Xcel drops plans for EV fast chargers after regulators nix preferred rate hike

Two state agencies support Xcel Energy's decision to suddenly withdraw a $330 million electric vehicle initiative after utility regulators shot down the company's rate hike requests.

Xcel hasn't done a good enough job with existing electric vehicle pilots to merit a big new program, say the Minnesota Department of Commerce and the Attorney General's Office.

"Xcel has not shown itself to be capable of leading the electric vehicle transition," the Attorney General's Office said in a recent filing with the Minnesota Public Utilities Commission (PUC).

In another recent filing, the Commerce Department said that "recent developments ... call into question [Xcel's] aptitude at operating in the EV space."

Both state departments represent ratepayers before the PUC. And both say Xcel is behind schedule on an already approved EV fast-charger initiative, and that it botched the rollout of commercial charging pilot programs in Minnesota.

Xcel acknowledges "operational challenges" in its commercial charging programs, but it defended its record in a statement to the Star Tribune.

"Xcel Energy is well suited to lead the transition to EVs. The company has decades of building and operating critical energy infrastructure effectively and reliably." Xcel noted that its flagship home EV charging program has met with overwhelming customer satisfaction.

Last summer, Minneapolis-based Xcel proposed a $330 million "Clean Transportation Portfolio," anchored by a $192 million plan to build and own 730 EV fast chargers in Minnesota.

On June 1, the PUC granted Xcel a three-year rate hike of 9% or $306 million, far short of the $440 million or 21% increase that Xcel wanted. Xcel, the state's largest electricity provider, said it was "extremely disappointed" with the PUC.

Just hours after the PUC's verdict, Xcel said it would reconsider significant investments in Minnesota — withdrawing its clean transportation proposal. The withdrawal must be approved by the PUC.

In PUC filings this month, the Commerce Department and Attorney General's Office criticized Xcel for tying the rate case outcome to its Minnesota EV plans. Still, both agencies support the withdrawal of Xcel's proposal.

In a filing, the Commerce Department said that "Xcel appears to be threatening to withdraw its previous commitments to the energy transition unless the [PUC] capitulates" to Xcel's request to reopen the rate case.

Xcel says it's committed to Minnesota's renewable energy transition.

The day before the June 1 rate case ruling, Xcel had told the PUC — in a separate docket — that its annual EV report filing would be delayed. Xcel said it discovered data issues with dozens of sites in its commercial EV pilot programs, leading to billing errors of $137,000.

Xcel has three commercial EV pilots already approved by the PUC.

In one, Xcel has installed Level 2 and DC fast chargers at 48 sites in a partnership with Hourcar, a St. Paul nonprofit aimed at making EVs more accessible to renters and lower-income neighborhoods.

Xcel discovered it had installed the wrong type of meters at 68 commercial EV pilot sites, the company said in June PUC filings. At another nine sites, the proper meter was installed, but it was not configured correctly to save data. Also, some charging sites were set up with an incorrect billing rate.

Xcel says it has replaced the meters, and that it will refund customers who were overbilled and not surcharge those who were underbilled.

"The company is conducting a comprehensive review of internal process management across our Clean Transportation portfolio," Xcel said in a June 30 report to the PUC.

In a statement to the Star Tribune, Xcel added that "a key purpose of pilot programs is to provide the opportunity to learn, identify challenges and find solutions to those challenges prior to implementing full scale."

The Commerce Department and the Attorney General's Office also criticized Xcel's rollout of 21 fast DC chargers, which the PUC approved last year.

"The company has not built a single DC [fast-charging] station, but it has projected a 40 % increase in costs over the original estimate," the Attorney General's Office said in a filing.

Xcel estimated in June that fast-charger costs rose from $5 million to $7 million due to supply chain constraints and rising labor and material expenses.

Xcel told the Star Tribune it has signed seven agreements with site owners for fast chargers — including fuel retailers and grocery stores. The company emphasized it has not missed any deadlines for rolling out the 21 fast chargers.

Xcel's plan to build an additional 730 fast chargers in Minnesota would have created the nation's largest utility-owned charging fleet. The proposal had garnered praise for filling the state's charging gap.

But it's also been criticized by non-utility competitors as well as the Commerce Department, the Attorney General's Office and Xcel ratepayers, who would eventually pay for it.