Source: Andrew C. Hanson, Perkins Coie, September 12, 2018.
Thanks to better technology and lower costs, fuel efficient electric vehicles (EVs) are on the move in nearly every state in the country. EVs have sparked what some believe will be a transportation sector transformation. And while some states are miles ahead in planning for this new world (like California, with a goal of 1.5 million EVs on the road by 2025 and 5 million by 2030), others have just gotten behind the wheel. Those states are staking out different positions on what role utilities should play—if any—in building out the infrastructure (such as charging stations) to support the expansion of the EV market, with some states placing utilities in the driver’s seat and others putting their foot on the brakes, at least for now.
This update highlights recent state regulatory developments in addressing the role that electric utilities should play in building and owning the public infrastructure needed to support growth in the EV market.
The Fast Lane: Nevada and Washington
In May of 2018, the Nevada Public Utilities Commission (NPUC) issued an order adopting regulations intended to “incentivize consumer adoption of electric vehicles by reducing or removing range anxiety.” In addition, Nevada Governor Brian Sandoval set a goal to complete the Nevada Electric Highway by the end of 2020 and signed a Memorandum of Understanding with seven other western states to create an Intermountain West Electric Vehicle Corridor, which will make it possible to drive an EV through the region’s major transportation corridors.
NPUC’s new regulations allow the state’s only investor-owned utility, NV Energy, to own, operate and recover the cost of charging stations along the Nevada Electric Highway Corridor, and elsewhere subject to NPUC’s prudence review of costs. NPUC will approve rates for systems that NV Energy owns and operates, but not those that it owns but doesn’t operate.
In addition, the Nevada legislature excluded non-utility third parties that own and operate charging stations (such as truck stops) from the definition of “public utility” to foster competition and promote the EV infrastructure build-out.
Washington state is also moving quickly. In June of 2017, and consistent with a 2015 law incentivizing utilities to build out EV infrastructure, the Washington Utilities and Transportation Commission (WUTC) issued a policy statement that finds that “[c]harging availability and consumer awareness … are barriers that electric utilities are naturally positioned to address.” Accordingly, the policy statement allows utilities to earn an incentive rate of return on EV infrastructure. WUTC also directed utilities to offer a “portfolio” of EV charging services to maximize participation and promote competition, including fast charging on a per kWh basis; Level 2 workplace and fleet charging on a per kWh basis; residential charging station leases with direct load control and demand response; and time of use rates to manage peak demand.