Lawmakers and regulators at both the national level and in states across the country are kickstarting their efforts for the new year. Bills are already being filed in state legislatures for the 2023 session. One issue many state and federal officials will be looking to address is lagging electric vehicle (EV) infrastructure. But with the new year comes a new opportunity to help craft policies that promote fair competition for the private sector, and a more robust nationwide charging network.
The Biden administration has already set ambitious goals for electrification, pursuing a half a million EV charging stations nationwide by 2030 despite having only a little over 50,000 currently installed. And while the federal government has allocated more than $7.5 billion to expand EV charging infrastructure, public investment and expansion alone just won't cover the estimated $15 billion it will take to reach the president's target.
In order to best bridge this rather overwhelming gap, it is imperative that the U.S. begin to eliminate the barriers that are preventing private businesses from owning and operating an EV charging station. Many in the private sector, especially small businesses, will spend upwards of $100,000 to purchase and install a fast-charging station just to find out it won't be a profitable endeavor. Thanks to demand charges levied by utility companies, every time a ratepayer's energy usage spikes the same small business that took the major financial leap to install electric vehicle chargers will likely get hit with an energy bill that puts their station in the red.
On the other hand, since utilities are not subject to their own demand charges, they are free to install stations without worrying about their operating cost. This is a clear conflict of interest that should cause concern for lawmakers looking to ensure an effective transition to EVs.
In many states, utilities have used ratepayer funds to advance an objectively inefficient EV infrastructure serving a relatively small portion of their overall customer base. In the year 2000, data shows there were around two dozen major power disruptions across the country, but similar data in 2020 shows that the number has skyrocketed to nearly 180 occurrences. With power grids growing increasingly unreliable, it begs the question of whether ratepayer funds would be better spent modernizing the broader power grid before cornering the EV charging infrastructure market through unfair competition.
The Minnesota Public Utilities Commission is currently wrestling with this exact question in response to a proposal by Xcel Energy, a utility company in the state seeking to use $170 million dollars of ratepayer funds to build 730 new fast charging stations. While new charging stations are much needed, a flood of utility-owned chargers would be impossible for private businesses to compete with.
Instead, we should follow the lead of states like Alaska that have worked to close the competitive gap by mandating revisions to the state's utility rate structures to exclude demand charges as they relate to EV charging. New Hampshire has also slashed demand charge rates in half, helping private businesses compete and driving a free market that will ultimately pave the way for the most possible charging stations in the quickest time frame.
It's imperative that lawmakers and regulators work to recognize and address impediments to the expansion of EV charging infrastructure by advocating for the revision of utility rates. Further, federal legislators should work to encourage more transparency for ratepayer funds and advocate grid modernization before EV charging infrastructure. Utilities attempting to monopolize EV charging using ratepayer funds jeopardizes what should be their priority: to provide reliable and affordable power to all of their customers. Lawmakers and regulators need to be fair to all businesses in the private sector, as these businesses are cornerstones within their communities.
Lance Klatt is executive director of the Minnesota Service Station & Convenience Store Association.
The views expressed in this article are the writer's own.
Uncommon Knowledge
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
