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A Ford Escape Hybrid plug-in.

Paul Sakuma, Associated Press

Dakota Electric proposes new way to pay to recharge electric vehicles

  • Article by: DAVID SHAFFER
  • Star Tribune
  • October 16, 2012 - 10:24 PM

As plug-in electric cars gain a toehold in Minnesota, a suburban Twin Cities power company is proposing the state's first special electric rates for charging vehicles at home.

Dakota Electric Association, a utility cooperative serving 101,000 customers in four counties, plans to offer owners of plug-in cars like the Chevrolet Volt and Nissan Leaf low electric rates at night as an incentive to charge the cars when power demand is low.

During much of the day, electricity for car chargers would be priced roughly at standard residential rates, but the price would rise dramatically during periods of peak electrical demand in late afternoon and evening on weekdays.

If the rate pilot program is approved by state regulators, Dakota Electric would join 22 other U.S. utilities offering electricity pricing plans tailored for in-home charging stations. The program would be voluntary and would require a separate electric meter strictly for the charging station.

"It will encourage people to charge at night, but if they came home from work and want to take the car someplace later and need the battery charged, they can do that," said Joe Miller, spokesman for Dakota Electric. "They will just know that they are going to be paying more for it."

Dakota Electric is the state's fourth-largest retail electric utility and serves parts of Dakota, Goodhue, Scott and Rice counties. It is the only Minnesota electric cooperative that, by its own choice, has rates regulated by the state Public Utilities Commission.

The commission is scheduled to consider the rate request on Thursday. Two state agencies that represent consumers before the rate-making body generally have supported the car-charger pricing plan. But the Minnesota attorney general has argued that the peak rates -- more than three times higher than typical daytime rates -- are excessive.

Other utilities, including the state's largest, Minneapolis-based Xcel Energy Inc., are watching Dakota Electric's pilot project. Like some other utilities, Xcel offers an off-peak residential rate, but not one specifically structured for electric vehicles. Unless customers can shift a major portion of their household's electrical use to the nighttime, the off-peak rate doesn't offer a cost saving.

"What we struggle with in ratemaking is that you have to have some information to know how it is going to work and whether you have enough customers to develop separate rates," said Scott Hults, who works on account management for electric vehicles at Xcel. "It is something we are going to be watching and we will be evaluating, certainly."

Few electric cars so far

Minnesota is far from being a hotbed for plug-in vehicles.

Just 550 plug-in electric vehicles are expected to be sold this year in Minnesota, according to a report last month by Pike Research, a clean-tech market research firm based in Boulder, Colo.

By the end of the decade, Minnesota sales of plug-ins could grow to 4,700 annually, which means that more than 20,000 could be on the state's roads in 2020.

U.S. sales of plug-ins are expected to reach 400,000 a year by 2020, Pike estimated. California likely will remain the No. 1 market, accounting for one in four plug-in electric vehicles, Pike said. Minnesota is expected to rank 22nd, the report said.

The limited number of public charging stations has meant that most plug-in vehicle owners must charge their cars at home, which can take eight to 10 hours unless they have a special charging station installed.

Twenty cooperatives that are part of the Great River Energy system allow owners of electric vehicles to take advantage of low overnight electricity rates offered to customers who use off-peak heat storage equipment for hot water or heating.

But the heat-storage rate has a major limitation for plug-in owners. Its separate, demand-limited meter shuts down -- offering no electricity -- between 7 a.m. and 11 p.m. For electric vehicle owners who choose that system, called ChargeWise, there is no way to use their home charging stations during the day.

That's not been a problem for Bill Middlecamp of Apple Valley, who purchased a Nissan Leaf in June and uses it to commute to work and make local trips. He signed up for Dakota Electric's existing ChargeWise rate, even though it means he can't use his recharging station during the day.

"It works very well for me," said Middlecamp, who sets the charger to operate overnight, typically about three hours.

He said it's unlikely he will sign up for the new plug-in rate unless his driving pattern changes and he needs day charging. His family has a second, gasoline car, that is used for longer trips, he added.

"I think that being able to charge during the day is going to be useful for a lot of people but it isn't necessarily for us," Middlecamp said.

David Shaffer • 612-673-7090

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