Author: Robert Walton Published: 4/13/2024 Utility Dive
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- South Carolina regulators should adopt nine “guardrails” around the development of electric vehicle charging stations and be skeptical of utilities spending ratepayer funds on them, according to the state’s Office of Regulatory Staff, which represents consumers in public service commission proceedings.
- The guardrails were outlined in an April 4 report published by the PSC, examining regulatory challenges and opportunities associated with transportation electrification in South Carolina.
- Private developers typically say utility ownership of charging stations represents unfair competition, and some states are moving to limit the practice. However, “there’s not been a one-size-fits-all [solution] across the country,” said Jay Smith, executive director of the Charge Ahead Partnership, which represents businesses interested in providing EV infrastructure.
Dive Insight:
Electric vehicle adoption in South Carolina has been modest so far, with just 7,400 light-duty EVs registered in the state in 2021, according to the report. But utilities are expecting rapid growth over the next decade and more, and the state’s legislature has mandated the PSC to open a docket to study transportation electrification every three years.
Duke Energy Carolinas and Duke Energy Progress indicated electric vehicles in their service territories are projected to grow from less than 1% of vehicles on the road to about a quarter by 2035. State-owned Santee Cooper has about 900 electric vehicles charging on its distribution system, but the report said that number is expected to grow to almost 50,000 vehicles by 2041.
The report published last week identifies eight issues for study. Though some overlap, the issues include: grid integration and resource planning; data management and coordination among energy system participants; development of charging infrastructure; and rate design.
“There were divergent positions represented during the proceedings,” the report noted.
Utility ownership in particular could be a contentious issue. State Sen. Larry Grooms, R, last year introduced Senate Bill 684, which would prohibit utilities from building EV charging stations with ratepayer funds.
The bill was carried over into the current legislative session and though it hasn’t advanced “there’s still opportunities, hopefully, for that kind of language to be to be considered this year,” CAP’s Smith told Utility Dive. “We’re hopeful that they recognize the value of more private investment to help growing the EV charging market.”
With no current law against South Carolina utilities owning charging stations, the PSC report notes that any costs put forward for recovery in a general rate proceeding “are subject to a reasonableness and prudency review by the commission and other intervening parties.”
Among South Carolina parties, positions on utility ownership of charging stations are fairly typical.
ORS Senior Engineer of Energy Planning and Emerging Technologies O’Neil Morgan testified in the proceeding that the consumer advocate isn’t opposed to all utility investment in charging stations but said it must be “limited.”
“We will evaluate those [on a] case-by-case basis using cost causation principle, and ensure that the costs are not subsidized by non-participants,” Morgan said. “But we acknowledge that there might be cases where the private sector cannot or decides not to participate in a location that the utility may have to step in. So it’s not ‘full stop no,’ but preferably no.”
Among its “guardrail” recommendations, ORS wants regulators to ensure that utility investment in electrification programs reflects “applicable cost causation principles and mitigate[s] cross-subsidization to the greatest extent practicable,” and said utilities should “pursue and exhaust all available state and federal funding sources for infrastructure deployment prior to the commitment of ratepayer funds.”
Americans for Affordable Clean Energy, representing companies looking to invest in the charging space, took a firmer stance. The commission “should not allow rate base treatment of EV chargers offered by electric utilities. Rather, regulatory policy should be directed to assisting electric utilities in meeting the infrastructure demands of an electrified transportation sector,” the group said in its comments.
Electric utilities say relying entirely on the private market may not lead to an equitable distribution of chargers.
“Complete and total reliance on competitive markets may not lead to a scenario in which all citizens can reasonably access EV charging,” Duke Energy said in its comments.
Danny Kassis, vice president of customer relations and renewables for Dominion Energy South Carolina, pointed to the state’s need to have EV chargers located along hurricane evacuation routes.
“If we’re going to hit the adoption rates which I believe we’re going to hit, if we have force majeure events … we probably need to be thinking about who fills those gaps,” he said in filed testimony. “If the private market’s not going to fill them, who’s going to fill those? … That’s a good example of why you probably shouldn’t say a utility should never be in the business.”
Some states have taken a “right of first refusal” approach, said Smith.
Nebraska legislators are considering a bill to require giving private developers 60 days to commit to building in areas where utilities have proposed chargers. Regulators in Georgia have allowed Georgia Power to propose a limited number of chargers per year, primarily in rural areas, but those can also be claimed by private developers.
“Nobody wants anybody to be left behind,” said Smith. The right-of-first-refusal approach can represent a workable comprise but “the devil is in the details,” he added, and the rules must be written with specific markets in mind.