Utility Companies Jump Aboard the Electric Vehicle Bandwagon
Electric utility companies have been having a bit of a problem recently, and that is that, after decades of climbing demand, the industry wasn’t prepared for the impact of cheap renewable and natural gas production, combining greater efficiency, outsourcing, and on-site power generation have flattened demand.
For example, the Tennessee Valley Authority, which supplies electricity to the whole state and some areas in the surrounding states, had predicted in 2015 no need for new investment as the demand would stay flat—after three years, that prediction has been adjusted to a 13% drop in demand.
So, faced with dropping demand, what is an electric company to do? To whom can it turn?
Apparently, it can turn to electric vehicles.
Although they currently make up little of the car market, utility companies are already taking advantage of their growing popularity to partner with automakers to offer rebates and build charging infrastructure. Along similar lines, they are also supporting the federal electric vehicle tax credit, as earlier this month 36 utilities wrote to Congress to urge a removal of the cap on EV tax credits—currently, a company can offer the $7,500 credit only on the first 200,000 vehicles it sells.
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Of course, this represents some challenges as well, as Quartz reporter Michael J. Coren points out that the nation’s old infrastructure wouldn’t be able to handle a sudden, huge surge of electric vehicle ownership, at least not if plugged in at the same time. However, the industry seems to be viewing this as an inevitable problem to be overcome, particularly as demand has been falling.