ALEXANDRIA, Va.—Electric vehicles are seen as the automobile industry’s future, but a battle is brewing in states across the U.S. over who should control the charging stations that could gradually replace fuel pumps, reports the Wall Street Journal.
From Exelon Corp. to Southern California Edison, utilities have sought regulatory approval to upgrade their infrastructure in preparation for EV charging and, in some cases, to own and operate chargers. Consumer advocates are concerned about higher electric rates, and startup companies argue that establishing charger stations should be open to private-sector competition, not controlled by monopoly utilities.
NACS believes that EV charging should be an open, competitive market. Convenience and fuel retailers should have the option to sell any legal source of transportation energy in a competitive market with a level playing field. Allowing the private sector to compete is the best way to spur investment in and the development of electric charging infrastructure. It is also the best way to ensure that vehicle owners get the best prices over the long term. With over 122,000 fueling locations, the convenience industry is the best way to fulfill the energy needs of future drivers—regardless of the energy source. All industries, whether it be a gas station, utility, technology company or other type of business, should have the same access to incentive and investment opportunities to provide consumers the widest range of choices in fueling their vehicles.
The debate is playing out in regulatory commissions nationwide as states and utilities promote wider adoption of electric autos. At stake are charging infrastructure investments expected to total more than $13 billion over the next five years, a figure that would cover roughly 3.2 million charging outlets, according to energy consulting firm Wood Mackenzie.
Calvin Butler Jr., leader of Exelon’s utilities business, said many states have become more open to the idea of utilities becoming big players in charging since EVs have struggled for acceptance. In the U.S. today, EVs make up only around 2% of new car sales, and there are less than 100,000 public chargers available. “When the utilities are engaged, there’s quicker adoption because the infrastructure is there,” he said.
Major auto makers and several states have set ambitious EV goals. Recently California announced plans to ban the sale of all new gasoline-powered cars by 2035, but a patchy network of charging stations remains a huge impediment to that goal.
As part of his plan to combat climate change, Democratic presidential candidate Joe Biden has called for building more than 500,000 new public charging outlets within a decade, but exactly how that would happen is unclear. President Trump has not proposed an EV charging plan, though he backed a 2019 transportation bill that would have provided $1 billion in grants to build alternative fueling infrastructure, including for EVs.
Charging access varies widely by state, as does utility involvement. As of September, regulators in 24 states had signed off on roughly $2.6 billion of utility investment in transportation electrification, according to Atlas Public Policy, a Washington, D.C., policy firm. More than half of that spending was authorized in California. Almost 10 years ago, California blocked utilities from owning most charging equipment, citing concerns about stifling competition. But the nation’s most populous state reversed course in 2014, seeking to spur electrification.
Utility charging investments generally are expected to raise customers’ electricity bills, at least initially. California recently approved the largest charging program by a single utility to date: a $436 million initiative by Southern California Edison. The company said it expects the program to increase the average residential customer’s bill by around 50 cents a month.
But utilities and other advocates of electrification point to studies indicating greater EV adoption could help reduce electricity rates over time by giving utilities more revenue to help upgrade their systems. Proponents of having utilities build charging networks argue utility companies can do so more quickly, which would lead to faster EV adoption and environmental improvements.
Regulators across the country have since been wrestling with similar questions, generating a patchwork of rules. “Maybe the utility should be the supplier of last resort,” said Cathy Zoi, chief executive of charging network EVgo Services LLC, which operates more than 800 charging stations in 34 states.
Groups representing oil-and-gas companies, which stand to lose market share as drivers embrace EVs, also criticize utility charging proposals.
“These utilities should not be able to use their monopoly power to use all of their customers’ resources to build investments that definitely won’t benefit everybody and may or may not be economical at this point,” said Derrick Morgan, who leads federal and regulatory affairs at the American Fuel & Petrochemical Manufacturers, a trade organization.
At the upcoming NACS Crack the Code Experience (November 4 through December 2), don’t miss the How to Succeed in the EV Market education session to hear the latest on the EV market. Make sure to register for your own Crack the Code Experience!