Minnesota Becomes First U.S. State to Mandate Special Utility Tariffs for Electric Cars

California, Oregon, Washington State and Atlanta Georgia are all known for their pro electric car policies and incentive programs, and yesterday the northern state of Minnesota became the first nation in the U.S. to mandate a special low-cost electricity tariff exclusively for electric car drivers.

Cold Minnesotans will soon get renewable, cheap electricity to charge their cars.

Cold Minnesotans will soon get renewable, cheap electricity to charge their cars.

Signed into law yesterday by Minnesota Governor Mark Drayton, the bipartisan bill will ensure that more than 1.3 million Minnesotan households will be given access to discounted electricity tariffs to help lower the cost of electric car recharging.

Due to come into force at the start of next year, the law is similar to time-of-use tariffs popular in some countries, where electricity is sold at discount rates by utility companies to consumers at points in the day when demand is at its lowest. In the UK for example, time of use metering — the most common of which is known by the name Economy 7, lowers the price per kilowatt-hour of electricity at night time, allowing people to run electrical appliances such as dish washers, washing machines and storage heaters for much less than they would ordinarily be able to.

Time of use metering like the UK’s Economy 7 is great for charging electric cars too, since most electric cars are recharged at nighttime while their owners sleep. Since demand on the grid is traditionally low at the same time, charging electric cars at night can also help utility companies smooth out the peaks and troughs in demand.

As signed yesterday, the new law in Minnesota will require all investor-owned utility companies within the state to offer electric car tariffs to customers, reducing the cost of charging an electric car significantly. The new law comes as a direct consequence of the efforts of two co-operative utility companies in Minnesota and Dakota — Connexus and Dakota Electric — who pioneered off-peak EV refuelling rates in the state to offer tariffs equivalent to an estimated $0.57 per gallon equivalent.

Owning an electric car in Minnesota is about to become cheaper.

Owning an electric car in Minnesota is about to become cheaper.

As well as lowering the cost of charging an electric vehicle in Minnesota, the new bill seeks to better manage the state’s energy portfolio. By offering drivers cheaper times of the day to recharge, it is hoped the bill will encourage more electric car owners to wait until night time to charge their vehicles, reducing demand on the electrical grid in peak demand periods.

In addition to mandating every Minnesotan utility provides special EV tariffs, the law also mandates that investor-owned utilities provide customers with the option of zero-emissions renewable energy tariffs, making it possible for Minnesotans to buy 100% renewable electricity for the first time to charge their electric cars.

Like 100% renewable energy tariffs in the UK, this will take the form of an agreement between the utility company and the customer. For every kilowatt-hour of electricity consumed by the customer, the utility company will have to generate or import an equivalent amount of zero-emissions, renewable electricity.

Of course, there’s another reason — one we don’t think Minnesota has thought about — which makes electric cars such a good fit for the state: if Minnesota can get its residents driving plug-in cars, the daily drudgery of scraping snow and ice off the car in the state’s long, cold winter will be a thing of the past.

We think that in itself is incentive enough to drive electric, eh?

[Hat-tip: Marc Geller]


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  • D. Harrower

    Well that was a pleasant surprise!nnI’ll be honest, with the way things tend to go with government and EVs in the US, I read your headline for this topic as “We thought up a way to bilk EV owners extra money so as to help ensure nobody buys the foul things. Drill baby drill!”

  • If my calculations are right, that’s about 1.7 cents per kWh. Not too shabby! Here in Virginia, while not mandated, Dominion Power has had an EV pricing plan since 2011 but the rates are about 5.4 cents per kWh for super off-peak between 1:00am and 5:00am.nnhttps://www.dom.com/about/environment/pdf/electric-vehicle-brochure.pdf

  • RickFromMn

    As a person from a colder part of Minnesota, the Twin Cities usually is 10 to 15 degrees Fahrenheit warmer in the winter than where I live, I didn’t understand the last paragraph.nnnWhy don’t we need to scrape ice and snow off electric cars?nnnWe don’t need to scrape ice and snow off electric cars because they will be in garages? We don’t need to scrape ice and snow off electric cars because we will preheat the cabin while the electric car is still plugged in?nnnI want to own an electric car, but have two reservations keeping me from owning an electric car, at this moment.nnnI have to budget to handle the upfront cost of an electric car. nnnElectric cars still have a premium. I am hopeful, as the volume of electric cars made increases, and more companies make electric cars, the upfront cost of an electric car will decrease. I hope advances in battery technology and the Tesla gigafactory will help drive the cost of batteries lower.nnnI worry how the cold weather will affect the range of an electric car.nnnThe range wouldn’t be a problem driving around the local area.nnnA number of times a year I make a trip with a round trip distance of about 60 miles. Many electric cars can handle this distance in the summer. I don’t know how much the range of an electric car will decrease in the winter. nnnI am not a fan of plug-in hybrids or range extended vehicles.nnnOne selling point a pure electric car has for me is the maintenance cost of a pure electric car. I do not want a hybrid electric car with a gas engine and all the maintenance that goes with a gas engine.nnnI found transportevolved.com through google news. I’m not sure, if one posts a reply, I will see the reply, unless transportevolved thoughtfully forwards replies to my email address.nnnThese are my concerns, and my concerns quite possibly could be wrong. As I say, I don’t know how the cold winter will affect the range of an electric car. It’s possible some electric cars will be more adversely affected than others.