Driving Force Behind Electric : Utilities Take on Detroit in Defending Green Rules
Even as Ford Motor Co. was delivering a fleet of polished new electric cars to utilities around the nation last week, the auto maker got in a dig about their cost.
To utility executives’ considerable irritation, Ford officials told everyone within earshot that their Ecostars--the experimental electric version of Ford’s European minivan--were being leased for $100,000 a crack. And even that, said the Ford people, didn’t come close to the expense of making them.
In their expanding campaign to overturn California’s 1998 deadline for marketing the first commercial electric cars--an effort that includes heavy-duty lobbying of officials in Sacramento, from Gov. Pete Wilson on down--the Big Three auto makers hope to use price as their most powerful lever.
Without a breakthrough in battery technology, they argue, electric cars will cost too much to be practical for ordinary consumers. And “there is not going to be any battery breakthrough,” John Wallace, Ford’s technical manager for electric cars, declared in Detroit the day before an Ecostar was delivered to Detroit Edison Co. for testing.
“It’s like old Michigan football,” Wallace said. “Three yards at a time, over and over. We’re just going to have to slog it out.”
Proponents of electric cars, however, believe that some technology has already slogged far enough. They are beginning to fight back to preserve California’s 1998 mandate, even as they try to keep public peace with the auto makers.
“We’re convinced that U.S. companies are on the leading edge of worldwide electric-vehicle technology today, and the mandate brought them there,” says John E. Bryson, chairman and chief executive of Southern California Edison Co.
On Tuesday, representatives from the five largest California utilities, several environmental groups and the budding electric-car industry met quietly in Sacramento to coordinate efforts to counter the Big Three’s campaign against the electric car.
Electric utilities could reap substantial profit from the transportation fuels market--an average of $100 to $200 a year per electric car, according to the California Electric Transportation Coalition. Given their more optimistic assessment of the state of battery technology--along with a basket of federal, state and utility incentives for buyers--the utilities contend that some electric cars are practical even now.
The natural gas utilities--promoting a more mature technology that meets the less-stringent low-emission requirements of the same California rules--are even more confident. Southern California Gas Co. expects 180,000 natural gas vehicles in its service territory by the year 2000.
Edison, Pacific Gas & Electric Co., Southern California Gas Co. and San Diego Gas & Electric Co. recently filed requests with the state Public Utilities Commission for permission to spend almost $600 million on refueling facilities and incentives to motorists to smooth the introduction of low-emission vehicles between now and 2000.
Meanwhile, various state and federal financial incentives to electric-car buyers--totaling as much as $6,275 per car--are already in place.
Regionally, the South Coast Air Quality Management District gives credits for using methanol, natural gas or electric vans to companies required to promote ride sharing. Under the district’s formula, an electric vehicle is equal to 10 conventional vehicles--a benefit that could represent from $2,000 to $5,000 per vehicle to employers in the program.
If more is needed, say proponents, utilities might choose to lease batteries--which now cost as much as $15,000 and last as little as two years--to drivers to cut the initial cost of buying electric vehicles. Edison and other utilities have even considered setting up battery service stations where leased batteries could be turned in for recharging at the cheapest, off-peak hours.
Beyond this, “fee-bate” programs like that in a bill currently languishing in the Legislature could be used. Under such programs, buyers pay an extra fee or get a rebate, depending on the pollution-emitting characteristics of the car they buy. “So if you scrap a dirty, inefficient clunker and move up to a new, cleaner model, you can get a huge rebate--maybe even enough to buy the new car,” said Amory Lovins, an energy efficiency expert.
There could be other ways to make low-emission vehicles’ air-pollution benefits pay off.
Environmental economist Hazel Henderson estimates that pollution from automobiles costs $300 billion annually. Part of that could be collected, she says, in the same manner contemplated by toll road operators--with machines that read computer chips embedded in vehicles.
“It might turn out that for a place like L.A., (the value of emission reductions) might be billions of dollars,” said Richard L. Sandor, chairman of New York-based Centre Financial Products Ltd., who designed the Chicago Board of Trade’s innovative pollution credit markets.
But the auto makers remain unconvinced. They contend that consumers in 1998 will still be faced with cars that can travel no more than 100 miles between chargings, and they want California’s deadline eased.
“Our goal today is to show the technological advancement of the Ecostar--without lending the impression that electric cars have arrived,” Dennis Wilkie, a Ford electric vehicle executive, said carefully in Santa Monica the day before one of the electric mini-vans was turned over to Edison.
Times staff writer Donald W. Nauss in Detroit contributed to this report.
Electric Car Incentives
The California Electric Transportation Coalition estimated how financial incentives for electric car purchase might work. With incentives, the utility group concluded, the GM Impact--a sporty two-seat electric car-- would cost only $3,700 more than a well-equipped 1994 Mazda Miata.
GM Impact Mazda Miata Estimated cost $30,000 $20,000 Incentives: Federal income tax credit -$3,000 State income tax credit -1,000 State sales tax credit -775 Utility rebate (proposed) -1,500 Total incentives -6,275 Net cost $23,725 $20,000
Source: California Electric Transportation Coalition.
Planning for an Electric Future On Nov. 1, the state’s four big investor-owned utilities submitted proposals to the Public Utilities Commission for spending almost $600 million in ratepayer funds to underwrite the introduction of electric and other low-emission vehicles. Emission-free vehicles--most likely electric cars--must be available in California showrooms by 1998. Low-emission vehicles--which can include cars and trucks that run on natural gas--also must be introduced over the next decade.
Spending plans, 1995-2000 (in millions of dollars):
Southern California Edison Co.
* Up to $1,500 per car to offset cost of batteries: $68.6
* Power distribution changes; at-home recharging plugs: 63.1
* Assessment of electric-car impact on utility system: 14.2
* Development of recharging, testing, storage hardware: 12.7
* Customer education; Calstart support: 10.8
* Electric cars for Edison’s fleet: 10.0
* Overhead: 10.8
Total: $190.2
Southern California Gas Co.*
* Retail fueling stations: $38.6
* Incentives for buying natural gas vehicles: 11.0
* Research and development of natural gas engines: 26.0
* Customer education: 4.0
* Vehicle purchases for Gas Co. fleet: 9.0
* Overhead: 45.4
Total: $134.0
Pacific Gas & Electric Co.
Electric vehicles:
* Incentives to buy electric cars;
charging station installation $90.0
* 576 electric vehicles for PG&E; fleet: 14.0
* Research and development;
charging station demonstrations: 16.0
* System impact studies: 8.0
Natural gas vehicles:
* 2,500 natural gas vehicles for PG&E; fleet: 49.0
* Incentives to fleet operators and fuel retailers: 24.0
* Research and development; quality assurance: 8.0
Total: $209.0
San Diego Gas & Electric
Electric vehicles:
* Battery incentives: $5.2
* Recharging equipment infrastructure: 3.7
* SDG&E; electric-vehicle fleet purchase; infrastructure: 1.0
* System impact studies: 1.8
* Marketing; distribution system upgrade: 4.3
Natural gas vehicles:
* Fueling stations: 10.0
* Marketing; environmental analysis: 6.4
* Incentives to buy vehicles and build refueling facilities: 2.6
* SDG&E; fleet purchases: 2.4
* Labor, materials to maintain 55 fueling stations: 8.1
Total: $29.4
*Covers 1994-1999
Sources: The utilities
