Why Texas May Be A Better Electric-Car State Than California

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2,109 views Nov 23, 2010

Stuck in traffic, by Flickr user SMercury98

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Um, what?

Houston (pictured) is known as the nation’s oil capital, and as a resident, I can’t say I disagree with that assessment. It’s also in a state where oil is still cheap compared to other parts of the country, and the same is true for electricity costs. At nearly 15,000 square miles, it’s purported to be bigger than Maryland, and is known for bad traffic and long commutes. And despite its traffic and air pollution issues, Houston has been reluctant to adopt mass transit.

But NRG president and CEO David Crane tells me the company actually believes Texas is a better market for electric vehicles than it gets credit for, which I was skeptical about after test-driving the Ford Focus Electric in Dallas. In fact, Crane says they’ve been actively talking to Nissan about allocating more of its limited-supply, all-electric Leafs to Texas, which the automaker passed over when choosing its first-launch markets. (As part of the rollout, Nissan dealerships in Texas will sell NRG’s monthly charging packages to Leaf buyers).

Keep in mind that NRG is parent to Texas-based electricity retailers, Green Mountain Energy and Reliant Energy, so it has close Texas ties. Crane says he’s interested in pursuing and developing a similar network in California — after all, NRG is in the business of selling electricity, and more electric vehicles on the road means more electricity sales for power providers. All that aside, here’s Crane’s reasoning for why Texas makes sense for an electric car network:

It’s good business

Electric-car charging, from NRG Energy

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For $10 million, Crane says they can saturate a city of six million with charging stations. The amount is a pittance for NRG, which might spend hundreds of millions of dollars building a power plant.

“We think it’s a winning proposition,” he said. The company is seeking to patent the business model, which is called eVgo. It offers charging packages at $49 to $89 (for unlimited charging), a cost that’s added to a user’s monthly electric bill and would likely amount to less than what a driver pays in monthly gas costs. It will take several thousand subscribers and years before the company sees a return on investment, but Crane is confident the model will take off.

Deregulated electricity markets

One key factor for NRG: Texas is the only deregulated electricity market in the country, making it ideal for rolling out programs like this.

“It’s easier to move more quickly when it comes to innovative technologies in the private sector than in a utility-based system,” Crane said. In California, the process will be more complicated and time-consuming, though it won’t deter NRG from pursuing opportunities there.