Developing Commercial Rate Design for EV Charging Infrastructure

by | May 18, 2023

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electric vehicle charging stations

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Providing accessible, affordable charging options is vital in the transition to electric vehicles (EV). Incentivizing third-party investments in transportation electrification is crucial for the widespread adoption of EV charging infrastructure. One effective way to achieve this is by ensuring that commercial rate designs support EV charging.

Public fast-charging infrastructure plays a significant role in providing EV charging access to individuals who cannot charge their vehicles at home or work, such as renters, multifamily residents, rideshare drivers, and travelers using transit corridors. When drivers have confidence in the availability of charging stations, it encourages them to switch to EVs. This shift not only brings environmental benefits but also economic advantages, as the increased electric load can help lower electricity prices for all utility customers.

Developing Commercial Rate Design for EV Charging

According to Lindsey Stegall at EVgo Fast Charging, developing alternative rate designs is essential to overcoming high electricity costs and ensuring accessible EV charging. EVgo, a leading provider of EV charging platforms, has extensive experience in rate design proceedings across the country. Drawing from this experience, EVgo suggests seven principles that utilities and regulators should consider when creating alternative rate designs for EV charging.

EVgo suggests implementing optional rates and varying charging rates by time of day, EV charging can benefit the electrical grid. Their other principles discuss expanding existing rates, designing inclusive rates for current customers, and implementing rates based on work, public, and fleet charging. 

Differentiating applicable rates based on scenario can offer solutions to the expense of electrical charges. 

Rate design is a complex challenge, but utilities across the country have started implementing commercial EV rates to accelerate transportation electrification in their regions. This momentum is expected to continue, driven by the requirement within the Infrastructure Investment and Jobs Act for states to consider measures promoting greater electrification of the transportation sector, including rates that encourage third-party investment in EV charging.

Accessible EV Charging Infrastructure  

However, due to the high cost of electricity, the possibility of widespread charging infrastructure is made complicated, and at times, seemingly out of reach. Electricity accounts for the largest operating expense for DC fast charging stations, and demand charges, which are based on the highest level of electricity required during a specific period, can pose financial challenges. The unique electricity usage patterns of fast charging stations often result in substantial demand charges, making up a significant portion of the electric bill.

Widespread EV adoption relies heavily on the availability of accessible and affordable charging infrastructure, particularly public direct current (DC) fast charging stations. These stations not only alleviate range anxiety but also seamlessly integrate EV charging into drivers’ daily routines. As the transportation sector is a major contributor to greenhouse gas emissions in the U.S., the transition to EVs is seen as crucial when it comes to climate change and air quality improvement.

As efforts to overcome the demand charge barrier gain traction nationwide, we can expect more widespread deployment of EV charging infrastructure. This progress will drive EV adoption and pave the way for a sustainable future in transportation.

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