Don't hand Xcel the Minneapolis EV charging marketplace

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Private retailers know the buck stops with them when it comes to customer satisfaction. One bad experience can lose a customer for life, so it is in every retailer's interest to make sure their facilities are clean, their service is top-notch and their prices are fair.

Unfortunately, this incentive structure does not exist in the world of electric-vehicle charging, where many EV chargers are owned and operated by public utilities. Power companies across the country have seen opportunities for a vertical monopoly in this space — they already generate and distribute the electricity, and now many want to use ratepayer funds to build EV charging stations and sell that electricity to drivers.

Perhaps no utility in the country is pursuing this strategy as aggressively as our own power provider here in Minneapolis, Xcel Energy.

Earlier this month, Xcel filed a request with the Minnesota Public Utilities Commission seeking permission to use nearly $200 million in ratepayer funds to build 730 high-speed EV charging stations by 2026.

If the commission approved this plan, every private retailer hoping to sell EV charging in Minnesota would get a message, loud and clear: Take your business elsewhere. No entrepreneur or forward-thinking business would risk their own money to buy, install and operate EV chargers when the power company can use ratepayer funds to subsidize a competing enterprise.

However, this isn't just bad news for private retailers or for Xcel customers who will be paying for a service most will never use. It's bad for EV drivers as well.

Public confidence in the availability and reliability of EV chargers continues to stagnate. A recent study released on Aug. 17 by J.D. Power found overall satisfaction with EV charging options has gone down in the past year.

The survey found that "the charging infrastructure [is] inadequate and plagued with non-functioning stations."

These results will not surprise anyone who has been paying attention. This is what happens when EV chargers are owned, maintained and operated by remote entities without a direct presence on site, which is precisely what Xcel's plan envisions.

Xcel is proposing to install chargers at locations where the proprietor will reap the theoretical benefits of having an EV charger on site — and nothing more. They will receive no rental payment for the use of their property, no portion of the proceeds from the charging sales, and they will have no authority or obligation to ensure the charger is functional.

The utility-owned, operator-absent model leaves EV drivers screaming into the void when they encounter a broken charger, having to remotely report the outage — a process that does nothing to solve their immediate problem of having nowhere to charge.

Simply Google "broken EV charger" to see how this model has worked elsewhere. It's been such a debacle that industry analysts worry that broken plugs threaten the future of EV adoption.

"If you look at the utility-run stations here in Maryland, they are down far more than the companies say. One station in a community college parking lot was out for months," one frustrated EV driver told Autoweek. "The chargers should have the same reliability as the electric grid the utilities maintain. As EV drivers, we're disappointed when we see stations used as photo ops with the governor, then forgotten about."

Why would Xcel pursue this strategy? Keep in mind that the utility receives a guaranteed return of 9.06% for any capital investment. As long as they install the chargers, they make money — regardless of whether those chargers are functional or ever get used.

However, private retailers who own and operate EV chargers know that their reputation and reliability are at stake. A customer who desperately needs a charge is not going to be very understanding if an advertised charging station is "down." That is why you rarely pull into a gas station only to discover the pumps aren't working, or try to buy groceries but can't because the cash register is broken.

Allowing private retailers to compete in the growing EV charging marketplace will ensure that EV ports are being maintained by someone with skin in the game and their reputation on the line.

The utility-run model, like many of the utility-owned EV chargers, is broken.

Lonnie McQuirter is the owner and operator of 36 Lyn Refuel Station in south Minneapolis, which in 2014 became one of the first retail locations in the Twin Cities to offer high-speed EV charging.