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IPL wants rate hike to fund car-sharing charging stations

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Mayor Greg Ballard’s hope of making Indianapolis the first U.S. city with an all-electric car-sharing service hinges on regulators’ approval of a rate hike to cover $16 million in installation and other costs to Indianapolis Power and Light.
 

rop-car-sharing-042114-15col.jpg Bollore Group’s all-electric cars are parked near a rental kiosk and charging stations on a street in Paris, where the company runs the Autolib’ car-sharing service. (Photo courtesy of Autolib’)

The impact on IPL’s typical residential customers would be 44 cents a month, starting in January 2018, according to a petition IPL filed April 11 with the Indiana Utility Regulatory Commission.

The city filed testimony by Ballard and other officials to support IPL’s case, which is key to the utility’s agreement with the city to install as many as 1,000 charging stations at 200 locations to support BlueIndy LLC, the local subsidiary of Bollore Group, a French conglomerate that wants to launch a car-sharing service here.

If regulators don’t approve IPL’s request, “We will lose this opportunity, there is no doubt of that, and I presume other opportunities will be lost, not the least of which are the benefits our proposal here is expected to deliver,” Ballard said in testimony that accompanies the filing. “I believe a clear signal will be sent that Hoosiers struggle to see beyond what we know works today.”

Bollore Group contacted Ballard’s office early last year after executives read about his plan to convert the entire city fleet to non-oil energy sources by 2025.

Bollore’s car-sharing service would be modeled on Autolib’, which launched in Paris in 2011. Four-seat electric cars, made by Bollore, would be parked in dedicated curbside spaces. Users would go online or to electronic kiosks to reserve the cars for short trips around town. The cars operate without keys, and drivers don’t have to return them to their pick-up locations. The charging stations would be open to any plug-in electric vehicle for a fee.

Ballard called car-sharing “transformational” because it would provide another transportation option that also gives residents easy access to electric-vehicle, or EV, technology.

EV chargers alone aren’t enough to convert masses of drivers to the technology, he said.

carshare_factbox.gif“The missing piece right now is having a service with enough car chargers, i.e. volume—and the car,” Ballard testified. “This is not just a technology. It’s an end-to-end service, which is critical.”

IPL is asking regulators to approve the rate hike because it wouldn’t sell enough electricity to BlueIndy—at least not in the first 30 months—to cover its initial outlay. IPL projects the cost of extending lines at $3.7 million, but says it would see only about $700,000 in revenue.

If regulators don’t approve the rate increase by Oct. 31, BlueIndy can bow out of its pact with the city.

If BlueIndy scales up as much as the company and city hope, IPL’s costs would rise to about $16 million. That includes interest on the capital, though the project would not require IPL to borrow money. The utility argues that its investors should be compensated for the lost-opportunity cost of deploying capital that could go to other projects, such as environmental compliance.

The city’s deal with BlueIndy includes a way to mitigate the rate hike if the service is profitable. BlueIndy will share 15 percent of its profit with the city and IPL, with the utility receiving the first $4 million. IPL agrees to spend the money on the car-sharing infrastructure, thereby lessening the planned rate hike.

IPL’s share of profits would gradually decline until the utility was fully reimbursed, according to the agreement. At that point, the city would receive 95 percent of the profit sharing.

The city/BlueIndy deal runs for 10 years with the option to extend it to 15 years.

Lost parking revenue

The biggest cost to the city will be removing downtown parking meters, according to the testimony of Director of Enterprise Development David Rosenberg. Under a 50-year lease the city signed in 2010, the city must reimburse the meter operator, ParkIndy, for revenue it loses to meters taken out of service for special events or other city needs.

The city roughly estimates its costs for the first phase of 25 car-sharing locations at $2.1 million, Rosenberg said. If BlueIndy scales up to 200 locations by June 30, 2016, as expected, the city’s cost could be $16.9 million, he said. Rosenberg said the city plans to apply for a Department of Energy grant to help cover those costs, which also include sidewalk improvements and signs.

ballard-greg-mug Ballard

Ballard first touted Bollore’s planned $35 million investment last June, saying the service would roll out this spring. Mayoral spokesman Marc Lotter declined to comment on Bollore’s progress, other than to say there would be an announcement in conjunction with the Electric Drive Transportation Association’s annual conference, which begins in Indianapolis May 19.

That’s when BlueIndy plans to have a free demo site set up downtown northeast of Washington and Meridian streets, according to the city/BlueIndy agreement. After the demonstration phase, BlueIndy would notify the city and IPL to proceed with 25 phase-one locations. As those sites are being tested, the company would schedule a “public launch,” triggering the start of its contract with the city.

BlueIndy President Herve Muller, based in Atlanta, did not respond to IBJ’s requests for comment. In testimony, he emphasized the parent company’s size and long-term investment in electric-vehicle and smartgrid technology.

“We are prepared to make a significant investment in Indianapolis, and we are prepared to be patient in expecting returns on this investment,” Muller said. “Unlike other companies that have in the past attempted ambitious projects in EVs and EV charging station deployment, we are backed by the Bollore Group, which is financially very strong.”

Attractive market

Indianapolis was attractive to Bollore because of political leaders’ willingness to make the service a reality and the corporate community’s embrace of it, Muller said. Although Indianapolis doesn’t have the population density of Paris, it has other factors working in favor of a successful business, including a large student population and weak public-transportation and taxi systems, Muller said.

The car-sharing service might end up on a smaller scale. Under its agreement with the city, BlueIndy committed to bring no fewer than 125 EVs with 250 charging stations at 50 locations.

BlueIndy plans to use the EV made by Bollore, the Bluecar, which is under review by the U.S. Department of Transportation. Muller described the car as similar in size to a Toyota Yaris and said it can run 150 miles on one charge, though most car-sharing trips last 30 minutes or less.

If the federal government doesn’t approve the Bluecar for use in the United States, BlueIndy will use Chevy Volts or another EV, under the city agreement.

Muller said it’s too early to determine the local pricing model, but he said the goal is to make the service affordable enough that people will ditch their own cars. In Paris, Autolib’ offers weekly, monthly and annual subscriptions with per-minute usage rates that decline as the subscription term increases. Daily subscriptions are free, and a half-hour of use costs 9 euros, or $12.44.

Mitchell Mitchell

Bollore has been working closely with Energy Systems Network, a not-for-profit that promotes electric-vehicle and smartgrid technology in Indiana, to identify and assess car-charging sites.

ESN President Paul Mitchell traveled to Paris last year to test the Autolib’ service before Ballard announced the city’s plans to work with Bollore.

“To borrow a phrase from Apple, it just worked,” Mitchell said in testimony in the IPL case. (He deferred media inquiries to Muller.) “It was easy to use, and I could see how customers in Indianapolis would want this kind of convenience.”

Mitchell said he’s driven virtually every electric vehicle and seen every type of charging station on the market today.

“What I saw in the system in Paris was certainly the most advanced networked charging infrastructure solution that I had ever encountered in the world and certainly the broadest operation of that kind of a network system.”•

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  • Mike
    Let the people who use it pay for it.
  • Taxpayer1
    Amen
    • okay then,
      Okay, then you pay for it, do not make people that will not or cannot use them pay for you! If you think it is so great pay for it.
      • enough is enough
        I am tried of paying for something I will never use. Can anyone tell me why I have to pay for someone else. With these cars my gas taxes will go up, because of less gas sold. It's not any cleaner, because of the batteries fumes and the more demand on electric power plants, (which the Feds, are making Indiana and other states closing some of them.) They use corn to fuel cars and my gas mileage goes down and my food prices go up. And now we are importing corn to the USA for the first time because we do not have enough corn. I tried of paying for other people.
      • Customers have to pay
        It always happens that if we want something we have to give something. It is a good news that new charging stations for electric vehicles are being established, but it is very bad that the residents have to pay for it. Not all are going to take the benefit of the charging stations.44 cents is much enough to pay, why id the hiking being done
      • More Taxes - When will it stop?
        Why do we have to pay for something only a few will benefit? If they want to install the charging stations, why not make the owner of these cars pay for it by putting a meter on the machine to cover and recoup the cost? I do not want to pay for this.
      • More Taxes
        RINO Mayor Marine continues finding ways to screw the Indianapolis taxpayers while feathering his campaign war chest with big bucks from his deals.
      • Stupid Liberal Idea - Take this dumb idea to the left coast
        This is a leftist political agenda item from what appears to me to be a left-leaning politician wanting Indianapolis to appeal to other lefty cities. It has nothing to do with making it easier for people to get around Indianapolis - there are easy solutions if that is your goal. Partner with Elio Motors - http://www.eliomotors.com/ - buy a fleet of AMERICAN MADE Elio GAS fueled cars (no charging stations, no rate hikes). They get 84MPG and cost $6,800 each (blue car isn't even approved by EPA yet - no way to know how much they'll sell for fully loaded with caustic battery acids).
      • I'm not paying for this
        This needs to be paid by the people that are going to benefit from it, the guest to the city and the people that live downtown. Either add it on to property taxes for the people who live downtown or increase the guest taxes. This is en expensive project that will only benefit a few.
      • 1%
        seems everyone wants a 'rate hike'. everything is going up, except for wages. so if everything costs more yet wages aren't increasing, I wonder where all the extra money is going??? oh wait, that's right...its just padding the pockets of the 1%. god our country is going to crap! no more American Dream!!! thank the rich for destroying society! greedy ******!
      • Downtown people
        If you want to get rid of your cars go right ahead we have a bike share program along with IndyGo. Case closed.
      • benefits only going to some, are we sure this is a good deal?
        If it's such a good deal and they're so committed, why is Bollore only willing to do business if IPL pays for the infrastructure upgrades? If it's such a good deal, why is IPL only willing to do it if they get to raise rates to pay for it? Why are we making ALL ratepayers pay for a service that only SOME ratepayers will use?
      • rates
        Perhaps Mayor Ballard should tackle what he perceives as problems by making them be self-supporting(i.e. cricket parks, transit, etc, sports subsidies, etc) or supported by those who are making a profit from the proposal. Raising taxes could detract from his next election, but he solves that by proposing eliminating the homestead deduction and thinks the little people won't notice. Sad to say, he's probably right. He needs to be solving our woefully understaffed police department instead of making himself look good.
      • Not Fair...
        None are Black areas, but Blacks have to pay disproportionately for it? Wow, not fair at all. So we give the Pacers money but we have to pay for this? Why not let Tesla, Ford, GM, the car owners pay for this? We have to pay or this (only help the rich who own these expensive cars) but we can't do light rail/transit (would help eveyone? Wow.
      • ParkIndy
        Shame on your Mayor Ballard for the ParkIndy deal. Many, many people knew things like this would happen when we sell off city assets to campaign contributors. Why is the IBJ the only one to report on the continues crony capitalism of this corrupt administration?
      • Dingo
        The comment by Dingo misses the mark. Most of the users of this system would be the growing population of downtown residents. I could get rid of my second car completely if there were an altenative vehicle to run short errands a couple of times per week. This system would be a boon to many residents who currently have no alternative than a personal vehicle.
        • To Dingo
          You do realize there are plenty of people that live in Indianapolis, especially Downtown, that either don't have a car or would love to get rid of their car, right?
        • Less welfare to the Pacers
          Take back part of the welfare handout to the Pacers to fund this instead of bilking workers and their families out of more money. $.44 cents may not sound like a lot, but these "small" increases ad up for people who actually budget their money and pay their own bills.
        • Chuckholes and Ballard
          If's, maybe's, IURC, rate hikes, federal grants, 16.9 million, rough estimates, Students that have money to rent cars? Electric cars in January/Febuary. I don't see any problems here.
        • Smart
          Smart move to move Indy to this program. Stupid move by Ballard to tie Indy to a 50 year lease to out of state parking meter vendor and NOW Indy must pay them for our needed parking spaces. Ballard often jumps too fast with little thought. If Indy had developed our parking meters our selves like other cities we would not be paying for the needed spaces and still kept MILLION in revenue. What does Indy need...REVENUE for critical needs.
        • wtf
          Why should residents have to bear the costs of this stupid service. And while the 44 cents may be the increased utility price (which by the way estimates are almost always understated) but you have the lost parking meters that the city has to pay the contractor for. That money has to come from somewhere. All for a stupid electric car program that residents won't use. It's for out of towners and as someone who drives downtown, out of towners are crappy drivers. Putting more of them on the road in electric cars is a recipe for disaster. The other thing is 44cents here, 30 dollars a year there (elimination of the homestead) and before you know it you're being nickel and dimed to death. I thought Indianapolis wanted people to move back to Marion County. It's not going to happen when you've got a hand out for money at every turn. These little items that nickel and dime people make the donut counties smile as it's another selling point for moving to the burbs.
        • Access
          Will any of the vehicles be wheelchair accessible?
        • No forethought
          Car sharing would be a neat thing to have, but I hope the supporters of Ballard's ill-conceived long-term lease of the city's parking meters will begin to realize what a terrible decision it was for the taxpayers. How many more tens of millions will the City have to send to ACS/Xerox for future projects that might be good for the city but result in the loss of more parking meters? From the article: The biggest cost to the city will be removing downtown parking meters, according to the testimony of Director of Enterprise Development David Rosenberg. Under a 50-year lease the city signed in 2010, the city must reimburse the meter operator, ParkIndy, for revenue it loses to meters taken out of service for special events or other city needs. The city roughly estimates its costs for the first phase of 25 car-sharing locations at $2.1 million, Rosenberg said. If BlueIndy scales up to 200 locations by June 30, 2016, as expected, the city’s cost could be $16.9 million, he said.
        • $.44 Rate Hike?!?!?!
          But that's half a Snickers bar I can't buy! Seriously, foreseeing the arguments that will happen on this article, $.44 is a negligible amount to finance what is really a rather cool proposition for the city, particularly considering the failures of mass transit. If having a viable, environmentally-friendly car share service will cost me as an IPL user less money per month than parking on a meter for a half hour one time, then it's a proposal rational citizens and consumers should embrace.

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