Why AEP's CEO won't be driving a car from Tesla Motors
The CEO of American Electric Power Company Inc. is in the market for an electric vehicle as part of a Columbus push to get local CEOs to buy EVs, but he won’t buy one from Tesla Motors Inc.
The clean-energy automaker’s ties to a solar company will keep American Electric chief Nick Akins from putting his money into a Tesla, he told Columbus Business First.
“Tesla’s a great car, but I don’t think I’m in the position to support them right now,” Akins said Thursday. “I’m looking at everything from the Chevy Volt to the BMW i8. So I gotta figure that out.”
Tesla (NASDAQ:TSLA) on Monday agreed to a $2.6 billion merger with SolarCityCorp., the biggest solar-panel installer in the U.S. Tesla CEO Elon Musk had been chairman and biggest shareholder in SolarCity before the combination accord. Musk proposed the deal in June and said vertical integration would benefit both companies.
So why would one of the nation's biggest electric utilities – AEP is a $16.5 billion business – care about an upstart car maker's ties to a solar company? Because SolarCity (NASDAQ:SCTY) is a major opponent of state utility regulators' plans to roll back so-called net metering, which wouild require power companies to purchase excess energy put into the grid by solar power users. Net metering “is essential to SolarCity’s value proposition to customers,” Utility Dive notes.
Utilities such as Columbus-based Amercian Electric (NYSE:AEP) oppose net metering, saying those customers are not paying a fair share for using the electric grid. Solar power users still use electricity from other sources when the sun doesn’t shine, so they shouldn’t get excessive credits, the utilities have maintained.
Akins described SolarCity as "vocal and antagonistic" on net metering issues, and "very aggressive."
Electric utilities are increasingly trying to enter the solar market, too, arguing large utility-scale projects are more cost-effective for power users instead of home rooftop solar set-ups.
“Tesla – their vehicle looks like a vehicle that I would own,” Akins said. “I’m waiting for somebody to have a vehicle like that that I could own.”
The Columbus Partnership, the group of Central Ohio CEOs, is launching the drive to get area executives to drive electric vehicles as part of the city’s Smart City Challenge victory. AEP and other area businesses committed a total of $90 million to be added to the $40 million Smart City grant from the U.S. Department of Transportation grant and an additional $10 million from another business source.