The Flaw In Biden's Electric Vehicle Charger Plan
By Charles Kennedy of OilPrice.com
Biden administration earmarked $5 billion for states with EV charging infrastructure plans.
Retailers are worried that government money for EV chargers may mute private investment.
The Biden administration’s EV infrastructure plan aims to install half a million EV chargers in the coming years.
The Biden administration has earmarked $5 billion ready to be disbursed to states with EV charging infrastructure plans in place. States are on board with the shift to EVs and are indeed making plans for charging infrastructure. But the people at the end of the line, those who will host the chargers, are having misgivings. Utility Dive reported this week that convenience store owners have sounded the alarm about the EV infrastructure bill, saying the legislation behind it is discouraging private investment, which is going to be essential for the successful shift to EVs.
The report cited Doug Kantor, general counsel of the National Association of Convenience Stores, as saying that the sector was concerned about turning in a profit from EV chargers in the current political framework regarding these.
“There is no way to build out the infrastructure that’s needed to charge vehicles without private investment. To just do it with public money, that’s not going to happen,” Doug Kantor said.
Retailers’ main worries have to do with demand charges and the option for regulated utilities to own EV chargers. According to the NACS, the charges need to be reduced or eliminated, and fair competition between regulated utilities and private businesses in EV charging needs to be ensured.
This is the latest chapter in the EV infrastructure story unfolding in the United States under the ambitious Biden administration’s plans to electrify transport. Per these plans, the country should have half a million chargers installed in the coming years, for which the administration allocated $5 billion.
Not everything is going smoothly, as evidenced by the information contained in the Utility Dive report. Many EV chargers would be installed at public sites, but also many would need to be installed at locations such as fuel stations and convenience stores.
One problem with that is that in some parts of the U.S., the distance between fuel stations is quite considerable, which problematizes making an economic case for EV chargers.
The Wall Street Journal wrote about this earlier this year, noting states such as Utah, Wyoming, Montana, New Mexico, and Colorado, saying that the lengthy stretches of empty road in these states make the installation of EV chargers more expensive, and in some cases outright impossible.
“There are plenty of places in Montana and other states here out West where it’s well more than 50 miles between gas stations,” the WSJ quotes Rob Stapley, an official with the Montana Department of Transportation, as saying in its report.
“Even if there’s an exit, or a place for people to pull off, the other big question is: Is there anything on the electrical grid at a location or even anywhere close to make that viable?”
Now, the National Association of Convenience Stores is raising the issue of demand charges—the additional fees that utilities charge commercial consumers for maintaining a constant supply of electricity. These additional fees make life costlier for convenience store owners and creates doubts about the profitability of holding EV chargers.
“Retailers have no confidence that EV charging is a money-making business, even with this federal help,” one convenience store owner told Utility Dive in comments on the administration’s EV infrastructure plans. “I’m terrified of getting hit with the demand charge.”
Private investment in EV chargers is not entirely lacking. GM and Pilot Co. recently sealed a partnership deal that will see them build 2,000 fast-charging stalls at 500 Pilot Co. and Flying J locations, to be completed by 2025.
Yet it appears that more is needed to roll out enough EV chargers to tackle drivers’ range anxiety, which has been one of the main reasons for people to refrain from switching from internal combustion engine cars to electric vehicles. If these can’t be made profitable, however, such investment would be slow to come.