Vermont Considers Regulating Electric Car Charging

PEV include both all-electric vehicles and plug-in hybrid vehicles. Sources: PEV registrations – U.S. Department of Energy analysis of IHS Automotive data. Population – U.S. Census Bureau, Population Estimates, Annual Estimates of the Resident Population. Courtesy: U.S. Department of Energy.David Roberts

Greater availability of new and used plug-in electric vehicle (EV) models combined with purchase incentives, charging infrastructure investments and growing consumer awareness are supporting transportation electrification across the region. The advent of longer range and more affordable plug-in electric vehicles (EVs) continues to boost sales in the northeast.

Many states are struggling with reducing transportation greenhouse gas emissions and have recognized the important role electrification can play in meeting climate and energy goals when done in concert with broader transportation efficiency programs to reduce vehicle travel. As an example, the State of Vermont’s comprehensive energy plan calls for 10% renewably powered transportation, or about 50,000 EVs by 2025, growing to 90% of vehicles to meet the goal for 90% renewable energy across all energy sectors by 2050.

As EVs grow from less than 1% of registered vehicles to 10% (or more), there are unique issues many states and electric utilities are ensuring this shift brings the greatest benefits at the lowest possible cost to society. State public utility commissions have a special role in these efforts as they oversee a variety of regulatory programs affecting electric utilities and consumers.

The Vermont Public Utility Commission (VT PUC) was directed by the Vermont legislature to launch an investigation into EVs by Section 25 of Act 158 of the 2017-2018 session (https://legislature.vermont.gov/bill/status/2018/H.917). The full charge to the VT PUC on EVs covered thirteen specific areas – the seven issues listed below are potentially of greatest interest for EV owners and those seeking to advance their adoption:

1. Reducing barriers to EV charging deployment, including strategies such as time-of-use rates to reduce costs;
2. Strategies for managing the impact of EVs on the electric transmission and distribution system;
3. Electric system benefits and costs of EV charging and electric utility planning for EV charging;
4. The recommended scope of government regulatory jurisdiction over privately owned charging stations;
5. Pricing of public charging and transparency to the consumer of rates;
6. How EV users will contribute toward the cost of maintaining the State’s transportation infrastructure; and
7. Strategies to encourage EV usage at a pace necessary to achieve the goals of the State’s Comprehensive Energy Plan and its greenhouse gas reduction goals.

The VT PUC launched investigation 18-2660-INV in July 2018 in response to this charge and has held two workshops to date with another scheduled in mid-March 2019. They are required to report back to the VT Legislature by July 2019. Additional details on their deliberations is available on the VT PUC e-docket at https://epuc.vermont.gov/?q=node/64/134378 .

One of the first findings of this investigation is related to item four above – the regulatory jurisdiction of the VT PUC over privately-owned EV charging. Currently, the resale of electricity at EV charging stations is explicitly allowed only for electric utilities. This creates challenges for non-utility charging equipment owners looking to simply cover their costs since charging fees based on hourly rates or other price structures do not account for different charging of various EV options – for example an all-electric vehicle typically charges at 7 kW of power, while plug-in hybrids are about half of that. This means a plug-in hybrid receiving the same hourly rate as an all-electric is effectively paying twice as much for the same energy.

To help remedy this, the VT PUC recently issued a letter to the VT Legislature calling for a clarification in state law that their jurisdiction does not extend to EV charging stations. The exception to this would be cases where electric utilities are investing in charging infrastructure in ways that affect ratepayers collectively if a utility proposed including EV charging in their “rate base.”

Vermont legislative committees are currently considering the VT PUC jurisdictional recommendation and other issues associated with EV adoption, including Vermont Governor Phil Scott’s proposal to develop a state EV incentive program geared to low- and moderate-income Vermonters. Stay tuned to future issues of Green Energy Times for more updates on their work.

In the meantime, the VT PUC continues deliberations on other aspects of their EV investigation. Their next workshop in March will explore how EV drivers should contribute to transportation infrastructure. Shortfalls in transportation funding over the past several years are primarily due to gasoline taxes not keeping pace with increases in vehicle efficiency. EVs in Vermont also already provide registration fees and sales taxes toward transportation funding, but long-term solutions will be needed to make up for reduced gas taxes. Options for this include additional registration fees for EVs, assessing a per-kWh tax on energy used in EVs (like a per gallon gasoline tax), or possibly moving to a more wholistic approach of a road user charge based on vehicle miles traveled.

Recent research from the University of California at Davis (https://escholarship.org/uc/item/62f72449) highlights the need for careful consideration of EV user fees. Their analysis found adding fees on EV ownership could decrease EV sales by as much as 20%, which would present significant challenges as states will need to accelerate EV adoption in concert with other measures reducing vehicle travel to meet climate and energy goals.

David Roberts is the Drive Electric Vermont coordinator. He has driven an all-electric car for the past six years and says if you must drive, drive electric.