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NC public staff questions need for Duke Energy EV pilot program

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NC public staff questions need for Duke Energy EV pilot program

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An electric vehicle charging station at Duke Energy's Mount Holly micgrogrid and technology center in North Carolina.
Source: S&P Global Market Intelligence

With support from environmental advocates amid North Carolina's ambitious push for electric vehicle adoption, Duke Energy Corp. is expressing surprise that the public staff of the North Carolina Utilities Commission opposes its proposed EV pilot program.

Duke Energy subsidiaries Duke Energy Carolinas LLC and Duke Energy Progress LLC filed an application with the NCUC in late March seeking to establish a three-year electric transportation pilot program designed to "determine best practices for realizing significant potential benefits of increased electric transportation adoption in North Carolina."

In a related news release, Duke Energy said the proposal would result in the installation of about 2,500 new charging stations in North Carolina. Duke Energy would install and operate more than 800 public charging stations and more than 100 electric transit bus charging stations for eligible transit companies. The company also would provide rebates to qualifying residential, commercial and industrial customers.

But in a recent filing with the NCUC, the agency's public staff said it had conducted a "robust investigation" of the proposal and subsequently determined that the companies "failed to demonstrate that spending $76 million over a three-year period is necessary to learn more about serving current and future EV load."

The public staff noted that Duke Energy has conducted similar programs in North Carolina and other states. "The companies have provided no evidence demonstrating that North Carolina customers are sufficiently unique to justify another pilot program or that the results of previous or ongoing pilot projects are insufficient to meet the companies' needs," the public staff wrote.

Duke Energy, however, disagrees.

Lang Reynolds, director of electrification strategy for Duke Energy, noted in a July 9 phone interview that the company's previous EV pilot program in North Carolina was rolled out more than five years ago.

"At the time, there were just two electric vehicles on the market, the Leaf and the Volt, both of which charged at less than 5 kW of demand," Reynolds said. "There's been a lot of progress since then. There are over 40 vehicles on the market now ... and we don't have the data that we need from our customers in North Carolina to really put together the kinds of permanent programs that we feel should be enacted in the future."

Duke Energy has proposed to invest in the program because "we think ... increasing adoption of EVs can benefit all of our customers, whether or not they drive an EV," Reynolds said. The company expects up to $10 billion of net benefits to customers through the increased use of electricity in North Carolina by 2050, he added.

Customer and environmental advocates such as the Sierra Club, Southern Environmental Law Center and Southern Alliance for Clean Energy are among the stakeholders that have voiced support for the program.

Reynolds also noted that North Carolina Gov. Roy Cooper in late October 2018 signed an executive order that includes a commitment to increase the number of zero-emissions vehicles in the state to at least 80,000 by 2025.

"We have some very aggressive goals now from the governor, and there's really no way that we're going to meet that without a pretty significant investment from the utility," Reynolds said. He added that "only about 6,000 zero-emission vehicles [are] on the road in North Carolina right now."

"There's a big gap in infrastructure, especially the fast-charging infrastructure, needed to facilitate widespread adoption," Reynolds said.

Still, the public staff's filing said Duke Energy's application is "misplaced."

"To be clear, the public staff is not opposed to transportation electrification," the filing said. "However, though the companies frame their request as a 'pilot' with associated 'pilot' tariffs, the companies are essentially requesting [preapproval] of EV infrastructure investments that would be funded by customers. Absent a certification requirement, the commission generally does not preapprove utility capital investments."

The public staff also said it would expect to see the companies piloting various rate designs to evaluate their impact on customer usage and managed charging.

"There are no metrics or standards for determining whether the programs would be successful and should be replicated on a larger scale," the staff added.

Reynolds said Duke Energy is evaluating which EV charging programs are cost-effective for customers and the system overall.

"Whether that requires specific rate design or not is an open question right now," Reynolds said. "In other jurisdictions, we have seen EV specific rates. There are pros and cons to that approach, and what we have proposed in the pilot is a rebate in exchange for managed charging of residential customers." (NCUC dockets E-2, Sub 1197 and E-7, Sub 1195)