
Electric vehicles charge using solar-generated electricity in Pittsburgh. Source: Associated Press |
In a major push to electrify transportation, U.S. utilities, carmakers and states have committed billions of dollars to expanding the nation's emerging network of electric vehicle charging stations, along with the underlying grid infrastructure needed to deliver gigawatt-hours of additional demand in coming years.
A trio of recent moves, adding roughly $1.3 billion to the burgeoning investments in EV infrastructure, highlighted some of the opportunities and challenges of transportation electrification beyond simply providing a boost to utilities' slowed power sales.
In California, regulators on May 31 approved $738 million for Edison International's Southern California Edison Co., PG&E Corp. subsidiary Pacific Gas and Electric Co. and Sempra Energy's San Diego Gas & Electric Co. to install vehicle chargers to serve 15,000 medium- and heavy-duty electric vehicles, introduce hundreds of new fast chargers and offer incentives for up to 60,000 home chargers.
In approving the programs, together touted as the largest such U.S. utility investment to date, members of the California Public Utilities Commission noted the importance of leveraging the grid to reduce greenhouse gas emissions from the transportation sector, the state's largest emissions source, while also cutting local air pollution in communities that suffer from some of the worst air quality in the country. A quarter of PG&E's and SDG&E's investments, and 40% of SoCalEd's, must target areas designated by the state as "disadvantaged communities."
Also on May 31, New York Gov. Andrew Cuomo announced a $250 million investment into new EV charging infrastructure through state-owned utility New York Power Authority. The plan, called Evolve NY, calls for at least 10,000 charging stations to be installed by 2021. Additional private investment, Cuomo's office noted, would come from Electrify America LLC, a subsidiary of Volkswagen AG that is in the starting phase of a nationwide $2 billion investment to expand access to electric vehicle charging.
That same day, Public Service Enterprise Group Inc. said it will spend $300 million on "smart" electric vehicle infrastructure in New Jersey as part of a larger grid investment plan.

California, New York and New Jersey are part of an accelerating national trend toward electrifying transportation. In the first quarter of 2018 alone, there were 275 legislative and regulatory actions on electric vehicles and charging, a recent report from the North Carolina Clean Energy Technology Center found. That was more activity than in all of 2017.
Other states advancing regulations, incentives, deployments, rate designs and other actions aimed at driving deployments of EV chargers include Maryland, where the Public Service Commission is considering a $104.7 million proposal to install 24,000 EV chargers. In Pennsylvania, regulators are clarifying rules that limit utilities' resale of power to ease development of charging stations. All but eight states took some form of legislative or regulatory action on EVs and charging in the first quarter, the report showed.
Charging challenges
Critical challenges have also emerged, though. Among them is the question of whether utilities should be able to own electric vehicle charging infrastructure, which is proving to be "one of the most contentious issues related to electric vehicles," the NC Clean Energy Technology Center report said.
In California, where officials have approved nearly $1 billion in ratepayer-backed EV-charging investments over the past three years and where Gov. Jerry Brown has proposed an additional $2.5 billion program, a mixed ownership model is emerging. Customers participating in SoCalEd's and PG&E's programs focused on charging for midsized and heavy-duty vehicles can choose their preferred ownership model, while regulators denied SDG&E the option to own behind-the-meter infrastructure for its home charging program. "The need to electrify is so great that it cannot be done by the utilities alone," CPUC Commissioner Carla Peterman said.
In Nevada, regulators in May overruled a customer protection agency by allowing Berkshire Hathaway Energy's NV Energy Inc. to own and operate EV charging stations. In late 2017, some of the largest utilities in the country formed a new trade group, the Alliance for Transportation Electrification, to promote utility ownership of charging infrastructure.
Another challenge is determining how much such programs actually cost. In a meeting shortly before California regulators approved the utility programs, SoCalEd conceded it had overestimated the cost of its initiative by around $142 million. "This is an egregious error," Peterman said. "This is also a learning moment for all of us and a reminder that reasonable cost for these types of infrastructure can vary and it's hard to pin down what it really is."
To address challenges related to charging station economics, greater interest is emerging in projects that deploy battery storage at EV charging stations. Doing so can help to reduce the cost of peak usage rates, also known as demand charges, that utilities typically apply to commercial and industrial customers, McKinsey & Co. noted in a recent report. SDG&E plans to pilot the concept in California, while demonstrations are also proposed in Maryland.
"States are testing out a variety of strategies to build strong electric vehicle markets and charging networks," said Brian Lips, senior policy project manager at the NC Clean Energy Technology Center.
In the past, predictions for a surge in EV sales have proven to be premature. Now, though, with states and utilities backing a broad-based charging network, those visions could prove more accurate. Bloomberg New Energy Finance forecasts that, by 2030, EVs will account for 34% of U.S. light-duty vehicle sales, up from only around 1% in 2017.
