Utility electric vehicle programs come at high cost for customers, OPC analysis shows
BALTIMORE – The utility electric vehicle pilot programs have cost utility customers more than $50 million while generating just $6.4 million in revenues to offset the costs, the Office of People’s Counsel said in a report assessing the performance of utility EV pilot programs filed yesterday with the Public Service Commission. Some of those programs—including those that provide rebates for single-family homes and those allowing utilities to own public EV charging stations at utility customer expense—should be phased out, OPC said.
“The utility-owned EV charging stations are in the red, and captive utility customers are paying the consequences,” said People’s Counsel David Lapp. “It makes no sense for utility customers to subsidize utility-owned EV charging stations that operate in a competitive market. Where public EV charging stations need subsidies, the subsidies should come from taxpayer dollars—as with the National Electric Vehicle Infrastructure program and the Inflation Reduction Act—not ratepayer dollars.”
The utilities’ EV pilot programs include rebates for customers installing home charging systems, installation and ownership of public and multi-unit housing charging stations, and rate options designed to mitigate electric system impacts of EVs. The Commission initiated the EV pilot programs in 2019. They are run by Baltimore Gas and Electric, Pepco, Potomac Edison, and Delmarva Power. OPC’s analysis assesses the performance of each of the utilities’ programs through the end of 2023.
The vast majority of EV program costs—78 percent, or $39.7 million—go toward utility-ownership of public EV charging stations, OPC’s analysis shows. Yet overall those charging stations have extremely low levels of use—with utilization rates of 3 percent or less. Low utilization means that, over the course of the pilot, the utility charging stations did not serve many customers and, as a result, generated few revenues —less than $1 million. With revenues covering less than 3 percent of the costs, the public charging station program lost money, and all utility customers pay for those losses.
One of the objectives of the EV pilot program was to promote “time-of-use” pricing to encourage EV owners not to charge their car batteries at times of high demand to avoid added costs that EVs place on the electric system. But OPC found that the utilities enroll far fewer customers in time-of-use pricing than the number of rebates they provide customers for charging equipment. Moreover, the percentage of all EV owners that participate in programs to encourage off-peak charging is extremely low—5 percent or less across the five utilities with pilot programs.
“Utilities are enrolling far too few utility customers with EVs in rate programs that help to manage their consumption,” Lapp said. “Managing load from EV charging is one of the most important ways utilities should be helping the EV transition, but their performance is lacking.”
OPC’s report also pointed out that Level 1 chargers—which use a regular three-prong outlet for slow charging and do not cause major impacts on the electric system—should be considered as a means of expanding overnight charging options for multi-unit housing.
OPC also recommended that the Commission end rebate programs for single-home charging systems. Those rebates primarily benefit affluent customers, many of whom will install those systems even without customer-funded utility rebates, OPC said.
Regarding cost recovery, OPC recommended that the Commission end its practice of allowing utilities to earn profits from program administrative and operational costs, including rebates. While it may be appropriate for utilities to earn profits from EV-related capital investments—i.e., the “make ready” work on the distribution system necessary for fast charging—allowing profits on program expenses is inappropriate and adds unnecessary costs for utility customers.
On May 16, 2024, the Commission will hold a legislative-style hearing to review the EV pilot program and to consider future plans.
The Maryland Office of People’s Counsel is an independent state agency that represents Maryland’s residential consumers of electric, natural gas, telecommunications, private water and certain transportation matters before the Public Service Commission, federal regulatory agencies and the courts.
* * *
|
