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Business Association Worries Power Companies Will Siphon off EV Charging Investment

Business Association Worries Power Companies Will Siphon off EV Charging Investment

While some electric vehicle advocates say charging stations in rural areas will occur organically as more rural residents adopt the new technology, others say power companies are preventing entrepreneurs from capitalizing on a business opportunity.

Julie Sutor, director of communications with the Electrification Coalition, a national advocacy group focused on advancing electric vehicle adoption, said electric vehicle (EV) adoption in rural areas and the expansion of the EV charging station network will go hand in hand.

“The deployment of the charging infrastructure in rural areas and the deployment of electric cars will take place in parallel,” Sutor said. “You’re not going to build out 100% of the charging structure that you’re ever going to need. You’re going to gradually build up that charging infrastructure, and then you’re going to see gradual, incremental, vehicle adoption.”

Once rural communities understand the cost savings that electric vehicles provide, they’ll be more likely to adopt them, she said.

According to the eGallon Calculator, an interactive website created by the U.S. Department of Energy, charging an EV is about half as expensive as fueling a gas-powered car. But that’s using March 2021 data, when the national average gas price was $2.85 per gallon. The current average price is $4.19 a gallon, according to AAA. The DoE site estimates the cost of fueling an EV translates to the equivalent of $1.16 per gallon, with prices varying with local electricity rates.

Katherine Stainken, the Electrification Coalition’s vice president of policy, said funding available in the Bipartisan Infrastructure Law (also known as the Infrastructure Investment and Jobs Act, or IIJA, before it passed), would provide funding for the charging infrastructure. But, she said, EV charging stations aren’t like gas stations, because EVs aren’t like gas-powered cars.

Owners usually recharge at home overnight and leave home with a full battery.

“A battery, at full capacity, covers the length of… the vast majority of trips that people take on a daily basis,” she said. “The vehicles that are coming out today, and that will be coming out in the next few years, definitely have the range that is capable of covering the typical daily trips of the rural driver.”

Stainken lives in Prescott, Arizona, a small metropolitan area that abuts the Phoenix area, but she said her driving experience is probably similar to someone in a more rural area. Her trips into Phoenix are about 100 miles, one way. Once in town, she said, she normally charges up while she is in meetings, then drives the same distance back home. Even without the extra charge, her EV’s range is longer than her trips to Phoenix and back.

“Driving electric is a lifestyle switch. It’s not just that you’re changing out your vehicle,” she said. “You’re not going to stop at a gas station and fill up… if you’re already starting from your home on full.”

Jay Smith, the executive director of the Charge Ahead Partnership, said charging an EV isn’t like gassing up your car either. Instead of a few minutes at the pump, EV owners are looking at 20 minutes to a couple of hours to charge their vehicles.

That’s where things get tricky.

For home chargers, plugging in an EV is like running your air conditioner – it’s a constant stream of energy that doesn’t strain the home’s electrical demand. But higher-speed chargers – ones that give a full charge in hours, if not minutes – create a surge in the demand for energy.

When demand goes up, utility companies charge owners for that surge. The extra fee means companies won’t be able to make a profit off of high-speed charging, Smith said.

Cory Gordon, director of transportation electrification with Duke Energy, said it’s not the power company decreasing profitability, but the fact that most EV drivers power their cars at home cheaply.

“Generally and especially today, a commercial entity installing an EV charger should not expect to turn a profit from the charger. Ideally, the charger should be an amenity… rather than a way to make money,” he said in an email interview with the Daily Yonder. “By installing an EV charger as a moneymaker, you’re taking a risk – this is because people can charge their EV at their own home for 12-13 cents/kW hour. If you have a charger at your business, you’re investing costs into paying for the electricity and fees for networking. You would have to surpass all of those costs by charging people enough to make money.”

Gordon said Duke Energy has made a commitment to roll EV charging stations out in rural and underserved areas.

“We are actively developing programs that customers could choose to use whether they are in rural or urban areas. These programs eliminate or reduce upfront costs, provide technical assistance, help to ensure the quality of installation, and help eliminate maintenance uncertainty,” he said.

Gordon said that Duke has said rural and underserved communities should be included in EV charging infrastructure plans and that the company has proposed programs to reach them, using federal funding through the IIJA.

Smith said his organization thinks the federal dollars should be spread to others as well.

“We believe that money should not just go to power companies,” Smith said. “We think those dollars should go to private companies as well. We’re really trying to level the playing field by making the power companies charge others the same as they charge themselves.”

Smith said Charge Ahead Partnership has put forward legislation in Georgia and Florida to force power companies to eliminate demand charges. While the legislation didn’t pass this year, the bills are the first step in helping legislators understand how EVs are charged and the EV charging infrastructure, he said.

The Electrification Coalition’s Stainken said guidance on how $7.5 billion in IIJA money can be spent is forthcoming from the U.S. Departments of Energy and Transportation’s new agency to oversee the roll out of EV charging infrastructure, the Joint Office of Energy and Transportation.

Stainken said the IIJA requires that $1.25 billion of that is to be spent in rural and underserved communities. Additionally, another $5 billion, she said, will be spent on “National Alternative Fuels Corridors” that run along major highways that could also run through rural areas.

So far, however, state and local governments, as well as other stakeholders, are waiting to see what the Joint Office determines “rural” is, she said. That guidance too, she said, is coming.

Posted on April 11, 2022 in News.
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