Who will pay for all electric car chargers? Almost everybody

Americans nationwide will likely face higher electric bills to pay for the next stage of building the nation’s electric vehicle (EV) charger, even if they don’t drive an EV.

Why is this important: The United States will need massive investment in public charging infrastructure to meet the anticipated surge in demand for electric vehicles. But such capital outlays don’t make economic sense for many companies until there are more electric vehicles on the road – which will only happen when there are more chargers.

  • This is a classic chicken-and-egg scenario that, in the short term, is likely to be resolved by regulated utilities that can pass the investment burden onto their customers for many years to come.

What is happening: Electric utilities across the country plan to build extensive electric vehicle charging networks in their service areas.

  • Minnesota-based Xcel Energy, for example, last week announcement perhaps the boldest proposal: it plans to spend $170 million on about 750 fast-charging stations in Minnesota and Wisconsin over the next four years, part of a larger $300 million initiative. dollars for electric vehicles.
  • State utility commissions must approve the plan, which would ultimately be covered by Xcel ratepayers.
  • Xcel says the plan would encourage more of its customers to buy electric vehicles by offering them a steep discount on electricity at its charging stations.
  • But for everyone else, including those who can’t afford an electric vehicle, it just means higher electric bills, since many communities only have one utility.

The big picture: Virtually every state faces difficult economic and political issues associated with the transition to electric vehicles.

  • Who will build and maintain the necessary charging stations? Who will benefit? And above all, who will pay for them?

The plot: A battle is brewing between utilities and gas stations, convenience stores and other private companies that are also trying to get into the vehicle charging game.

  • Stores and gas stations offering electric vehicle charging could find themselves competing with the same utilities they pay for the electricity that powers customers’ cars.

Yes, but: Retailers say the way they are billed for electricity puts them at a disadvantage.

  • Utilities apply what are called “power charges” based on the maximum amount of electricity commercial customers use at any time during their billing cycle.

  • So, if a single customer plugs their electric vehicle into a 150kWh fast-charging station for 30 minutes, causing an increase in electricity demand, a store will be charged at the peak demand level for the entire month. .
  • “I’m terrified of being hit with an EV demand charge,” says Raina Shoemaker, who operates a family truck stop in Lincoln, Nebraska.

The context: The long-running fight comes as the federal government prepares to begin doling out $5 billion allocated in last year’s bipartisan infrastructure bill so states can seed a network of fast-charging stations around the world. coast to coast.

  • Government guidelines say taxpayer-funded chargers should be accessible to travellers, just off the highway and have amenities such as food and toilets – much like existing gas stations and convenience stores .

What to watch: Retailers want regulators to set a fixed wholesale price for electricity to level the playing field.

And after: Private companies – not regulated utilities – will eventually own and operate most of the electric vehicle charging network because they know how to compete on things like price, service and amenities, says Mark Boyadjis, Global Chief Technology Officer at S&P Global Mobility.

  • But for now, utilities could have a head start and electricity customers will pay.

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