently, Xcel serves approximately 30,000 light-duty EVs in Colorado. The utility expects this figure to rise to 100,000 over the next three years.

Utility pushes energy transition

In addition to its support for EVs, Xcel Energy aims to lower greenhouse gas emissions across its operations by 80 percent by 2030. The utility intends to supply 100 percent of its energy to customers from carbon-free sources by 2050.

The utility’s 2018 announcement of its clean energy target included a plan to close two coal-fired power plants in Colorado. To replace them, Xcel Energy committed $2.5 billion to support the development of renewables and battery storage.

One year later, Colorado Gov. Jared Polis signed a series of legislative measures. These set ambitious clean energy goals for the state. They included 100 percent renewable electricity by 2040 and a 90 percent reduction in greenhouse gas emissions by 2050. They also included a major buildout of EV infrastructure. A key element of the legislative package was an electric vehicle bill that allows utilities to recover costs for EV charging stations. It also tasks the Public Utilities Commission with approving the construction of the facilities.

Shortly after bills came into force, state authorities adopted a zero-emissions vehicle mandate. This required automakers to offer more EVs for sale.

Part of Xcel’s latest $110 million investment in EV development seeks to support this growing market by providing consumers with a rebate of $5,500 for every new EV purchased and $3,000 for used EVs. The rebate program will cap at $5 million under the plan. This cap came after the PUC ruled that the incentives should only be available to low-income customers. Xcel Energy initially proposed that the rebate program would cost $30 million.

Xcel’s EV plans support state roadmap

Xcel’s latest initiative is a response to these legislative changes. It builds on Colorado’s EV Plan 2020. This included the 2030 target of having 940,000 EVs on the road and transitioning buses and trucks to electric power.

Clean energy advocates and environmental groups welcomed Colorado’s EV plan. “This plan is the first time Colorado has set a goal to transition all vehicles to clean, zero-pollution energy,” commented Travis Madsen, Transportation Program Director for the nonprofit Southwest Energy Efficiency Project. “That’s a big deal.”

Officials have justified the renewable focus on Colorado’s transportation sector by pointing out that it is the state’s largest source of carbon emissions. They also stress that to achieve a goal of 100 percent EVs on the state’s roads by mid-century, sales of EVs will need to rise quickly over the next decade.

“If we’re going to need something like 100 percent adoption of electric vehicles and a light-duty fleet by 2050 and with vehicles having lifetimes of 12, 13, 14 years, that basically means moving toward something like 100% market share by the middle of the next decade,” stated Toor from the Energy Office. “That’s the type of thing that we’ll be quantifying and figuring out what policies will really be required to achieve that.”

It remains to be seen how the coronavirus pandemic impacts Colorado’s goal to grow the EV market. Toor warned that with the state facing a large budget shortfall, the funds required to support increasing EV infrastructure may be tougher to find.


Jordan Smith is a freelance journalist and translator covering issues related to energy, the environment, and politics. His work has appeared on the independent news site Opposing Views and at the Canadian Labour Institute.

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