Project Finance Blog

Electric Vehicle Charging: Recent Developments in the United States

Posted by Benjamin Grayson

April 15, 2019

Posted in Renewable energy Blog article

State-led renewable energy mandates and calls to reduce greenhouse gas emissions are bringing increased attention to electrifying the transportation sector. State governments are actively exploring policy changes to incentivize electric vehicle (EV) usage and attract private investment. In the private sector, oil majors are making large investments in battery and EV charging companies and automobile manufacturers have begun to pledge phase-outs of their internal combustion engine vehicles. EV regulation is largely guided by state action. Below are recent developments in key states.

New York: In February 2019, Governor Cuomo announced that the state is providing $31.6 million to its six regulated utilities to build up to 1,075 fast-charging electric vehicle stations and recover costs from ratepayers over seven years. This plan is meant to pair with the state’s goal of having 800,000 zero-emission vehicles on the road by 2025.

In November 2018, the New York Power Authority (NYPA) identified 32 new public charging locations along major traffic routes and reached an agreement with the New York State Thruway to site fast chargers at 15 service areas along this proposed corridor. The majority of the stations will be located in the state’s investor-owned utility territory, which means they will be subject to demand charges based on a customer’s peak electricity usage during a billing period. Until usage of EV stations increases, a charging station owner’s ability to achieve returns above the demand charge could prove difficult. The NYPA also plans to build a 10-station high-speed charging hub at John F. Kennedy airport to service the public and rideshare drivers.

Separately in November 2018, the state’s Public Services Commission introduced a time-of-use rate for residential EV charging customers, attempting to create incentives for utilities to avoid increases in peak demand.

California: In 2018, California authorized the state’s three investor-owned utilities to recover $738 million for electric vehicle charging infrastructure. San Diego Gas & Electric adopted a $137 million rebate program for 60,000 Level 2 home-based charging stations (240V chargers similar to an electric dryer or oven) and an EV-only variable hourly energy rate. Pacific Gas and Electric adopted a $22 million program supporting 234 fast-charging stations at 52 sites and make-ready infrastructure at a minimum of 700 sites to support the electrification of at least 6,500 medium- or heavy-duty vehicles. Southern California Edison adopted a $343 million program to install the make-ready infrastructure at a minimum of 870 sites to support the electrification of at least 8,490 medium- or heavy-duty vehicles and three new time-of-use rates for commercial customers with EVs.

Vermont: In January 2019, the Vermont Public Utility Commission recommended legislation to clarify that EV charging stations should not be regulated as electric utilities and charging station owners should have freedom to set their own pricing. Such clarification would promote investment in charging infrastructure and would allow pricing on a per-kilowatt-hour basis, rather than by a per-minute or other rate that does not consider differences in vehicle types. This opens the door for different business models to be adopted and provides more certainty for private investors.

Iowa: In February 2019, the Iowa Utilities Board proposed a rule stating that electricity sold at a commercial or public station for the purpose of EV charging would not be considered furnishing electricity to the public nor the resale of electric service. However, the proposed rule also states that if the EV station receives its electricity from a rate-regulated utility, the terms and conditions of the service to the charging station would be governed by and subject to the utility’s filed tariff. It is not clear how these two conditions will work together and how much regulatory oversight charging stations will be subject to.

Pennsylvania: In February 2019, the Pennsylvania Department of Environmental Protection released an EV roadmap, with proposals that include: (i) the development of policy to encourage utility investment in transportation electrification, (ii) statewide EV sales goals, (iii) expanding the agency’s Alternative Fuel Investment Grants program, (iv) increased investment in charging stations and (v) creation of education programs to support fleet purchases and raise awareness of EVs.

Also in February 2019, the Pennsylvania Public Utilities Commission issued an order ensuring that third-party EV stations are not treated as energy resellers (i.e. subject to certain utility regulations).

Missouri: In April 2017, the Missouri Public Service Commission (MPSC) issued an order stating that it did not have jurisdiction over EV charging stations because the stations were more akin to providing a charging service rather than involved in the sale of electricity. This led to Kansas City Power & Light being unable to recover on its investment of 1,000 EV charging station installations. In 2018, an appeals court concluded that state regulators did in fact have jurisdiction. In light of the 2018 decision, the MPSC is opening up a workshop process set to begin in March 2019 where participants are tasked with examining a range of ownership models, including (i) utility-owned and operated stations, (ii) a “make ready” tariff proposal and (iii) an alternative incentive program to be evaluated and defined in future rate proceedings.

Maryland: In January 2019, the Maryland Public Service Commission authorized its regulated utilities to install a network of more than 5,000 EV charging stations, including 900 utility-owned public charging stations. The commission required utilities to develop time-of-use rates as part of the rebates for residential chargers. These rates would cost owners less to charge their vehicles during off-peak hours and help to balance the grid. To ensure that EV drivers are helping to cover the cost of the utility programs, the order also included the establishment of a “new and separate rate class” for the public stations.

New Mexico: According to state officials, legislation is expected to be signed by the governor that excludes independent EV charging companies from state utility regulations. The legislation would also require public utilities that provide infrastructure to charging stations to offer incentives to independent companies. The proposed legislation includes language that allows the state’s public regulation commission to provide for utility cost recovery if certain criteria is met. Such criteria includes whether a project improves grid efficiency, if it increases access to the use of electricity as a transportation fuel (especially for low-income consumers and those who reside in “underserved communities”), and if a project provides for private capital investments and skilled jobs in related services.


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