Moving plug-ins to masses

Utilities could push electric cars by purchasing hundreds

Progress Energy and other power companies are developing a plan to promote electric cars in a big way: by buying several thousand of the cars that recharge from wall outlets.

Top executives at a half-dozen power companies have been informally discussing the concept for the past six months, said Bill Johnson, chief executive for Progress Energy in Raleigh.

Most of the cars would be used in utility service fleets, but some could be made available to company employees and even to customers.

Progress could buy up to several hundred electric cars over several years, making an initial purchase when the first models become commercially available in 2010. Johnson said the idea is gaining momentum but the utilities will have to make a decision in the next several months to purchase the first-generation plug-in electric hybrids.

"It requires scale, so it it would require our whole industry's participation," Johnson said. "We have an opportunity to partner with the auto industry to jump-start a market for these cars."

By running on a combination of gasoline and electricity, plug-in hybrids can achieve fuel efficiency rating of 100 miles per gallon.

With the auto industry struggling, placing a mass order with automakers would support a new market for the dual-fuel hybrids.

The strategy would also allow two of the nation's biggest polluters -- the utility sector and auto industry -- to take steps to reduce greenhouse gas emissions. Even if some of the electricity comes from coal-burning power plants, electric cars are still cleaner than those that run on only gasoline. And about 45 percent of North Carolina's electricity comes from nuclear plants, which create zero emissions during the nuclear reaction.

"This is mostly an environmental play," Johnson said.

The move would also shake up the industrial power dynamic by shifting fuel sales from multinational oil conglomerates to regional electric utilities. By 2030, half of all new cars sold could be electric-powered, some predict.

But challenges remain. Cars that recharge at 220 volts drain as much juice as a central air conditioner. For utilities to reap the financial benefits of recharging electric cars, customers will have to be persuaded to recharge mostly at night. That will avoid the need to build costly new power plants.

Utilities collaborating

The idea for collective purchase came out of an electric-vehicle task force that Johnson co-leads for the Edison Electric Institute, the utility trade group and lobbying organization in Washington. Informal talks have included the leaders of Charlotte-based Duke Energy, as well as Wisconsin Energy, Xcel Energy, Southern California Edison and PG&E.

The utility industry comprises more than 100 utilities. The large multistate power companies have thousands of fleet vehicles, but most are specialized trucks.

Duke Energy uses only 163 passenger cars in its five-state service area, and replaces about 20 a year with new models. Duke is considering buying electric plug-ins as replacements but is not likely to accelerate plug-in auto purchases just to stimulate a market for electric cars.

"We're definitely interested in making purchases," said Mike Rowan, Duke's director of advanced customer technologies. "But we're not artificially going to buy more than what we need."

The companies already have custom-made plug-in hybrid electric cars for study. Progress owns seven converted Toyota Prius cars and plans to add two plug-in hybrid Ford Escapes. The company also uses standard hybrid SUVs that do not have plug-in capacity.

The first wave of commercial plug-in electric cars will include the Chevrolet Volt, an electric car that can recharge from a wall outlet as well as from an on-board gasoline generator. Johnson said that as more models become available, Progress could also buy plug-in hybrid pickup trucks, vans and SUVs. Progress has fewer than 100 passenger cars in its fleet, but it has 500 pickup trucks and 125 vans and SUVs.

The details of reselling the cars to the public have not been worked out, Johnson said. Power companies aren't in the business of competing with auto dealers, but they are eager to promote electric vehicles to the public.

Because the plug-in hybrids would replace aging fleet vehicles, they would not require special budgeting, he said. But the automakers would have to be able to supply models suitable for utility use, not luxury editions for consumers.

"Together, the companies can provide a ready-made market," Johnson said. "Buying by onesies and twosies, we could never reach that sort of scale."