Shan and Sally Hays are about to do something they never thought they would: buy an electric car instead of another pickup truck.

The Gunnison, Colorado, couple says they made the decision after their electric cooperative, Gunnison County Electric Association, lent them two electric vehicles (EVs) to drive for a week. That was long enough to convince them that they could rely on an EV to get to work, pick up their three kids, and run errands—all during a snowy mountain winter.

“I would say that driving them took us from ‘that would be a neat idea’ to ‘let’s really buy one,’” says Shan, who plans to purchase the latest model Nissan Leaf. “It had a huge impact.”

Gunnison County Electric, which believes it may have been the first co-op in the country to offer an electric vehicle loaner program, is one of a growing number of electric cooperatives finding creative ways to encourage EV use by their members, to reduce pollution and reverse sagging demand for electricity, among other objectives.

At the same time, many co-ops are providing incentives to EV owners to plug in during non-peak hours to avoid overloading systems and raising electric bills for everyone as these vehicles become more common.

New Hampshire Electric Co-op in Plymouth gives rebates up to $1,000 if members buy or lease an EV. Members get an additional $300 if they install a level-2 or -3 charger and participate in an EV-specific time-of-use rate, which offers a discount for charging during off-peak hours.

Dakota Electric Association in Farmington, Minnesota, combines special off-peak rates with a chance for environmentally conscious EV owners to power their vehicles with 100 percent wind energy at no extra cost.

Cobb Electric Membership Corp. in Marietta, Georgia, offers EV owners up to 400 kWh a month free if they charge their cars during the “super off-peak” hours of midnight to 6 a.m.

Incentives have to offer “a quality of life improvement for the consumer,” says Brian Sloboda, NRECA’s director of consumer solutions.

EV outlook

EVs made up less than 2 percent of light vehicles sold in the U.S. in 2018, but sales increased 63 percent over 2017, according to the Alliance of Auto Manufacturers. As battery costs continue to fall, EVs could grow to nearly 60 percent of U.S. sales of light-duty vehicles by 2040, according to the BloombergNEF Electric Vehicle Outlook 2019.

“I’ve been in this industry over 30 years, and this is one of the few times in my career where we see an emerging load that we can get in front of,” says Mike Fosse, Dakota Electric’s vice president of member and energy services. “I don’t know if we’re going to have 500 or 50,000 EVs in our service territory, but let’s build the rate and get ready for them when they come. And with all the money the auto industry is investing in them, they’re coming.”

There are differences of opinion, though, about how fast they’re coming.

Jeffrey Connor, NRECA’s chief operating officer, says he has no quarrel with co-ops that are out front with EV programs, but he’s skeptical about how big of an impact EVs are likely to have on many co-op territories in the foreseeable future.

“I don’t know how great the scale of this technology is going to be in rural areas, especially where there is persistent poverty,” he says. “In rural communities, you don’t see a lot of new cars of any kind.”

It’s important for co-ops to plan for the possibility of a future EV boom, Connor says, “but that doesn’t mean going all the way today.”

“Let’s be prepared, but let’s be realistic and keep watching to see what happens,” he says.

Sloboda, who frequently consults with co-op leaders about EVs, says every co-op needs to decide for itself what to do.

“Right now, people are still trying things,” he says. “Over the next few years, we’ll figure out what works and what doesn’t.”

For co-ops that want to do something now, there is little risk in offering off-peak rates to consumer-members with EVs, Sloboda says. At least a dozen co-ops are already doing that, according to a January 2019 report prepared for NRECA by Xergy Consulting.

For those that want to go further, programs that help members buy level-2 smart chargers that co-ops can communicate with—and maybe control—are a possibility, he adds.

Incentives

John and Stephanie Fagnant of Lakeville, Minnesota, say they decided to buy two plug-in hybrids after Dakota Electric Association offered $500 per car for them to install chargers with submeters. The couple saves more money if they charge their vehicles during off-peak hours.

“We were the very first customers to have two meters installed and get two rebates,” says John, who, like his wife, drives a Toyota Prius plug-in. “Their incentives made buying the cars an easy sell for us.”

For co-ops that want to educate members about the benefits of EVs, nothing works better than providing a car to try out, Sloboda says.

“There aren’t a lot of car dealers in rural areas that have EVs to test drive, and you can’t really explain what it’s like to drive one until you put people in seats,” he says.

Sally Hays, the Gunnison County Electric member, says she and her husband would have had to drive nearly four hours to Denver to find a dealer with EVs to test.

“The co-op gave us the opportunity to see if we’d like it,” she says. “It was really fun how peppy it was and how quiet it was.”

While other co-ops let members drive loaner cars for a day or a weekend, Gunnison County Electric CEO Mike McBride says he felt that people needed longer to make up their minds about EVs.

“We needed to give people a real-life experience,” he says.

They recently began allowing members to take a co-op-owned Chevy Bolt home for a week and have a brand-new Tesla Model 3 for co-op business and supervised member test drives.

Car dealers with EVs are easier to find in Cobb EMC’s suburban territory, but it still took the offer of a $3,500 limited-time rebate from the co-op to nudge Beth Land of Marietta, Georgia, to buy a Nissan Leaf in December. She also was lured by the promise of free electricity for charging her car in the middle of the night.

“Those two things were absolutely the reason we decided that we could afford this car now,” she says. “My husband and I are looking to buy a house, and we want to stay in Cobb’s territory because of their progressive power programs. We like that they seem to be ahead of the game.”

Cobb CEO Peter Heintzelman says the co-op built EV offerings in anticipation of members’ expectations. Surveys and other data showed that nearly two-thirds of the co-op’s members are considering an EV purchase, he says.

“We just wanted to serve our members and help people understand that electric vehicles have gone mainstream and that Cobb EMC is prepared to facilitate their usage,” he says. “With such strong interest from our members, we have an obligation to be thought leaders.”

‘If EVs take off’

With more than 80 percent of EV drivers charging their vehicles at their homes, it makes sense for co-ops to focus efforts there rather than investing in public charging stations, Sloboda says.

“For the vast majority of Americans, you can charge at your house, go about your daily routine, and never touch a public charger,” he says.

The one exception is if a co-op’s territory includes major highways that serve national or state parks, amusement parks, zoos, or other attractions big enough to become destinations for out-of-town travelers.

“In that case, look at partnering with hotels and with the tourist destinations to install some chargers,” he says. “But doing it at the local grocery store or Walmart? No. It’s generally not worth the cost.”

Craig Snow, vice president of member services at New Hampshire Electric, says they have worked with hotels, resorts, and other commercial destinations in their area to encourage them to install public chargers. The co-op provides rebates for half the cost of the charging station installation, up to $2,500 per unit with a maximum of $5,000 per account.

“I think it’s important to support the installation of public charging in the early stages to deal with the range anxiety that people still have about going on a longer trip in an EV,” Snow says. “Having some chargers available for visitors helps ease that concern.”

Dakota Electric’s Fosse says that as the EV market grows, it’s important that members become comfortable with time-of-use rates or even direct co-op control of EV charging. Failure to do so could put major stresses on systems and drive new peaks.

“It’s pretty easy to put in place a program to shape charging,” Fosse says. “Then if EVs start coming real fast, we can have some control of this emerging load. It’s much harder to do after the fact, after it’s affecting the system.”

McBride agrees. “The biggest risk in hanging back is not setting the stage for managed charging,” he says.

“Somewhere in the near future, EVs will start to be much more commonplace,” Snow says. “You have to look at what that’s going to do to the electric grid.”

New Hampshire Electric CEO Steve Camerino says he sees EV programs as important experiments for co-ops.

“The idea is that we learn from them, see what the problems are, and make adjustments,” he says. “Then if EVs take off, we’re not caught flat-footed.”