Colorado VW Plan Supports Transition to Electric Vehicles

September 13, 2017 | Will Toor

The Colorado Department of Public Health and the Environment (CDPHE) has released a draft plan on how the state will allocate approximately $70 million in funding that the state will receive as part of the settlement of the VW emissions cheating scandal. The settlement funds are designed to reduce air pollution from vehicles, in order to mitigate the effects of the non-compliant, diesel-fueled Volkswagens.

During a 2016 public comment period, the public overwhelmingly told the department that the state should focus these funds on helping transition Colorado drivers to electric vehicles (EVs). The public further suggested that CDPHE  allocate the maximum amount allowed under the settlement (15 percent, or approximately or $10 million) towards EV charging infrastructure, and to use  the remainder on replacing diesel trucks and buses with electric vehicles. 

The state’s draft plan, released in September 2017, does a good job of responding to this input, and calls for making meaningful investments in electrification of Colorado’s cars, trucks and buses.  Still, there are few ways the plan could be strengthened.

The draft plan does include the full $10 million for EV charging.

Colorado already has the 6th highest EV market share in the nation, but the leading state has nearly four times the market share. Adding EV charging at workplaces, at apartments and condos, and fast charging at key destinations (like Denver International Airport and along highway corridors) is critical to enabling many more people make the switch to an electric vehicle.

The draft plan envisions 40 to 50 fast-charging stations along corridors, with incentive levels of $110,000 to $165,000 per charger. The National Renewable Energy Laboratory’s recent analysis  of Colorado’s EV charging needs found that fast-charging corridors along highways will be important to support a larger EV market in this state.  A SWEEP study conducted for the City of Denver and the Regional Air Quality Council  also examined the costs and business models for fast charging provides support for the proposed incentive levels.

The plan also envisions investments in putting community charging stations in workplaces, multifamily housing, public parking lots, and recreational destinations such as ski areas and parks.

Xcel Energy should partner with the state to leverage these funds

To make these dollars go even further, the state should partner with investor-owned electric utilities. The utilities should invest in getting electricity to the sites, allowing the state to focus VW funds on buying and installing the chargers. Since the cost of getting electricity to the charging locations is typically about half the total expense of installing a charging station, this type of partnership could double the benefit from the VW settlement money.

The partnership offers another advantage: adding EVs to the system makes the grid function more efficiently, because most EV charging happens at home and at night, when  excess capacity is available. A study by the national consulting firm MJ Bradley found that every additional EV on the road in Colorado saves other ratepayers $630 over the lifetime of the vehicle.  Since 70 percent of the EVs in Colorado are driven in areas served by Xcel Energy, the utility company  would be a natural partner

The plan also includes $18 million for alternative fuel buses for public transit agencies.

The plan allows settlement funds to be spent on buses powered either by electricity or compressed natural gas (CNG) but sets much higher incentive levels for electric buses. The proposal will pay 110 percent of the incremental cost of an electric bus plus charging equipment. In practice, this arrangement probably will work out to about $450,000 per vehicle, as is described by a sample scenario in the draft plan. For CNG vehicles, the plan would not fund fueling stations.  Electric buses save agencies much more money on fuel than CNG does, so SWEEP anticipates that virtually all of these funds will be used to buy electric buses.

Switching transit buses to electricity has multiple benefits:

  • saving transit agencies money so they can offer more service and keep more cars off the road,
  • reducing noise and pollution in highly populated areas,
  • and offering the biggest reductions in air pollution and greenhouse gas emissions.

Transit offers another area where SWEEP urges a partnership with electric utilities. While Colorado law currently bars investor-owned utilities from providing charging services, it doesn’t prohibit  utilities from investing in the infrastructure needed  for charging. Utility involvement will leverage these funds, allowing a larger number of electric bus replacements.

The plan also includes $18 million that is dedicated to alternative fuel trucks and for school buses and shuttle buses.

The plan allows CNG, propane or electric vehicles, but sets higher incentive levels for electric vehicles. A school district replacing diesel school buses could receive $200,000 for an electric bus, or $50,000 for a CNG bus. The plan also would include funding for EV charging infrastructure. Based upon the experience with incentives for electric trucks and buses in other states, we believe that these incentive levels will be high enough to spur significant adoption of electric trucks and school buses. SWEEP urges CDPHE to focus all of these funds on electrification, rather than allowing funds to be used for fossil fuel vehicles; but given the incentive levels, most vehicles funded through this program will likely be electric. We also urge CDPHE to consider shifting funds from this category to public transit if demand is higher for electrifying public transit buses.

To provide your input:

There is a public hearing from 2 p.m. to 5 p.m. on Monday, September 18 at the Colorado Department of Transportation, 4101 E Arkansas Avenue in Denver. The location is just east of Colorado Boulevard, north of the Colorado exit off Interstate 25, and near RTD bus stops.

Comments also may be submitted online to through October 13.

Will Toor serves as the Director of the Transportation Program at the Southwest Energy Efficiency Project. He previously was a Boulder County Commissioner; Mayor of Boulder, Colorado; and chairman of the Denver Regional Council of Governments. He played a strong role in the development of the Boulder community transit network, EcoPass unlimited access transit pass, ClimateSmart Loan program and EnergySmart program.