Utilities Hope to Boost Electricity Demand by Promoting Electric Car Use

September 3, 2014 DATAMARK

Thanks to more energy efficient products and appliances and changes in consumer behavior, per-capita electricity usage in the U.S. has been mostly flat since the 70s. Electric companies are looking for ways they can boost long-term demand for their product, so they are promoting the use of electric cars, according to a recent article from the Wall Street Journal.

But the tactics of some electric companies are raising the ire of consumer advocates.

For example, San Diego’s Sempra Energy is eager to install thousands of electric-car charging stations at workplaces and residences throughout the city, a project that the company estimates will cost $100 million. Sempra believes accessibility to convenient charging stations will encourage residents to buy more electric cars. However, they want all San Diegans to chip in toward the project and are requesting permission from state regulators to add a monthly fee of about 40 cents to customers’ bills.

And in Indiana, Indianapolis Power & Light wants customers to pay for a $16 million project to install 200 charging stations around the city to support an electric-car sharing service. The cost would add about 28 cents a month to customers’ power bills for the next 10 years.

The Utility Reform Network, a nonprofit consumer advocacy group that is against utility rate increases, objects to the Sempra Energy plan, saying it is unfair to make customers assume the risk of these kind of business ventures.

“Shareholders should fund business opportunities for the company,” Marcel Hawiger, the group’s lawyer, told the Journal.

In Indianapolis, utility-customer advocate group Citizens Action Coalition also wants Indianapolis Power & Light shareholders to bear the cost of the charging stations. Spreading the investment risk to customers via the monthly surcharge is “corporate welfare at its worst,” said CAC Executive Director Kerwin Olson.

By adding charging stations, utilities are hoping to energize electric car sales, which right now only make up less than half a percent of U.S. car registrations. Industry trade group Edison Electric Institute recently advised utility companies to set an example by using more electric vehicles. Currently, about 200,000 electric cars are on the road in the U.S., according to the Electric Power Research Institute.

The post Utilities Hope to Boost Electricity Demand by Promoting Electric Car Use appeared first on Outsourcing Insights.

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