Seven Steps for Utility Regulators to Take in Preparation for Electric Vehicle Surge

‘EVs 101’ issue brief describes regulatory measures that will help states accommodate a boom in electric vehicles, capturing benefits for the power system and economy

WASHINGTON, D.C., September 20, 2018 — Today, Advanced Energy Economy (AEE) released an issue brief outlining seven steps state regulators should take to prepare for a surge in electric vehicles. In EVs 101: A Regulatory Plan for America’s Electric Transportation Future, AEE notes that plug-in electric vehicles (EVs) currently account for a small share of vehicle sales, but a high – and accelerating – growth rate is putting EVs on the agendas of public utility commissions (PUCs) around the country. To address the potentially rapid electrification of the vehicle fleet – from passenger cars to delivery vehicles, buses, and trucks – state regulators should take measures to maximize the benefits and minimize the challenges associated with this transportation transformation.

“Electric vehicles are coming, and regulators across the country are starting to grapple with what that means for utilities and the electric power system,” said Matt Stanberry, vice president of market development for AEE. “There are tremendous benefits to be gained from vehicle electrification for not only drivers and fleet owners, but also ratepayers and the electric power grid. This issue brief can point regulators in the right direction to capture those benefits.”

In EVs 101, AEE urges PUCs to take seven specific steps:

1. Establish an electric vehicle regulatory framework. PUCs should use a collaborative process to gather information, then put out its viewpoint in a white paper on the key regulatory issues for EVs to reduce uncertainty in the marketplace. An open, collaborative process allows everyone to participate, ensuring that the best information is brought forward.
2. Consider roles for various stakeholders in electric vehicle charging infrastructure ownership and financing. Regulators need to clearly define appropriate roles for utilities and third-party companies to play in owning and financing charging infrastructure. Both utilities and third parties have critical roles to play and should be able to develop, own, and operate charging facilities under appropriate rules and market conditions.
3. Adjust utility planning and operations to fully integrate electric vehicles. As the EV market grows, utility planning and operations will need to incorporate EV load forecasts, make modernization investments for smart charging, adopt streamlined interconnection processes, and ensure interoperability standards are observed for public charging stations.
4. Implement rate designs for an electric vehicle future. Regulators should consider EV-only tariffs and well-designed time-varying rates to encourage off-peak charging. In the early stages of market development, regulators should also provide relief from excessive demand charges under EV-only rates to support the use of chargers.
5. Ensure that vulnerable populations are not left behind. As the EV market unfolds, particular attention should be given to low-income and other vulnerable populations. Regulators should take steps to improve the ability of these communities to access the EV market and apply longstanding principles of consumer protection to ratemaking decisions with cost implications.
6. Educate consumers. Given the important role that consumer awareness plays in EV adoption and utilization of charging infrastructure, regulators should allow utilities to use their unique relationship with customers and experience in customer engagement from energy efficiency programs to improve access to EV information.
7. Prioritize consideration of medium- and heavy-duty fleets. Vehicle fleets have the potential to provide electrification at scale in the near term, with substantial benefits to the grid and society, and some operators are already starting to make large commitments to electrifying their fleets. Commissions should explicitly look at fleets in the context of the regulatory issues outlined in this paper.

Download EVs 101: A Regulatory Plan for America’s Electric Transportation Future here.

About AEE
Advanced Energy Economy (AEE) is a national association of businesses that are making the energy we use secure, clean, and affordable. Advanced energy encompasses a broad range of products and services that constitute the best available technologies for meeting energy needs today and tomorrow. AEE’s mission is to transform public policy to enable rapid growth of advanced energy businesses. AEE and its State and Regional Partner organizations are active in 27 states across the country, representing more than 1,000 companies and organizations in the advanced energy industry, which now employs 3.4 million U.S. workers. Visit AEE online at www.aee.net and follow the latest industry news @AEEnet.