RTD’s electric 16th Street Mall buses cost nearly 60% more to operate than diesel coaches
Transit agency says “demand charge” levied by Xcel Energy on electricity costs is to blame
It’s a price disparity that could slow the transit agency’s embrace of zero-emission technology at a time when the state’s new Democratic governor is pushing to put more electric cars on the road and air quality and climate change have become ever larger topics of conversation in Colorado.
“If we want to at some point roll out a larger fleet of electric vehicles, we have to address the high cost of electricity,” said RTD spokeswoman Laurie Huff .
In a memo issued in late April to the Regional Transportation District’s board of directors that was obtained by The Denver Post, RTD general manager Dave Genova told the board that “average fuel cost” for the battery-powered MallRide shuttle buses is 73 cents per mile.
By contrast, the cost to fuel a “typical 40-foot transit coach” on RTD’s system is 46 cents per mile.
RJ Sangosti, The Denver Post
Electric buses move riders down the 16th Street Mall in Denver on May 13, 2019. RTD pays nearly twice as much per mile to power its electric buses as it does its conventional diesel fleet.
Genova pointed at the “demand charge” levied by Xcel Energy as the culprit for the higher cost of running the mall buses, which last year carried nearly 9.5 million passengers up and down 16th Street in downtown Denver.
RTD replaced its fleet of compressed natural gas MallRide buses with 36 battery-powered buses in 2017.
“Due to existing demand charges, we are paying higher than anticipated costs for charging the shuttles,” Genova wrote to the board.
A demand charge is a price tier that electric utilities typically add to commercial and industrial customers’ bills to recover the utility’s capital costs of building a system that can provide enough power to meet peak demand whenever needed.
In RTD’s case, the demand charge it pays is based on the mall fleet’s monthly peak electrical usage. In 2018, RTD paid $328,150 in “16th Street Mall-specific electricity bills.” More than $269,000 of that total — or 82 percent — is attributable to demand charges, the agency said.
Xcel spokesman Mark Stutz said the utility has to be ready to meet surges in demand and that means building and maintaining a robust system and grid that won’t fall short of customer needs at any time.
“We have to have that generation when the spike occurs,” he said. “There’s a cost associated with that.”
But Stutz said Xcel is working on finding a way to alleviate the burden of demand charges as it applies to electric vehicles. The utility is planning to file a rate case with the Colorado Public Utilities Commission in the coming weeks to address the issue.
“We’re looking at it — we’re sympathetic to the customer,” he said. “It’s an issue that needs to be addressed.”
He wouldn’t provide details about what Xcel might include in its filing with the PUC.
Xcel wouldn’t be the first utility to adjust rates for electric vehicle fleets. According to the Natural Resources Defense Council, two large utilities in California — Southern California Edison and Pacific Gas and Electric — “have developed an innovative suite of rates designed specifically for commercial EV charging.”
“We hope Xcel will do something similar for commercial EV charging in Colorado, to help RTD and transit fleets all across the state capture the benefits of electrification and deliver better service at lower cost for their constituents,” said Travis Madsen, transportation project director for the Southwest Energy Efficiency Project.
Madsen said he was surprised by the difference RTD is paying to power electric buses versus diesel buses.
“There’s no way I would expect any transit agency would find it more expensive to fuel an electric bus,” he said. “There are ways to set these systems up to save RTD and their customers money.”
That includes charging buses at night, when electric rates are lowest, and not charging all 36 buses simultaneously.
RTD’s Huff said that is exactly what the agency does, using 32 charging stations to juice the buses’ batteries between the hours of 7 p.m. and 5 a.m. And the charging is staggered so that not all the buses are plugged in at the same time, she said.
RTD’s struggles with electric power pricing for its MallRide shuttles comes as multiple efforts are afoot to give electric vehicles in Colorado a boost. In January, Gov. Jared Polis issued an executive order that directed the state to create a multi-agency team to develop the infrastructure needed to support more electric vehicles.
RJ Sangosti, The Denver Post
Riders board an electric bus along the 16th Street Mall in downtown Denver on May 13, 2019.
The order also called for a portion of the $68.7 million Colorado was awarded in a settlement with Volkswagen over the company’s emissions-cheating scheme to be put toward electrifying the state’s vehicle fleet and funding the installation of 33 high-speed charging stations in the state.
It’s all part of the Colorado Electric Vehicle Plan, which launched under Polis’ predecessor, John Hickenlooper. Its stated goal is to have nearly 1 million electric vehicles in the state by 2030, which could reduce smog-forming pollutants by several hundred tons and greenhouse gases by up to 3 million tons.
At the legislative level, lawmakers passed Senate Bill 77 earlier this month, which would allow investor-owned utilities — like Xcel — to own and operate charging stations as part of their regulated services. The legislature also passed House Bill 1159, which would extend Colorado’s tax credits for electric vehicles.
Both bills await Polis’ signature.
RTD board member Natalie Menten said it’s important the taxpayer-funded agency gets answers soon on why it is spending so much more charging its electric bus fleet than fueling its diesel buses.
“Any customer is going to look at it and ask if this is where we want to invest our hard-earned money and if it’s the best use of that money,” she said.
Huff said RTD’s MallRide buses are part of one of the largest electric bus fleets in the country. The technology, she said, is relatively new for vehicles as large as the ones traversing the mall every day. It’s important to remember, she said, that cost is not the only consideration when adopting a new technology that spares people and the environment exposure to emissions.
“There is a fine line we walk between fiscal responsibility and environmental responsibility,” she said.