Tech Q of the Week: Role of Electric Utilities in Owning Charging Equipment?
Information provided by Technical Response Team (May 2022)
Which states allow electric utilities to own electric vehicle (EV) charging equipment? What is the role of electric utilities in owning EV charging equipment?
Please see the Alternative Fuels Data Center (AFDC) Examples of Utility-Related Laws and Incentives webpage for a summary of utility programs that promote and incentivize EVs and EV charging infrastructure and for multiple examples of utility EV programs. Some state legislatures pass mandates that require utilities to begin incentive or pilot programs. Similarly, state governors may issue executive orders that require utilities or commissions to begin a program. Typically, these mandates support a state goal related to zero emission vehicle deployment, EV charging infrastructure, or greenhouse gas emissions reductions. Utilities must still get commission approval for new rates, rebates, grants, and programs even though the state legislature or governor mandated the program(s).
- Utah is one state that has directed programs with utility-owned EV charging stations:
- House Bill 296, 2020, and Utah Code 54-4-41 authorize the Utah Public Service Commission (PSC) to establish a large-scale EVSE program with utility-owned EVSE, EVSE rate structures, and public education. This bill stimulates utility filings with the Utah PSC, but the bill alone does not require that utilities submit filings. Instead, Utah’s legislature requires that the commission make funding available for EVSE programs. Whether utilities will be required to submit a filing rests on whether the PSC requires utilities in its jurisdiction to file for the program or not.
Colorado has also authorized utility-owned EV charging stations:
- Public Electric Utility Services Authorization
- Public electric utilities may provide electricity to charge EVs as unregulated or regulated services and may recover the costs of distribution system and infrastructure investments to accommodate EV charging. The Colorado Public Utilities Commission (Commission) should consider revenues from charging EVs in the utilities service territory in evaluating the retail rate impact from the development of EVSE, which cannot exceed 0.005% of the total annual revenue requirements of the utility.
- Public electric utilities are required to file an application with the Commission for widespread transportation electrification programs every three years. Programs may include investments or incentives to facilitate the deployment of customer- or utility-owned EVSE and associated electrical equipment, facilitate electrification of public transit and other vehicle fleets, rate designs or programs that encourage EV charging, and customer education, outreach, and incentive programs that increase awareness of transportation electrification.(Reference Colorado Revised Statutes 40-1-103.3, 40-3-116, and 40-5-107)
Other states that allow utility-owned EV charging stations include Nevada, Kentucky, Florida, and Arizona.
The U.S. Department of Transportation’s Rural EV Toolkit provides an overview of the importance of electric utilities in developing EVSE:
“Electric utilities are responsible for the delivery of electricity to homes and businesses, including metering, billing, and customer service. Accordingly, utilities play an essential part in the rollout of EV charging infrastructure, and they are among the first partners that should be considered for EVSE installations.
Utilities have a strong interest in the deployment of EVSE, and they have been investing heavily in both the deployment of EVs and the rollout of charging infrastructure. In the first seven months of 2020, State regulators approved more than $760 million in proposed utility investments in transportation electrification. The majority of these programs involve either direct utility ownership of EVSE installations or “make-ready” programs in which utilities pay for necessary site upgrades.”
Further, see the Rural EV Toolkit webpage on Project Development and Scoping, which provides an overview of different ownership models and the different levels of ownership a utility may have of an EV charging site. In particular, see the section and graphic underneath the Decide on Ownership Model. The EVSE Only and Full Ownership models are two models where the utility owns the EVSE. The Rural Toolkit also acknowledges that state regulations may impact how utilities own and manage EV charging infrastructure. These regulations vary widely and therefore pose different considerations for potential business models and arrangements among site hosts, electric utilities, and charging station network operators.
Regarding full ownership models, the following excerpt from the Avista Transportation Electrification Plan describes why the electric utility chose the ownership models in their EVSE pilot program:
“Avista chose the “EVSE only” and “full ownership” models for the EVSE pilot as an alternative to other, more common utility EVSE rebate and “make-ready” programs. It was felt that by utilizing existing supply panels and other supply infrastructure owned by the customer in residential and commercial locations in the “EVSE only” model, costs could be much lower than comparable “make ready” installations with new dedicated services and infrastructure. Further, it seemed possible that utility EVSE ownership and maintenance might be an effective way to provide the most value and satisfaction for customers in terms of reducing the costs, risks and difficulties of installing EVSE, while providing a means for effective load management, without the need for further incentives or a time-of-use (TOU) rate to shift peak loads. Due to the more substantial investments and effort to implement DC fast charging sites and maintain them, the full utility ownership model was chosen to ensure long-term DC fast charging operability and public access.“
Finally, electric utilities are highly engaged in the development of EV charging. More than 60 electric utilities make up the National Electric Highway Coalition (NEHC), which is a collaboration among electric utilities committing to create a network of direct current (DC) fast charging stations connecting major highway systems in the United States. The coalition member companies serve more than 120 million U.S. electric customers in 48 states. NEHC utility members agree to ensure efficient and effective fast charging deployment plans that enable long distance EV travel, avoiding duplication among coalition utilities, and complement existing corridor DC fast charging sites. A full list of NEHC members is available on their fact sheet.