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

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 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 hours, 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.”