2011 Chevrolet Volt
Detroit Edison is rolling out special pricing for early buyers of plug-in electric vehicles.
State regulators gave Michigan's largest electricity provider the go-ahead Tuesday to offer a separate rate for electric vehicle owners. Detroit Edison is the first utility in Michigan to offer pricing specific to this new wave of auto technology.
The move shows utilities are beginning to address the infrastructure needs that will arise when the first electric vehicles -- including General Motors Co.'s Chevrolet Volt -- roll into dealer showrooms later this year.
Detroit Edison, the state's largest electricity provider, will start offering the special rate today as part of an experimental program that will allow it to explore different pricing models and gauge the impact of these vehicles on the power grid.
"We view -- as do a lot of people -- electric vehicles as something of the future," said Edward Falletich, manager for pricing at Detroit Edison. "What this does is let us be privy to how much power is used to charge a vehicle."
The program will require a separate meter and will be available to 2,500 residential customers. They will have two pricing options: a lower rate for charging during off-peak hours from 9-11 p.m. or a monthly flat rate of $40 per vehicle.
Detroit Edison, which is owned by DTE Energy, will pay up to $2,500 toward the cost of installing a residential charging station and the additional meter. A typical 220-volt charging station can retail for about $600, Falletich said.
While automakers and the federal government have pushed to put more electric vehicles on the nation's roads, many customers still have concerns about the lack of charging stations.
Power companies like Detroit Edison are working with automakers to address these worries. Experts predict plug-in electric vehicles will catch on as charging stations become more widely available at home and curbside.
Some automakers and industry analysts expect pure electric vehicles to account for 10 percent of the auto industry's global sales by 2020, driven by government regulations and ongoing efforts to reduce oil consumption.
Anticipating this influx, many utilities are experimenting with different pricing structures to better serve the customer and cover their own costs for needed upgrades, said Oliver Hazimeh, head of management consultant PRTM's global e-Mobility Practice in Southfield.
In California, for instance, San Diego Gas & Electric is working with Nissan Corp. to study three different pricing structures. Nissan's all-electric Leaf goes on sale later this year.
One problem for electricity providers is that upgrading the power grid to support these vehicles is going to be expensive and traditional metering won't collect enough to help recoup the costs, Hazimeh said.
"Eventually we'll see other models such as (monthly) subscriptions and bundling services," he said.
Detroit Edison worked closely with GM on developing its experimental pricing program, Falletich said. GM's much-anticipated Volt will go on sale later this year. The plug-in electric vehicle can travel 40 miles on electricity alone.
"We're seeing utility companies like DTE take a progressive step to incentivize people to drive electrically," said Rob Peterson, a GM spokesman. "They give customers more reason to go out and test-drive an electric vehicle."
Source: Detroit News
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