Big power’s EV charging strategy: Raise rates, overpromise, underdeliver, repeat

[mspohr]

Big power’s EV charging strategy: Raise rates, overpromise, underdeliver, repeat

We grant publicly regulated utilities certain privileges in exchange for reliability and affordability. When they try to leverage that privilege to corner a new market, they deserve plenty of pushback.

www.utilitydive.com

But if you are an electric utility, the more you build, the more you make – regardless of demand, service or customer satisfaction.
Regulated utilities recoup a guaranteed return on investment, which averaged 9.7% in the first half of 2023, according to S&P Global. When the power company unveils their “green initiative” to “invest” $100 million in building, owning and operating EV charging stations, that means the power company is spending $100 million of ratepayer money to make a guaranteed $9.7 million.

 

[getakey]

to a certain extent, this plays into this claim

Claim that EVs are subsidized by $50K per car

What do you guys think of this article? Of Course no mention of subsidies to oil industry. Obviously the source has an agenda, but would like to point out the fallacies https://www.texaspolicy.com/wp-content/uploads/2023/10/2023-10-TrueCostofEVs-BennettIsaac.pdf

teslamotorsclub.com

 

[RandyS]

Big power’s EV charging strategy: Raise rates, overpromise, underdeliver, repeat

We grant publicly regulated utilities certain privileges in exchange for reliability and affordability. When they try to leverage that privilege to corner a new market, they deserve plenty of pushback.

www.utilitydive.com

But if you are an electric utility, the more you build, the more you make – regardless of demand, service or customer satisfaction.
Regulated utilities recoup a guaranteed return on investment, which averaged 9.7% in the first half of 2023, according to S&P Global. When the power company unveils their “green initiative” to “invest” $100 million in building, owning and operating EV charging stations, that means the power company is spending $100 million of ratepayer money to make a guaranteed $9.7 million.

I know there's a lot of varying opinions about utilities on this forum, but I retired from the one in San Diego after 36 years and worked in their EV group. There are a couple of benefits for EV drivers when the utility owns and operates the chargers, which is why I'm supportive of that concept. First, the driver pays retail electricity prices without a middleman raising the prices to fund their business. Second, the utility has a track record of maintaining their assets, and it is no different with EV charging. I saw an example of a Level 2 station being run over and knocked off the mounting base on a holiday weekend and the utility replaced it within a day or two and got it back online. You won't see that all the time with site host-owned stations.

Yes, the utility business model in CA is to earn a rate of return on assets (and not on electricity purchases and sales). That's the nature of the business. The CPUC in recent decisions is moving away from authorizing utility ownership of the charging stations, so it may be a moot point. But think about this the next time you see a broken charging station that was funded by utility rebates instead of utility ownership...

 

[mspohr]

to a certain extent, this plays into this claim

Claim that EVs are subsidized by $50K per car

What do you guys think of this article? Of Course no mention of subsidies to oil industry. Obviously the source has an agenda, but would like to point out the fallacies https://www.texaspolicy.com/wp-content/uploads/2023/10/2023-10-TrueCostofEVs-BennettIsaac.pdf

teslamotorsclub.com

TLDR: Fossil fuel regulators spread FUD about EVs.

So much wrong with this paper to even know where to start.

 

[mspohr]

Yes, the utility business model in CA is to earn a rate of return on assets (and not on electricity purchases and sales). That's the nature of the business.

Yes, and that's the fundamental problem that TFA points out with utilities owning charging stations.
There is no incentive to keep them operational since they earn the same amount if they're running or not.
They can undercut other providers since the cost of their electricity is subsidized by ratepayers.

In Maryland:
"With a guaranteed return on a new service, power companies can undercut any competition, selling power to EV drivers at rates no private business could match. In Maryland, 248 of the 262 utility-owned charging stations operate at a loss. But that doesn’t mean the power companies lose money – it simply means that everyone in Maryland pays higher power bills to make the utility enterprise profitable, while also discouraging entrepreneurs and innovators from ever opening an EV charging station."

In Minnesota and Colorado:
"In Minnesota and Colorado alone, Xcel has lobbied to raise power bills by a combined $342 million in just the last year in order to corner the EV charging marketplace.
The utility had previously gotten permission to build, own and operate 54 chargers in Colorado, Minnesota and New Mexico since 2019, As of this summer, the utility had completed 0."

 

[RandyS]

Yes, and that's the fundamental problem that TFA points out with utilities owning charging stations.
There is no incentive to keep them operational since they earn the same amount if they're running or not.
They can undercut other providers since the cost of their electricity is subsidized by ratepayers.

In Maryland:
"With a guaranteed return on a new service, power companies can undercut any competition, selling power to EV drivers at rates no private business could match. In Maryland, 248 of the 262 utility-owned charging stations operate at a loss. But that doesn’t mean the power companies lose money – it simply means that everyone in Maryland pays higher power bills to make the utility enterprise profitable, while also discouraging entrepreneurs and innovators from ever opening an EV charging station."

In Minnesota and Colorado:
"In Minnesota and Colorado alone, Xcel has lobbied to raise power bills by a combined $342 million in just the last year in order to corner the EV charging marketplace.
The utility had previously gotten permission to build, own and operate 54 chargers in Colorado, Minnesota and New Mexico since 2019, As of this summer, the utility had completed 0."

See the definition of "used and useful" when it comes to utility assets...

From wikipedia: In the utilities industry, the Used and Useful Principle is a concept that requires energy assets to be physically used and useful to current ratepayers before those ratepayers can be asked to pay the costs associated with them. This is a fundamental principle of utility regulation.

Used and Useful Principle - Wikipedia

en.wikipedia.org

 

[mspohr]

See the definition of "used and useful" when it comes to utility assets...

From wikipedia: In the utilities industry, the Used and Useful Principle is a concept that requires energy assets to be physically used and useful to current ratepayers before those ratepayers can be asked to pay the costs associated with them. This is a fundamental principle of utility regulation.

Used and Useful Principle - Wikipedia

en.wikipedia.org

Nice.
Has any utility ever had their rate increase revoked because their assets weren't used or useful?