Ohio Bill Would Subsidize Utilities’ Plans for EV Charging System

NACS urges lawmakers to level the playing field for electric vehicle charging.

June 08, 2022

Rows of EV Chargers

ALEXANDRIA, Va.—Ohio legislators are seeking to pass a bill to promote the use of electric vehicles (EV) in the state by allowing power companies to charge ratepayers for the cost of building and operating new EV charging stations, reports the Cleveland Plain Dealer.

A provision within Ohio Senate Bill 307 would allow public utilities to pass along the cost of building EV charging stations to utility customers. The bill also creates a state task force to develop an EV plan, establishes a $2,000 sales tax rebate on the purchase of new electric vehicles and provides millions of dollars in grants to help auto suppliers transition from gas-powered vehicles to electric ones.

The Plain Dealer notes that the bill is aimed at promoting and expanding the use of EVs in Ohio, but handing a massive subsidy to power companies to achieve that goal has generated the most controversy. Opponents, including convenience and fuel retailers, consumer advocates and manufacturing associations, say that giving utilities such a competitive advantage will discourage outside investors and actually slow the growth of EV charging.

“EV charging should be a competitive service,” said Michael Haugh, representing the Ohio Consumers’ Counsel, in committee testimony to state lawmakers earlier this month. “Just as in the early 1900s, when privately owned gas stations started popping up to serve motorists, the competitive market will meet the needs of EV owners without forcing Ohio utility customers to subsidize it.”

The Ohio Manufacturers Association raised concern over Ohioans receiving higher power bills, stating that the bill included “no guardrails to prevent excessive increases in Ohioans’ power bills.” Only a fraction of 1% of all Ohio registered vehicles are electric, so just a tiny percentage of ratepayers would reap the benefit from this new rider.

Advocates for the bill, including unions representing utility workers, say that public utilities are uniquely positioned to build chargers throughout the state, especially in poor or remote areas where private retailers may be hesitant to invest.

“There’s going to be a gap in charging if we don’t do something to make sure we see the equitable distribution of chargers,” said Brendan Kelley, director of Drive Electric Ohio “And so that’s where utility ownership can play a helpful role in this electrification of transportation.”

The Plain Dealer pointed out that such promises from utilities have not always panned out, noting that Akron-based First Energy raked in $168 million in user fees annually for “grid modernization.” An internal audit released earlier this year revealed no evidence that the utility spent the money on its intended purpose.

The Charge Ahead Partnership, which NACS is a member, is urging lawmakers to remove the provisions within the bill that provide subsidies to public utilities so that there is a “meaningful, systemic injection of private capital toward fast, reliable EV charging stations at the places consumers want them the most.”

Federal Activity

At the federal level, in recently submitted testimony to a U.S. House energy hearing, NACS emphasized that private retailers are not asking for special treatment or for the utilities’ hands to be tied. Rather, the association is calling on lawmakers to establish fair rules for all entities.

“There are some key structural changes and assurances needed to make that case for private sector investment, including policies that encourage utilities to do the needed work to provide reliable electricity as well as rate structures that allow private sector participants to sell electricity in a competitive and price-transparent manner,” said NACS in a recent letter to the U.S. House Committee on Energy and Commerce’s hearing “Charging Forward: Securing American Manufacturing and Our EV Future.”

NACS also reminded lawmakers that public utilities will still profit from EV charging in the future, even without subsidies. A more competitive EV charging marketplace will result in more demand for electricity.

“Electricity markets will have to provide reliable, transparently-priced wholesale electricity to all EV charging site hosts,” states the letter. “This should not be controversial. It would make the charging marketplace highly competitive and EV charging investments more attractive to private businesses throughout the country.”

Georgia Legislation

Earlier this year, Georgia legislators attempted to pass legislation that would require utilities to create a subsidiary if they want to operate charging stations. These subsidiaries would be required to operate under the same rates, terms and conditions as private businesses.

“Competing with a monopoly is one of our biggest concerns,” Angela Holland, president of the Georgia Association of Convenience Stores (GACS), told a state House of Representatives committee recently.

The legislation failed, but Georgia lawmakers commissioned a joint legislative committee to study the issue, and NACS is anticipating bills addressing the issue in the 2023 session. GACS is lobbying the General Assembly to make sure that Georgia Power would pay the same rates c-store owners do for electricity.

Notably, the Georgia legislation would not have prohibited public utilities from the EV charging marketplace—it simply would have required power companies to compete under the same set of rules that a private business does.

EV Charging Coalition

NACS is a founding member of the Charge Ahead Partnership, a coalition of businesses, associations and individuals who share the same goal of creating a competitive EV charging market nationwide.

“Through this coalition, our industry will have a voice in creating a level playing field for everyone who wants to get into this emerging industry,” said Paige Anderson, NACS director of government relations. “We are able to advocate for change in the current policies and system with the goal to incentivize the private industry to invest in EV charging equipment and infrastructure.”

The Charge Ahead Partnership is free to join. By joining, members will be kept informed about this issue and will learn how they can help the cause.

“The Charge Ahead Partnership represents the businesses and entrepreneurs that are willing to risk their own money to get into the EV charging marketplace,” said Jay Smith, executive director of Charge Ahead Partnership. “Giving handouts to public utilities in Ohio not only hurts everyday people through higher power bills, it will discourage private investment in EV charging and actually slow the growth of the EV charging network.”