Xcel unveils $45M EV rollout plan, a scaled-back version of scrapped proposal

Xcel Energy has a new $44.5 million plan to boost electric vehicle adoption in Minnesota that includes rebates for home-wiring upgrades but a much smaller foray into charging infrastructure than its original plan.

Xcel withdrew a $330 million proposal in June after the Minnesota Public Utilities Commission (PUC) approved a smaller rate increase than it wanted and the utility received criticism from gas station owners, Gov. Tim Walz's administration, and Attorney General Keith Ellison's office.

Top company officials said Xcel regrouped to find greater consensus on how it can support the construction of more public EV charging infrastructure after the criticism of its original idea to build and operate 730 high-speed charging stations.

That build-out program — novel and controversial — would have cost $192 million alone before it was nixed.

Anjali Bains, lead director of energy access and equity for the nonprofit Fresh Energy, said the new proposal is more of a "continuation or expansion" in areas that have already been "thoroughly discussed."

Nadia El Mallakh, Xcel's vice president of clean transportation, said Xcel is analyzing "gaps in the market" for public fast charging and explored the merits of offering rebates to build the infrastructure or partnering with private companies like gas stations.

Plus, she said the industry is in flux as many automakers adopt Tesla's charging technology rather than use a charging port design considered standard in a federal EV infrastructure program.

"When we saw this happening, it really created more uncertainty in the market," El Mallakh said.

Xcel laid out pros and cons of each approach to public charging infrastructure in its filing with state regulators last week. Xcel also plans to update its proposal next year after feedback from the PUC and others.

Earlier this year, the Minnesota Department of Commerce and the AG's Office argued Xcel hadn't been successful enough running existing EV pilots to justify a large initiative to build hundreds of company-owned chargers. Truck stop and gas station owners said a utility-owned network would squelch private investment and slow EV adoption.

Xcel dropped the entire $330 million proposal just hours after the PUC granted the company a much smaller rate hike than it wanted. The company has appealed that decision.

El Mallakh said roughly 80% of EV charging is done at home. Nevertheless, the company says public fast chargers are being outpaced by EV adoption in Minnesota, and lack of charging infrastructure is the top reason for why people don't buy electric cars.

The state has a goal for 20% of light-duty vehicles to run on electricity by 2030. The transportation sector is the largest source of carbon emissions in Minnesota, according to state data.

The biggest piece of the smaller new EV plan would keep two pilot programs running that pay for government and nonprofit electric fleet infrastructure and public charging efforts. Xcel says $22 million would be enough for 91 potential projects the company already had interest in before all the money in the programs had been allocated.

One of the pilot programs allows customers to charge when energy demand is low for a flat monthly fee.

The company also proposed a rebate program to ease the costs of installing wiring that is needed to build a Level 2 charging station, which is more powerful than a normal wall outlet. The rebate would be up to $500 for residential customers or $1,200 to people who meet certain criteria such as living within a state-defined environmental justice area.

Xcel's plans also include more EV advisory services for customers and a $1.3 million project that includes a test of using electric buses as power sources for the grid when they're not being driven. The company said in PUC filings that it could expand its school bus electrification efforts once it can better coordinate with state officials running a new grant program for electric buses.

Xcel had originally proposed more than $30 million for a school bus pilot program in its earlier scrapped transportation plan.

The PUC would ultimately need to approve Xcel's EV programs — and costs that would be passed down to ratepayers. The costs would be spread over the next four years, and would add up to 5 cents per billing period for the average residential customer next year and 24 cents in 2027.

Bains, of Fresh Energy, said utilities have a strong role in supporting public charging and would like more discussion of how Xcel is preparing to support charging for medium and heavy-duty vehicles.

But she said she is "really glad" to see the wiring rebate come to Minnesota and happy for proposals where the "basis for making these investments has been so strongly established."

Walker Orenstein • 612-673-4246