Xcel proposes low-cost, off-peak rates for plug-in cars

Plugging in an electric vehicle soon will get significantly cheaper for Minnesota customers of Xcel Energy Inc., the state's largest power company.

The utility asked state regulators Friday to approve a rate for overnight home charging of electric cars at a 43 percent discount to residential service. The rate, if approved as proposed, likely will roll out in about six months, Xcel said.

"We are trying to provide more options for customers," Chris Clark, president of Xcel's Minnesota regional operations, said in an interview Friday. "This is really how we're seeing the future. We think customers are going to want to tailor their energy services to what their particular uses are."

Clark said electric vehicle owners would save about $9 per month under the proposed rate of 3.3 cents per kilowatt-hour offered from 9 p.m. to 9 a.m. weekdays and all hours on weekends and on holidays. When standard fuel charges are added, the rate is 6 cents per kwh. A $4.95 monthly basic charge would cover the cost of a separate electric meter.

Navigant Research, a clean-tech consulting and research firm in Boulder, Colo., said that 289,716 electric plug-in cars are in use nationwide, and 4,900 in Minnesota, although other sources offer lower estimates. Xcel would be the 23rd U.S. utility to offer plug-in rates, the firm said.

Kevin Schwain, Xcel's manager of emerging customer programs, estimated about 2,000 electric cars are in Xcel's Minnesota territory of 1.2 million customers. Schwain said the off-peak rates equate to 50 cents-per-gallon gasoline.

"When you move from fossil fuels to EVs, you already save a lot and now you have just cut it in half," said Jukka Kukkonen, principal in PlugInConnect, a Minnesota electric vehicle market and technology consulting firm who owns a Nissan Leaf. Driving it 1,000 miles would cost $15 under Xcel's program, he said.

Three metro-area power cooperatives pioneered off-peak electric vehicle rates in the state — Dakota Electric Association, starting in 2012, along with Connexus Energy and Wright-Hennepin Cooperative Electric Association. Many utilities, including Xcel, offer off-peak rates for other purposes.

Under a 2014 state law, investor-owned utilities must offer plug-in rates. Minnesota Power of Duluth and Otter Tail Power Co. of Fergus Falls said they also will offer ­programs.

Experts say that two plug-in cars draw about the same electricity as a typical household. But utilities don't want electric cars refueling in the daytime and early evening when power demand — and wholesale prices — are ­highest.

If a Connexus customer rapidly charges a car at retail power rates during high-demand periods, "we lose $1,200 a year," said CFO Mike Bash.

At Dakota Electric, spokesman Joe Miller said 46 customers with electric vehicles signed up for the off-peak rates. "It keeps the charging loads off our peak-demand times," he said.

Plugging in electric cars is part of the evening routine for Sam and Megan Villella of Blaine, who own a Tesla S and a Chevrolet Volt.

"Every night at 8 o'clock I go out in the garage and plug the cars in, and then I take the kids up to bed," said Sam ­Villella, a Connexus customer.

Villella said he pays $60 to $65 per month to charge two cars driven about 2,500 miles.

To take full advantage of the programs, car owners need special chargers. Villella said the units in his garage are 240 volts, and easily charge cars overnight. Timers can be set to charge off-peak only.

Xcel, which is the nation's most windpower-reliant utility, also proposes to give plug-in vehicle owners the option to purchase only wind-power for their electric cars. The "Windsource" option would cost about $2 more per month.

Much of Xcel's off-peak power is carbon free anyway. Nighttime power often comes from nuclear power plants, which run steadily, and wind farms, which often get the best breezes at night.

Xcel's lower-cost electric car rates come at a time of diving gasoline prices. Navigant analyst Scott Shepard said he doesn't think that trend will disrupt electric vehicle sales, which have shown strong growth for three years.

"Rather, dealers are likely compensating for the lower price of gas by selling … at lower prices to move these vehicles — making it a good time to buy," he said in an e-mail.

David Shaffer • 612-673-7090 Twitter: @ShafferStrib