- Associated Press - Monday, November 22, 2010

NEW YORK (AP) - The first mass-market electric cars go on sale next month, and the nation’s electric utilities couldn’t be more thrilled _ or worried.

Plugged into a socket, an electric car can draw as much power as a small house. The surge in demand could knock out power to a home, or even a neighborhood. That has utilities in parts of California, Texas and North Carolina scrambling to upgrade transformers and other equipment in neighborhoods where the Nissan Leaf and Chevrolet Volt are expected to be in high demand.

Not since air conditioning spread across the country in the 1950s and 1960s has the power industry faced such a growth opportunity. Last year, Americans spent $325 billion on gasoline, and utilities would love even a small piece of that market.

The main obstacles to wide-scale use of electric cars are high cost and limited range, at least until a network of charging stations is built. But utility executives fret that difficulties keeping the lights on for the first crop of buyers_and their neighbors_could slow the growth of this new niche.

“You never get a second chance to make a first impression,” says Mike Rowand, who is in charge of electric vehicle planning at Duke Energy.

Auto executives say it’s inevitable that utilities will experience some difficulties early on. “We are all going to be a lot smarter two years from now,” says Mark Perry, director of product planning for Nissan North America.

Electric cars run on big batteries that are charged by plugging into a standard wall socket or a more powerful charging station.  A combined 30,000 Nissan Leafs and Chevrolet Volts are expected to be sold over the next year. Over the next two years, Ford, Toyota and every other major automaker also plan to offer electric cars.

Governments are promoting the expensive technology as a way to reduce dependence on foreign oil, cut greenhouse gas emissions and improve air quality. Congress is offering electric car buyers a $7,500 tax credit and some states and cities provide additional subsidies that can total $8,000. The Leaf sells for $33,000 and the Volt sells for $41,000.

Electric cars produce no emissions, but the electricity they are charged with is made mostly from fossil fuels like coal and natural gas that do. Still, electric cars produce two-thirds fewer greenhouse gas emissions, on average, than a similarly sized car that runs on gasoline, according to the Natural Resources Defense Council.

Driving 10,000 miles on electricity will use about 2,500 kilowatt-hours, or 20 percent more than the average annual consumption of U.S. homes. At an average utility rate of 11 cents per kilowatt-hour, that’s $275 for a year of fuel, equivalent to about 70 cents per gallon of gasoline.

“Electric vehicles have the potential to completely transform our business,” says David Owens, executive vice president of the Edison Electric Institute, a trade group.

Nationwide, utilities have enough power plants and equipment to power hundreds of thousands of electric cars. Problems could crop up long before that many are sold, though, because of a phenomenon carmakers and utilities call “clustering.”

Electric vehicle clusters are expected in neighborhoods where:

_ Generous subsidies are offered by states and localities

_ Weather is mild, because batteries tend to perform better in warmer climates

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