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Covering the transition to a clean energy economy
Wisconsin will lose out on millions of federal dollars for electric vehicle charging infrastructure if the state does not pass legislation to allow stores or other owners of EV chargers to bill drivers for the amount of electricity they get when they plug in.
Billing by the kilowatt-hour is a requirement to participate in the federal National Electric Vehicle Infrastructure (NEVI) program, which has promised Wisconsin $78.6 million and the chance to apply for a pot of $2.5 billion in competitive funding if it meets the program requirements.
The goal of NEVI is to develop charging corridors along highways, with chargers available every 50 miles.
Advocates are hoping for legislation that would make the change needed for federal funding, by enshrining in law that billing for electricity at an EV charger is allowed and would not make the owner a public utility.
The legislature takes a break from Nov. 16 to January 16, hence advocates say time is of the essence to meet the March 2024 deadline for federal funding.
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Legislation allowing billing by the kilowatt-hour was introduced in 2021 but didn’t pass. Advocates say they are expecting Republican state Sen. Howard Marklein to introduce a bill this fall. A spokesperson for Marklein’s office said they expect the bill to be circulated for co-sponsors next week.
“We have a sense of urgency we didn’t have last year,” said Francisco Sayu, director of emerging technology for RENEW Wisconsin. “That limitation on electric vehicle charging stations has slowed down the Wisconsin market. We don’t have as many EV charging providers in the state as we could.”
The Wisconsin Department of Transportation has a plan for deploying charging stations in keeping with the NEVI requirements, but the law change is needed to receive the funds.
Currently in Wisconsin, entities from municipal governments to convenience stores that host chargers can only collect a parking fee or bill for the amount of time a vehicle is plugged in.
“We may be the only state left in jeopardy of losing federal funding for EV corridors,” said Tom Content, executive director of the Citizens Utility Board of Wisconsin (CUB).
The consulting firm EVAdoption reported that in fall 2021, there were 2,251 charging stations in Illinois, 1,226 in Minnesota and 881 in Wisconsin, including level one and two and fast-charging stations. There are 15,700 electric vehicles registered in Wisconsin, compared to 66,880 in Illinois and 24,330 in Minnesota, according to the U.S. Department of Energy. Even adjusting for Illinois’ larger population, Wisconsin still lags on both fronts.
Electric vehicle advocates and owners say Wisconsin’s charging network is woefully lacking, making it harder to rely on an electric vehicle in the state.
Corey Singletary, utility analyst for CUB, testified before the Public Service Commission about a road trip he took with his family in their electric Ford 150 Lightning pickup, from Madison to Minneapolis along Interstate 94.
This heavily-traveled corridor proved difficult to traverse with an electric vehicle: at one Electrify America charging station, two out of four chargers were inoperable, there was a half-hour wait for the remaining chargers, and they delivered less power than expected. The family had a similar experience at a different charging station on the return journey.
Singletary’s testimony came in a rate case for Xcel Energy, which is seeking the commission’s permission for its subsidiary Northern States Power Company to operate two fast-charging hubs. Singletary said CUB is in favor of the move. Ideally, he said, the state needs more chargers operated both by utilities and by public and private entities.
“One of the questions is whether or not it’s appropriate for monopoly companies like the public utilities to own and operate EV charging stations,” Singletary said. “There is a concern or belief that utilities will be able to leverage their monopoly position to disadvantage other third parties.”
But since the EV charging market is so nascent, more utility participation could actually jumpstart private investment.
“If things can be provided more efficiently and effectively by a competitive provider, that’s great,” Singletary said. “But right now, there’s not really effective competition in the EV charging space, so the bar is very low. If you allow utilities like Xcel and MGE to kickstart this space and get some utility-owned chargers out there, and if they are all subject to regulation, you set a minimum bar for everyone else to clear, and that helps all consumers.”
In a rate case before the commission, MGE is proposing to change to billing by the kilowatt-hour. Utilities are allowed to bill by the kilowatt-hour without legislation but still need commission approval for changes.
MGE owns 53 EV chargers. That includes 13 DC Fast Chargers – eight of those at a fast-charging hub in downtown Madison – and 40 Level 2 chargers around the area. The utility charges $5 an hour for fast-chargers and $2 an hour for slow chargers.
In testimony before the Public Service Commission, MGE rates director Brian Pennington noted that in 2017 most chargers could deliver about 50 kilowatts, and now many deliver 350 kilowatts.
“This is a seven‐fold increase in power,” Pennington testified. “Likewise, auto manufacturers are increasingly rolling out EV models capable of charging at these higher DC currents. This equates to much more energy being transferred from the grid to the EV’s battery than was possible in previous EV models. Because the MGE public charging tariff has been based on the time spent charging instead of the energy delivered, newer and often more expensive models are able to take advantage of the existing billing structure.”
MGE spokesperson Steve Schultz said that the utility wants to make sure ratepayers who don’t have EVs are not paying unfair amounts to subsidize the utility’s investments in EV charging infrastructure. The current billing model allows vehicles to get a lot of energy for a small fee, and MGE ratepayers are picking up the slack.
“Energy-based public charging will better reflect the costs and benefits of the energy being delivered from the charger to the EV, and thereby reduce cost inequities among customers,” said Schultz.
The EV charging issue in Wisconsin has dovetailed with an ongoing larger debate related to utilities protecting their turf as the energy landscape shifts.
Wisconsin utilities have stridently opposed third-party ownership of solar installations, since — they argue — a company owning a solar installation and providing the energy to the homeowner, church, municipal agency or other entity means the developer is acting like a utility. Solar advocates have long asked the legislature, the Public Service Commission and the courts to provide clarity on the legality of third-party ownership of rooftop solar, so far to no avail.
Meanwhile a bill that would allow third-party ownership of community solar is pending in the legislature.
Utilities have similarly argued that a government or business charging by the kilowatt-hour at EV chargers means they are acting like a utility, selling electricity. That issue and the fact that charging a set fee is likely less lucrative makes it relatively unattractive for companies to develop EV chargers in the state.
“It’s a very risky proposition to come to Wisconsin and risk being labeled a public utility,” said Sayu. “If I was a private investor looking to get into EV charging, I wouldn’t want to run the risk of becoming a public utility. Basically we just want an exception for EV charging, that you can sell electricity to the public [through chargers] without being regulated as a public utility, and that’s it.”
Utilities still stand to benefit from privately-run EV chargers in their territory, since the entity running the charger ultimately needs to buy their electricity from the utility.
Previously, utilities pushed for proposed legislation to ban EV charging hubs powered by on-site renewable energy, since that could disconnect them completely from the utility. This provision was unpopular with clean energy advocates.
Sayu said that realistically an off-grid, renewable-powered EV charging station would not be a good financial proposition, and developers are unlikely to undertake such projects. Among other issues, NEVI funding requires that four vehicles be able to charge at once.
“In order to do that from an off-grid EV charging station you’d have to have a significant amount of solar or wind and a significant amount of storage,” Sayu said. “If you were to build one of those stations today attached to the grid, you’re looking at spending between $700,000 to a million dollars. If you did it off-grid, you’re looking at $50-70 million. No one would build that in a state that has less than 1% EVs.”
In other states, non-utility entities that operate charging stations generally can set their own prices.
“Companies like EVGo and Electrify America have moved away from postage stamp pricing where all rates are the same, making it more locational,” said Singletary. “There is a move in the EV charging industry to have rates more reflective of cost of providing electricity to a particular charging station.”
Such entities could theoretically charge different rates based on time of day too, to encourage charging at low-demand times, which could be seen as “economics 101,” Singletary said.
But “if you are using a DC fast charger on a road trip to Chicago or Minneapolis, you really don’t have a choice — you need to charge when you need to charge,” hence a time-of-day rate would not be an incentive.
“Now in the state of Wisconsin we don’t even have that opportunity to engage in that discussion,” Singletary said, “because everyone but public utilities is relegated to charging essentially a parking fee.”
Kari has written for the Energy News Network since January 2011. She is an author and journalist who worked for the Washington Post’s Midwest bureau from 1997 through 2009. Her work has also appeared in the New York Times, Chicago News Cooperative, Chicago Reader and other publications. Based in Chicago, Kari covers Illinois, Wisconsin and Indiana as well as environmental justice topics.
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by Kari Lydersen, Energy News Network
October 30, 2023
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