The EV Transition Is a Challenging Journey, but State PUCs Are Taking the First Steps
RAP’s recent publication, Taking First Steps: Insights for State Utility Commissions Preparing for Electric Transportation starts with the observation that “while no one state agency has clear responsibility for it, utility commissions are taking their first steps toward understanding and developing the electric transportation sector in their state.”
Several readers have told me that they agree with this, but ask, “What’s with all the baby turtles?”
Maybe I should start by trying to answer that question. The way I see it is that just like young turtles taking their first steps, public utility commissions (PUCs) across the country are the picture of determination as they take on the demands of transforming their state’s transportation sector. Exposed and vulnerable, young turtles face obstacles as they make their way down the beach to their goal, the waiting surf. PUCs likewise are assailed from all sides by both familiar and new stakeholders promoting their respective views of how the transportation sector should develop, and who should pay for it. And from the examples we have seen of PUCs working on electric transportation policy and practices, it is clear that they too are focused and engaged in an effort to reach their goal, securing the public interest as they help develop this new sector of their economy.
State commissions are learning helpful lessons as they expand their focus to include transportation electrification. States, with the help of stakeholders and utilities, are developing solutions and securing beneficial electrification opportunities that promote the public good.
Many states recognize the importance of managing EV charging and its value for grid operations. Because of that flexibility, systems can serve this new load at cleaner and less expensive times of the day. Commissions have also been working to ensure that these benefits get to ratepayers as economically as possible.
In May 2018, the Minnesota Public Utilities Commission approved Xcel Energy’s Residential EV Subscription Pilot, which supplemented an existing off-peak rate for EVs that required customers to pay for a second meter. Due to concern over low participation, a coalition of advocates — including Fresh Energy, the North Star Chapter of the Sierra Club and the Minnesota Center for Environmental Advocacy — argued for a modification to the program that would allow for a significantly lower-cost arrangement using a wireless-capable charge point and a customer’s home wireless network.
The company agreed to the modification and the commission approved it, allowing customers to avoid the need for a second utility-grade meter, reportedly an outlay of over $2,000. Xcel also reports that 96% of the charging occurring under that pilot has been off-peak, suggesting that the pricing signals are effective. Further, the pilot has been so successful that Xcel has filed to make it a permanent offering open to all customers.
The Michigan Public Service Commission authorized a comparable change to an Indiana Michigan Power Co. residential charging tariff. Reaching a similar conclusion as the Minnesota commission did in the Xcel residential pilot case, the Michigan commission approved an arrangement where the customer is charged for its full residential load as measured by the primary meter, then by a separate and lower-cost submeter to reflect the application of the time-differentiated rates under the company’s EV charging tariff.
These examples illustrate several important points for states taking first steps. First, while EV adoption faces a number of barriers, the requirement to buy two revenue-grade meters can be taken off that list. Second, and the most valuable, within a context of PUC oversight and stakeholder cooperation, utilities can initiate pilots, improve upon their initial ideas and model the outlines of a permanent utility programs that can ensure the public good.
In blog posts over the coming months, we’ll tell more stories like these, as we further explore how various stakeholders are moving the EV transition forward.