Governors team up with utilities to promote electric vehicles
Governors throughout the United States are engaged in a variety of projects to encourage more drivers to choose electric vehicles (EVs), according to a report released this week by the National Governors Association (NGA), including working with electric utilities to support infrastructure investments.
The report comes during the ninth annual National Drive Electric Week taking place from Sept. 14-22. Sponsored by Plug In America, Sierra Club, the Electric Auto Association, Nissan LEAF, and the Edison Electric Institute, among others, events are being held across the country to highlight the environmental and consumer benefits of EVs. And public interest is growing. More than 60 percent of prospective car buyers in the United States have some interest in EVs, according to a July survey by Consumer Reports and the Union of Concerned Scientists.
Representatives from 40 state governors’ offices, state agencies, businesses, academia and nonprofits discussed their statewide EV projects during four NGA-sponsored workshops on transportation electrification. The attendance at the workshops held between November 2018 to April 2019 shows a high degree of interest in resolving challenges that prevent EV purchases and use, the NGA reported.
The top three states with EV adoption are California (7.84 percent), Washington (4.28 percent) and Oregon (3.41 percent) but others are interested in catching up. Some of that heightened interest developed after the Volkswagen (VW) emission cheating scandal was exposed, reported NGA.
A VW settlement to states prompted many governors to target the funds for projects to advance electrification. NGA reported 35 states opted to use 15 percent of their shares of the resulting VW settlement for EV charging infrastructure investment. States also earmarked the remaining 85 percent share to fund electric vehicle incentives and purchases, reported the NGA.
That is only the start of how participants plan to address challenges to electrification. Other significant projects, according to the NGA report include:
Deciding who owns, operates and pays for the infrastructure
A systemized effort by states, municipalities, regulators, utilities, and private companies to develop infrastructure is key to resolving drivers’ EV anxieties. The number of infrastructure stakeholders makes it a complicated and expensive problem to analyze and solve.
It will cost $11 billion by 2030 to ensure charging stations are as accessible as gas stations, according to McKinsey and Co. Many would-be EV consumers don’t have the means to charge at home, where 80 percent of all charging currently occurs. As EV adoption grows, economies of scale will drive down the costs of charging operations and ownership. Finding ground-floor investors is challenging because such investments are considered risky. States report charging fees are not reliable funding sources due to factors including the current lack of use.
States have begun to address this issue with a variety of solutions. One increasingly popular one is for utilities to provide “make-ready” installations. These installations are the electrical infrastructure, such as trenching and conduits, that enables charging readiness at host sites.
Make-ready installations can also put downward pressure on electric rates because increased utility sales displace fixed charges and lower overall prices.
Massachusetts pursued make-ready efforts by working with the utilities National Grid and Eversource on charging infrastructure programs. The utilities will cover costs of “behind the meter” charging while taking on any upgrade costs to the chargers.
And they aren’t alone. In Nevada, the Public Utilities Commission allowed the utility NV Energy to own and operate charging stations and set aside $15 million for charging infrastructure.
In Michigan, the Public Service Commission approved a $10 million pilot program for Consumers Energy to provide rebates and incentives for third-party companies.
Managing the grid for benefits and impacts
A major concern is that increasing adoption of EVs will jeopardize the grid and create expensive power system ramping solutions. States are analyzing how to design utility rates to support future charging behaviors.
Examples include teaming with utilities to induce homeowners to charge their EVs during non-peak hours, also called time-of-use (TOU) rates. Such programs lessen the strain on the grid and can reduce consumers’ electric costs. The TOU programs vary and can include EV-only TOU rates, where a designed meter for EV charging is installed.
Utilities in Maryland and New Jersey are implementing these rates as pilot programs. Other utilities offer rebates or incentives for consumers to engage in TOU programs. In New York, Con Edison launched a program to reduce EV owners’ charging costs, improve grid efficiency, and increase resiliency benefits.
Improving regional coordination around infrastructure
Federal and state stakeholders are among those with vested stakes in infrastructure development. Establishing charging stations, particularly in less-traveled corridors, is critical.
Challenges include the number of stakeholders and even a federal law that prohibits commercial activity at interstate rest areas. That restriction critically impacts establishing charging stations, particularly on less-traveled corridors with few options. The Federal Highway Administration (FHWA) is working with states to designate Alternative Fuel Corridors and guide them to apply for corridor-ready or corridor-pending designations.
Some states have already taken independent action. A collaboration among California, Oregon, Washington and British Columbia, called The West Coast Electric Highway, established a network of EV fast-charging stations along major interstates and roadways.
Other programs combine public education with the adoption of EVs. Some governors have agreed to educate the public about EVs in lead-by-example programs that include electrifying fleets. One example noted by the NGA is Hawaii that earmarked more than half of its VW Settlement to electrify school buses, shuttles and public transportation. Rhode Island will use all of its settlement money for such efforts.
Those states should be able to show significant savings for those efforts. Plug-in hybrid electric vehicles cost 38 percent less to fuel and EVs cost 60 percent less to fuel than medium-sized gasoline-powered sedans, according to a report by the Edison Electric Institute (EEI). Plus, EEI reported the vehicles cost 13 percent less to maintain than midsize gasoline-powered sedans.
