Utilities are critical to facilitating growth in electric vehicles (EVs), but the utilities cannot act without the support of state public utilities commissions. This is why Clean Fuels Ohio (CFO) has begun working to educate and gain support from the Public Utilities Commission of Ohio (PUCO) for various policies and investments. These include:
Ratepayer-funded financial support to develop EV charging facilities at workplaces, certain residential areas and in publically-accessible locations;
Voluntary variable rates to encourage charging during off-peak hours;
Consumer EV education programs;
Grid modernization, including smart-EV charging investments and planning that integrate EV batteries as grid-connected resources for peak shaving, power demand regulation, and integration of renewables.
Increasingly, dozens of utilities and regulators in many state-based commissions are supporting ratepayer-funded investments in EV charging infrastructure and other market growth strategies. Well-publicized recent examples include Kansas City Power and Light and San Diego Gas and Electric, but dozens of utilities are part of this trend with significant investments or at least pilot programs focused on infrastructure incentives. Edison Electric Institute, the power sector’s main trade group, is strongly encouraging this.
So why should electricity ratepayers support investments in EV charging infrastructure when most ratepayers do not own electric vehicles? The answer is that grid-connected EVs provide a windfall for utilities and all rate-payers as long as they are charged during off-peak hours. This is because grid-connected EVs provide revenue to utilities without adding commensurate cost, since they are simply utilizing idle capacity of the transmission and distribution systems. One study conducted by Energy and Environmental Economics (E3) in March 2015 estimated net revenue to be between $2,788 to $9,799 over the lifetime of the PEV, depending on the type of PEV, how much it is used, when it is charged, and the utility rate structure. This net revenue exerts downward pressure on rates for all. However, ratepayers cannot reap financial benefits until EV adoption grows. Thus, utilities need to be able to spend revenue in a responsible, targeted way to help overcome market barriers, especially lack of sufficient charging infrastructure at multi-unit residences, workplaces and public locations.
Over the past two months, Clean Fuels Ohio (CFO) has held meetings with all PUCO commissioners to encourage the commission to support utility investments in EV charging. Commissioners, especially the new chairman, Asim Haque, have been receptive to this message. During our meeting with the chairman, he told us that no one else had met with him to discuss the role of EVs in grid modernization, and he found the ideas intriguing. He asked CFO to stay engaged and serve as the commission’s technical resource on this aspect of grid modernization efforts.
Engagement at the PUCO comes at a pivotal point. All of Ohio’s investor-owned utilities have filed, or soon will file, grid modernization plans with the PUCO. CFO’s message to all commissioners has emphasized the critical long-term role for EVs as part of grid modernization, but the need to encourage utilities to request permission for ratepayer funding for charging infrastructure support and consumer education. This will help overcome market barriers and accelerate growth of EV adoption in Ohio.