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Sunday, 18 September 2016 13:13

Charged debate? Firms raise concerns over Consumers Energy’s EV charging network plan

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A Chevrolet Volt charges using a ChargePoint station located in the city-owned Ottawa Fulton Parking Ramp in Grand Rapids. A Chevrolet Volt charges using a ChargePoint station located in the city-owned Ottawa Fulton Parking Ramp in Grand Rapids. Photo by Joe Boomgaard

As Jackson-based Consumers Energy looks to build a statewide electric vehicle charging network, other companies in the sector have raised concerns about maintaining competition in the marketplace, both for vendors and drivers.

While EV advocates are generally supportive of the regulated utility’s plan to break into the market — and hopefully spur more EV adoption in Michigan — they also seek more details about where stations would be located and who would pay for it.

“We will continue to expand in Michigan and seeing a utility starting to play a role really helps to accelerate the (EV) market. But we don’t want them to control it,” said Dave Packard, vice president of utility solutions with ChargePoint, a national charging company with hundreds of individual charging “ports” in Michigan, including around Grand Rapids. 

“When you have one vendor doing all of the business, everyone else will pull out,” Packard said. “We want to maintain the competition.”

As part of a larger rate case before the Michigan Public Service Commission (MPSC), Consumers is seeking to install 60 direct-current fast-charge stations at 30 “strategically located” sites along major highways across the Lower Peninsula. The $15 million program also includes 750 alternating current charging stations.

A utility spokesperson said it’s too early to guess how many stations would be installed in West Michigan.

“We believe that expanding plug-in vehicle infrastructure in Michigan will create awareness and enable customers to purchase plug-in vehicles without concerns that they will have nowhere to charge,” Consumers Energy spokesperson Brian Wheeler said in an email to MiBiz. “The expansion and adoption of plug-in vehicles will support Michigan’s focus on emissions reduction and support Michigan’s economy and auto industry.”

As of now, the utility plans to add charging stations in “populated areas with safe and convenient accessibility.”

COMPETING FOR BUSINESS?

ChargePoint has 30,000 charging ports around the country and close to 600 in Michigan, according to Packard. The company has intervened in the rate case before the MPSC and is generally concerned that the investor-owned utility — which is guaranteed a rate of return on investments that can be paid for across its customer base — puts others at a disadvantage.

By adding more than 800 charging stations across the state (which would nearly triple the number of stations in Michigan, according to federal figures), Packard said Consumers Energy would “freeze the technology and stop innovation in the marketplace.” 

ChargePoint prefers to see customers “putting some of their own funds” into using the charging network, which he says would allow more companies to compete for business.

“Utilities are great at what they do, but them trying to define for a whole set of customers what is featured is really difficult,” Packard said. “We don’t care what product they offer, as long as it’s competitive.”

Consumers Energy says its strategy is meant to “accelerate the adoption of plug-in vehicles” across the state.

“The ability for equipment suppliers will be no different in the future than it is today. In fact, our program could increase demand, as plug-in vehicle awareness and adoption accelerates throughout Michigan,” Wheeler said.

Wheeler added that equipment vendors like ChargePoint “will have the ability to respond to requests for proposals, providing equipment that meets or exceeds qualification standards.”

Additionally, sites for the stations will be selected “using a variety of factors, such (as) the proximity to existing stations, safety for the driver, lighting, traffic levels and interest of potential site hosts,” Wheeler said.

General Motors has filed testimony in support of the plan, saying it will “propel Michigan into an EV leadership position nationally.”

Andrew McIndoo of the Southfield-based engineering consulting firm P3 North America Inc. said while he supports “any type of electric vehicle infrastructure program,” he is still waiting to hear more details about where stations will be located and who would pay for it.

He added that Michigan ranks relatively high among states with charging infrastructure and, as a whole, “the state is moving very, very quickly with this.”

According to the U.S. Department of Energy’s Alternative Fuels Data Center, Michigan has 310 public electric vehicle charging stations and 804 charging outlets. That doesn’t count the number of private charging stations.

Meanwhile, the Obama administration announced in July a series of initiatives to spur EV adoption, including a “framework for collaboration for vehicle manufacturers, electric utilities, electric vehicle charging companies, and states, all geared toward accelerating the deployment of electric vehicle charging infrastructure and putting more electric vehicles on the road.”

‘INFRASTRUCTURE SHOULD LEAD’

But ChargePoint’s concerns reflect a broader issue in the U.S. with developing infrastructure in a way that encourages EV adoption, experts say. As the market grows, the “chicken or the egg” dilemma (which comes first, charging stations or electric vehicles?) is expected to smooth itself out. 

Still, this moment in time should be considered a transition period, said Douglas Jester, a principal at the Lansing-based consulting firm 5 Lakes Energy LLC.

“The analyses say that infrastructure should lead,” Jester said. “It’s not necessarily a money-losing investment, but a patient investment in charging infrastructure will encourage greater vehicle adoption and make infrastructure profitable. There’s a good case for utilities or someone else that can be a bit more patient in making an investment in infrastructure.

“I think ChargePoint is right to raise the issue. It’s important that we find a way to do this that does allow customer choice and competition for installing and preparing the vehicle charging equipment.”

Jester said Consumers’ proposal focuses more on “destination charging” than on at-home charging, but “unfortunately they were not clear about the economics and who’s going to pay for it.”

The pricing structures for EV charging varies by community. Additionally, companies, utilities, municipalities and site hosts can play different roles in the process. 

Wheeler said Consumers’ “intent” is that charging stations would be metered with the energy paid for by the station host business owner.

In the short term when there are “not enough (EV) drivers,” the MPSC will have to decide on a pricing model, according to Jester. But in the long run, drivers will need to pay for the infrastructure costs, he said.

“I’m convinced it can be done in a way that’s fair in the short term and beneficial in the long term for utility customers,” Jester said.

ChargePoint’s Packard believes the growing number of EV models with longer range means charging programs are unlikely to “move fast enough to overbuild.”

“Particularly in Michigan, the state should be a leader in the market,” he said. “It has a direct economic impact on the state because of the automakers, which have been progressive.”

CHARGER USE GROWS IN GRAND RAPIDS

The city of Grand Rapids installed plug-in vehicle charging stations at seven different locations in 2012. Since then, they have been used 4,506 times, saving roughly 11 tons of greenhouse gas emissions, according to Haris Alibasic, director of the city’s Office of Energy and Sustainability.

The number of monthly charging sessions has grown steadily, with the peak number of nearly 150 sessions in August 2014, according to figures provided by the city.

As part of a “unique” agreement with ChargePoint, the city purchased the charging equipment and drivers pay the vendor to use its network. Because the city is not allowed to charge drivers for the energy used, it charges a premium for parking spaces with charging stations.

“Generally, it’s been a very successful program,” Alibasic said. “Most importantly, I think there’s more that can be done. The numbers show more electric vehicles on the road, so perhaps any initiative that increases the number of charging stations available is good.”

Alibasic believes EV adoption and charging station installation should be a “parallel process.” As more vehicles are purchased in a year, then more charging stations should be added statewide, he said. 

“It’s really neither the chicken nor the egg in my mind. It’s a matter of how we approach this practically,” Alibasic said. “How do we view electric vehicles as a piece in a puzzle of moving away from greenhouse gas emissions and looking at a comprehensive transportation system? 

“We’re going to have vehicles. But what type of vehicles we’re going to see in the future will be a critical component.”

Jester of 5 Lakes Energy views the situation as three milestones the EV market will need to achieve compared to gasoline-powered vehicles.

“When (EVs) are cheaper on a life-cycle basis (than gasoline-powered cars), some people will do it. When the range problem is gone, more people will do it. When it’s cheaper on the initial purchase, then almost everyone will do it,” he said. “I’m anticipating that we’re in a period when there will likely be significant changes in the rate of adoption of EVs over the next decade. We also want the infrastructure to keep up with that.” 

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