California Residents May Foot Bill for Electric Cars

To lower the price of electric cars for Californians, state utilities, regulators and Detroit auto makers are proposing that all California electricity customers help pay for them as part of their monthly bills.

The idea is included in a proposal being readied for introduction in the California Legislature that is aimed at lowering the cost of electric cars by up to $5,000 on a $20,000 vehicle, with cash rebates, tax breaks and other measures.

The rationale, supporters said, is that all residents of California will enjoy the clean-air benefits from electric cars and should help foot the bill.

Such a package of incentives would be limited to perhaps 90,000 cars over a five-year period, during which the price of electric cars would presumably decline as production volume increased, enabling the vehicle to stand on its own in the marketplace.

“We’re not talking agriculture subsidies here,” said Diane Wittenberg, manager of electric transportation at Southern California Edison.

Without major subsidies, the auto industry contends, the cost of batteries alone--$5,000 to $10,000 per car based on current technology--would drive the price so high that few would buy the electric vehicles.

Under California law, auto companies doing business in the state must start phasing in “zero-pollution” cars in 1998. Only electric cars will qualify, and all producers--many suffering from a global recession in the auto business--are scrambling to bring them to market.

A group representing utilities, Detroit auto makers, the California Energy Commission and the state Public Utilities Commission has been working out a plan to introduce in the state Legislature early this year, Wittenberg said.

She said Edison supports a $1,500 cash rebate from utilities to purchasers of electric cars and state officials would offer a like amount in tax breaks. A federal tax credit is already available, she said.

Others have proposed that the cost of the batteries be made part of the rate base charged by utilities. One idea has the utilities actually owning the batteries and “loaning” them to motorists.

Though such a plan would be sharply opposed by utility ratepayer advocacy groups, the general concept of a major benefits package to would-be buyers of electric cars is backed by PUC President Daniel W. Fessler, said James Boothe, Fessler’s economic adviser.