AES Indiana seeks to boost electric vehicle usage with incentives that could raise overall rates

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Electric vehicles account for a tiny fraction of the cars on the road today, but electric utility AES Indiana wants to boost that number by offering a raft of rebates and other incentives to customers who drive them.

The utility, known until last month as Indianapolis Power & Light Co., filed a petition Tuesday with state regulators that would set up a wide-ranging package of rebates and incentives for people who buy electricity for rechargeable vehicles.

The utility also wants permission to pass along the cost of those incentives to all of its 500,000 customers in the state in the form of higher rates in coming years, whether or not they drive an electric vehicle.

The move comes as the nation is slow to warm up to electric vehicles, which accounted for less than 2% of the nation’s 146 million new, light-duty vehicle sales between 2011 and 2019. Whether people want them or not, automakers are rolling out more and electric models in response to tougher pollution regulations and mandates to fight climate change.

Indiana sold 2,036 electric vehicles in 2018, accounting for 0.82% of all vehicles sold, according to EV Adoption, an industry blog.

AES Indiana is proposing that customers of electric vehicles who plug in during off-peak hours (generally between 10 p.m. and 9 a.m.) get a sharply lower rate for electricity. That rate would be 6 cents per kilowatt hour, a sizable discount to the standard electricity rate of 11 cents.

The utility also wants to offer rebates of up to $250 for an electric charger, which typically costs as much as $800, plus up to another $1,000 to install. It also wants to offer annual incentives of up to $150 for people who participate.

The utility says it would cost about $5.4 million to set up the program, which would cover vendor fees, customer incentives, and other costs. It wants to pass along those costs to all customers in the form of higher rates in coming years.

It’s anyone’s guess if AES Indiana will get a favorable reception from state regulators. Last year, state regulators rejected a similar proposal by Duke Energy Indiana.

Regulators said Duke Energy’s pitch was “essentially a customer-funded proposal to further a utility/company policy that is not reflected at a similar scale in the state of Indiana’s policies on energy and EV development.”

The Indiana Legislature has not adopted any statewide policy for encouraging the development of EV projects. A bill drafted this year by Rep. Ethan Manning, R-Denver, would have authorized rebates and incentives for electric vehicle pilot programs, but the legislation, House Bill 1385, died last month in committee without a vote.

AES Indiana said it hopes to boost EV usage in the Hoosier state in conjunction with Motor EV LLC, an electric car subscription service that is a subsidiary of AES Corp., the parent company of AES Indiana.

Motor EV offers monthly subscriptions on electric vehicles that range in price from $649 for a Chevrolet Bolt to $1,399 for a Tesla Model X.

The price includes use of a car, plus all insurance and maintenance costs. Customers get the vehicle delivered to their home, and they also have access to concierges who can help them find charging stations and answer questions about the vehicle.

AES rolled out the program in Indianapolis last summer, but did not say how many people have subscribed.

AES Indiana and Motor EV maintain that the right incentives could accelerate the adoption of electric vehicles, or EVs for short, in central Indiana.

“By lowering the barriers to EV adoption, such as high upfront costs, limited range and charging, AES Indiana can facilitate the reduction of transportation emissions, introduce more flexible electricity demand and cross promote other AES Indiana customer offerings such as energy efficiency, demand response, and green power,” AES Indiana said in testimony filed with the IURC.

AES Indiana said many drivers of EVs install chargers at their homes to enable faster charging. It said if its proposal is approved by the IURC, customers who participate in the “managed charging”—or off-peak charging—would be eligible for a $250 one-time rebate for the charger and would also be eligible for annual incentives ranging from $50 to $150, based on charging hours.

AES said the program would also result in higher sales of electricity, which would allow it to spread its fixed costs over higher volumes, and thus slow down future rate increases.

The Office of Utility Consumer Counselor, the state office that represents Hoosier ratepayers, has not filed any testimony indicating whether it would support the proposal.

Citizens Action Coalition of Indiana, a consumer advocate, said it was concerned about AES Indiana using its captive ratepayers to subsidize the unregulated affiliate, Motor EV LLC.

“That doesn’t smell right to us,” Kerwin Olson, the group’s executive director, said.

He added that an expensive EV subscription program remains out of reach for many people in the utility’s service territory.

“Is this really the time to ask those consumers to pony up and subsidize a program that they will likely never be able to utilize?” he asked. “We would like to see some balance, and some component to ensure that low-income communities and households will also have access to these services. We don’t see that in the proposal as filed.”

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9 thoughts on “AES Indiana seeks to boost electric vehicle usage with incentives that could raise overall rates

  1. It is interesting that IPL instituted a servce of reduced rates for eletric cars in 2012 allowing owners to charge their automobile batteries between 10 pm and 6 am at $0.034 per Killowatt hour even before the first eletric automobiles were built or were for sale without raising the rates to those who did not have or use the service. I have been using this service since December of 2012. Separate meters were installed to measure the use of this service which were turned over to the users over a year ago at no cost to them and continued the price advantage to the present time. It appears that the use of off-peak power has an advantage to the power suppliers as well as the users and it does not seem to be an additional cost to either. It is not obvious why the cost of such system necissitates increased rates for all. Eletric automobile owners already pay an additional fee for license plates to offset the reduced tax revenue for gasoline which they would have paid for if they still drove gas guzzeling cars. This seems appropriate as they drive on roads that are maintained on the gas tax revenue. Since petroleum burning vehicles are a major source of atmospheric polution it seems appropriate to promote the use of eletric vehicles but I am not sure penalizing the public for this by raising their rates for electricity is the only answer.

    Laurence B.

  2. Has anyone performed a credible analysis of the air pollution created to make the electricity to power electric vehicles (EV’s)? Wind and solar generate less than 10% of electricity in the United States, and possibly less than that in Indiana. So the balance of 90+% of electrical generation is provided by nuclear, coal and natural gas as hydro-power is negligible in Indiana. Some call EV’s “coal burners”. Has anyone performed a credible analysis of the environmental impact of creating the massive new EV battery industry needed to bring EV’s to scale? What is the life of EV batteries and how will these chemical-containing batteries be disposed of or recycled when they have no life left? What will the cost of recycling/disposal be and who will bear that cost? Why should the government or the regulated power utilities be in the business of picking the winners and losers by subsidizing technologies they believe are superior? If the economics and social will are favorable for adoption of EV’s, they will be adopted. Charging non-EV users to subsidize the EV users is typical of government over-reach that ignores economics and free markets.

    1. “Charging non-EV users to subsidize the EV users is typical of government over-reach that ignores economics and free markets.”
      1) this is AES Indiana, a Utility, not a government.
      2) IURC rejected similar from Duke because they probably agree it would be government overreach
      3) Should IURC approve this, then you can claim government overreach – but you can’t stop a utility from trying. One of the handful of proposals they submit each year are bound to get approved while the IURC isn’t paying close attention.

      Keep watch on those approving the decisions for stuff like this to happen – as they are tied directly to our inept legislature that has shown they don’t’ care too much about Hoosiers with recent legislation across the board.

  3. Why should 500,000 IPL customer be forced to subsidize a few who can afford electric vehichles. Forcing people who are subject to substandard public transportation to ‘pay for’ discounts for Tesla owners seems very misguided. If AES/IPL want to help the environment maybe they can work on shutting down coal plants.

    1. Or, you know Anne, they could lean on the House Environmental Committee Chair, Rep. Gutwein to actually hear legislation this year. Not once has his committee that he chairs, and gets an extra taxpayer stipend for, met this year to hear ANY legislation. What’s the point of having someone to lead something that doesn’t exist. How is not hearing legislation proposed by your colleagues representing the people in your district, and when you’re a Chair – the State?

      Lets have our legislators do their jobs. That would be great!

  4. “Charging non-EV users to subsidize the EV users is typical of government over-reach that ignores economics and free markets.
    1) this is AES Indiana, a Utility, not a government.”

    AES is a REGULATED utility. Thus a government agency decides if they can implement a pricing scheme to charge all customers to subsidize EV’s for those that buy them. Utilities are a monopoly. If I want to buy electricity from a competitor because I don’t like their pricing/policies, I can’t. That’s why they are regulated. What happens in practice is that utilities hire lobbyists to pitch their pricing scheme to the regulators … and if they can’t sell them, then to the legislators … to jam this deal down the throats of all rate payers. This is in the name of capitalism on the part of the utilities. They want to sell more electricity. If they can accelerate the adoption of new technology like EV’s that consume electricity, by having all their customers subsidize those purchasing EV’s, they sell more electricity and increase profits. I favor capitalism …, without regulation and government picking the winners and losers. Let the adopters of the new technology pay for what they want. If the utilities want adoption of the technology to accelerate they should invest in making EV’s more economically attractive … without making their regular rate payers pick up the tab.

  5. I am not an IPL customer and yet this angers me beyond belief. If they want to offer subsidies great but the cost of said subsidies should come from their profits. Their current customers should not have their rates raised to cover these cost. It is ridiculous.