Bringing Private Investment to EV Charging

We are beginning to see the future: more electric vehicles on our roads, taking Americans across town and across the country. How quickly we see the rise of EVs will depend on several factors – but none more critical than access to recharging.

Nothing will grow the EV charging network faster and more efficiently than private investment.

Americans for Affordable Clean Energy (AACE) supports building an affordable EV charging network that America needs but there are several barriers that prevent it from developing.

In order for the EV charging network to develop in a self-sustaining and consumer centric way, barriers to investment must be removed. Specifically, non-utilities must be able to make electricity available to the public for EV charging by the kilowatt hour (kWh) without being regulated as a public utility, know they will not be competing with utility companies that have overwhelming advantages, and see the establishment of a fair and transparent rate for electricity for EV charging.

Creating a Consistent Electric Rate for EV Charging

How power companies today typically charge retailers for EV charging operations is a disincentive for providers to enter the EV charging market. Commercial rates, which are largely driven by high peaks in usage place a financial cost known as a "demand charge" on providers that cannot simply be passed on to the EV driver. EV fast charging stations have unique power demand requirements, as they require high levels of capacity to deliver a large amount of electricity very quickly. This dynamic makes the cost of EV charging to the public economically prohibitive, particularly in the current nascent stage of EV adoption. These demand charges can double or triple a retailer’s monthly bill, forcing them to largely absorb the cost because it would be too high to pass along to the EV driver. Further handicapping retailers is the fact that power companies do not charge themselves those same demand charges at utility-owned EV charging locations.

AACE advocates that the public benefits from a fair rate structure based on energy consumption rather than demand charges, and contends that power companies in the EV charging business should pay the same rates as retailers.

Selling Electricity for EV Charging by the Kilowatt Hour

The ability to sell electricity for EV charging without being regulated as a public utility is crucial to making EV charging services available to the public. Being regulated as a public utility is not tenable for any EV charging providers that merely want to offer refueling services for electric vehicles. Fortunately, every state across the country has now addressed this issue either through legislation or a ruling from the state’s Public Service Commission or equivalent regulatory body.

AACE advocates for the removal of any restrictions that prevent non-utility companies from making electricity for EV charging available to the public.

Ensuring a Fair and Competitive Market for EV Charging

The upfront cost of EV charging stations is significant. Just one fast charger can cost more than $100,000 to purchase, on top of costs associated with installation, operation and maintenance.

Across the nation, investor-owned utilities have been taking advantage of their monopoly status over electric generation and transmission to keep non-utility providers in the EV charging market at bay through the practice of rate basing. Rate basing allows public utilities to spread the cost of their EV charging station ownership, operation, and maintenance to all of their electric ratepayers. According to the Edison Electric Institute – the nation’s largest coalition of electric utility companies – since 2013, over $3 billion in ratepayer money has gone to subsidizing EV projects conducted by utilities. Non-utilities cannot compete on pricing when a regulated utility can open next door and pass along all of its costs its residential and commercial power customers.

AACE advocates for leveling the playing field by preventing power companies from using ratepayer funds to compete in the EV charging market. Power companies that want to provide EV charging services should do so under the same rates, terms and conditions as other EV charging retailers.