U.S. Utilities And The Electric Car

While utilities across the U.S. are struggling with stagnant electricity sales, there are those who see an opportunity in an increasing need for electric-car charging stations. However, the tactics being used by some companies are instigating complaints from consumer advocates.

Some electricity companies are asking permission to let them add fees to customer bills to fund pilot projects with the intention of developing networks of charging stations. But would this be a fair approach? Some critics claim that making all customers pay the high cost for the development of experimental equipment that would benefit only a small percentage of them is an unreasonable solution.

For example, San Diego-based Sempra Energy’s power utility wants to install 5,500 electric-car chargers at hundreds of office parks, apartment buildings and condominium complexes at an estimated cost of $100 million. The company suggests that the creation of convenient charging stations will inspire more California drivers to adopt electric cars, thereby improving the air quality for everyone. Sempra Energy wants to add a surcharge to all San Diego customers’ bills to fund this initiative. While the additional charge would only equal approximately 40 cents per month for an average customer, the Utility Reform Network, a nongovernmental organization that fights rate increases, has asked state regulators to reject this new fee.

Marcel Hawiger, a lawyer for the advocacy group, says that it is inappropriate to ask consumers to pay for risky business ventures, adding that there is no way to be certain that the equipment will be profitable in the long term and that it may quickly become outdated. “Shareholders should fund business opportunities for the company,” said Hawiger.

The advancements in energy efficiency for a multitude of products, from light bulbs to refrigerators, has put a dent in U.S. electricity usage. While the prospect of an increase in the number of electric cars on the road could revitalize consumer demand for power, electric cars have yet to become a very popular choice in the United States. According to the Electric Power Research Institute, there are currently only 200,000 electric cars in the U.S., but this number is starting to rise. Last year, Americans registered in excess of 46,000 new plug-in cars, according to research firm IHS, which is approximately three times the number in 2012. However, this still equals less than half a percent of all U.S. car registrations.

“There’s a place for electric vehicles, but it’ll be a long time before they come anywhere close to being a universal replacement to an internal-combustion vehicle,” says IHS analyst Phil Gott.

Some utility companies are now offering public charging stations, which may in turn increase the consumer demand for electric-cars. Dave McCreadie, head of electric-vehicle infrastructure at Ford, expects that increasing the number of convenient charging stations would put interested customer’s minds at ease. “It helps allay people’s fears that, ‘If I get an electric car I’m going to get stranded’,” says McCreadie. “If employers added chargers, it would help fill the gap.”