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FPL Group Inc. (FPL) and Duke Energy Corp. (DUK) will replace their combined fleet of 10,000 cars and trucks with electric-powered vehicles starting next year.

The two utilities expect to spend about $600 million to convert their vehicles by 2020, the companies said in a joint statement Thursday. The announcement was made at the Clinton Global Initiative's fifth annual meeting in New York.

"We really feel it is time for our industry to put our money where our mouth is," said Christopher Bennett, FPL's executive vice president and chief strategy, policy and business process improvement officer. "We are ready to start purchasing when we see vehicles that are available and fit our needs."

FPL, based in Juno Beach, Fla., and Duke, based in Charlotte, N.C., decided to team together in order to create a "critical mass" of demand, Bennett said.

The pledge to buy alternative powered vehicles, the biggest commercial commitment to date, comes when auto makers need assurance that consumers will buy these new vehicles. General Motors Co. (GM) will introduce its electric car, the Volt, late next year.

Other companies, such as French car maker Renault SA (RNO.FR) and Japanese alliance partner Nissan Motor Co. (7201.TO) are also working to introduce electric vehicles. Renault is planning to make at least 100,000 electric cars by 2016.

Estimates on the potential market share size of the electric and plug-in vehicles vary widely. Renault's Chief Executive Carlos Ghosn, who spoke with journalists at the Frankfurt Auto Show last week, said electric vehicles will account for 10% of the global market or 60 million cars by 2020.

Oliver Wyman, a consulting firm, estimated market share at less than 4% by 2025.

"In the next 10 years, electric vehicles will be a loss-making proposition all down the value chain," Christian Kleinhans, an analyst at Oliver Wyman, said in a recent study. He also found that manufacturing costs today for electric vehicles are 150% above those of a conventional vehicle.

FPL's Bennett said both utilities will also work with bucket-truck manufacturers to test and ultimately buy vehicles in 2011 and 2012. Bucket trucks provide an in-air platform for power-line workers.

-By Jeff Bennett, Dow Jones Newswires; jeff.bennett@dowjones.com; 248-204-5542

(David Pearson in Paris contributed to this article.)