Nothing will grow the EV charging network faster and more efficiently than private investment.
Americans for Affordable Clean Energy (AACE) is a group of companies who want to build the EV charging network that America needs but face several barriers that prevent them from making that investment.
In order for the EV charging network to develop in a self-sustaining and consumer centric way, these barriers to private investment must be removed. Specifically, private entities must be able to sell electricity for EV charging by the kilowatt hour (kWh) without being regulated as a public utility, know they will be competing in a fair market without utility companies having 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 retailers 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 retailers 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 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 thus giving themselves the ability to undercut their competitors.
AACE advocates for 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 for businesses to successfully offer EV charging services. Being regulated as a public utility is not tenable for any private business that merely want to offer refueling services for electric vehicles as they do gas-powered vehicles today. While the vast majority of states across the country have addressed this issue though legislation or a ruling from the state’s Public Service Commission or equivalent regulatory body, there are some states that have lagged behind.
AACE advocates for the removal of any restrictions that prevent non-utility companies from reselling electricity for EV charging.
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.
Although ready to make that investment, retailers are hesitant to do so because of the threat of unfair competition from public utility companies. Across the nation, investor-owned utilities have been taking advantage of their monopoly status over electric generation and transmission to keep private investment 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. Private retailers 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.
While our policy positions are supported by hundreds of companies and organizations from across the country, funding for AACE comes primarily from its member companies: Casey's Retail Company, Circle K, Kum & Go, Kwik Trip, Love’s Family of Companies, QuikTrip Corporation, RaceTrac, Inc. and TravelCenters of America, Inc.