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Sunday, 19 March 2017 16:09

State regulators to sort out EV policy questions between utilities, private companies

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Executives at California-based ChargePoint, whose electric vehicle charging systems are installed at locations across Grand Rapids, had opposed a plan by Consumers Energy to install its own stations for free at various locations in the Lower Peninsula. Executives at California-based ChargePoint, whose electric vehicle charging systems are installed at locations across Grand Rapids, had opposed a plan by Consumers Energy to install its own stations for free at various locations in the Lower Peninsula. MiBiz File Photo

Roughly a year ago, Jackson-based Consumers Energy became the first major utility in Michigan to propose a statewide network of electric vehicle charging stations.

However, Consumers’ $15 million plan faced strong policy disagreements from private charging station manufacturers, environmental groups and staffers with the Michigan Public Service Commission

The issue centered on what role regulated utilities like Consumers or DTE Energy should play in growing the state’s electric-vehicle market. Specifically, Consumers’ proposal raised the question of whether having ratepayers fund the EV infrastructure effectively stifles competition. 

Facing these challenging questions, Consumers formally withdrew its electric vehicle infrastructure plan in January. The proposal was part of a broader $113 million rate increase granted to the utility in late February. 

While participants in the rate case hoped Consumers would amend its proposal, or test it as a pilot, the MPSC instead ordered the creation of an “Electric Vehicle Technical Conference” to gather input from a variety of stakeholders, including “utilities, auto manufacturers, third-party suppliers of charging equipment, transportation planners and other interested groups.” 

“I’m really glad to see a collaboration coming together as an outcome here,” said Liesl Eichler Clark, president of the Michigan Energy Innovation Business Council. “We’re interested to see how the support for these programs can really help with not only the implementation and penetration of electric vehicles, but also market access to that opportunity and making sure it’s structured in a way so that other companies can take advantage.”

California-based charging station manufacturer ChargePoint — whose infrastructure has been installed across West Michigan — was actively involved with the rate case before the MPSC. The company argued, and an administrative law judge agreed, that Consumers’ proposal to pay for the capital costs of the program through its rate base would have been unfair for third-party companies.

The utility proposed installing 810 fast-charging and standard AC-charging stations in major metro areas in the Lower Peninsula that would be paid for by Consumers ratepayers. Site hosts for publicly available charging stations would have received them for free, and Consumers would recover construction and operating costs through electricity usage charges at the sites.

“A program of this magnitude will drive (charging station) vendors out of Consumers’ service territory, as competing with free is very difficult,” according to testimony from James Ellis, ChargePoint’s director of utility solutions. “Ratepayers benefit from a robust and competitive market as they have access to the latest advancements in charging technologies and services in the quickly evolving EV market. 

“Technology is advancing too quickly for utilities to keep up with, and a utility procurement would ‘lock down’ a technology available today for a decade or more — with a product feature set that was selected for the EV driver by the utility (who has very little experience in the EV industry) — increasing rate-payer risk of the investment and limiting potential grid benefits.”

Eichler Clark said this will be the “important question” as the collaborative process moves forward. The group also will have to work through questions about when and where charging should take place to minimize the effects on electricity demand at homes, workplaces or high-traffic areas.

MORE OPPORTUNITIES

Additionally, MPSC staff raised concerns about whether EV charging infrastructure is consistent with public utility regulation of a natural monopoly. In the end, though, MPSC staff had hoped for a revised proposal that changed the way Consumers gave out reimbursement and rebates. 

Instead, Consumers withdrew its plan altogether. A spokesperson noted the company is “willing to be a participant” in the collaborative process.

In a statement, Michigan Public Service Commissioner Norm Saari noted that while Michigan leads the nation in electric vehicle production, it is 11th in actual deployment.

“We commend Consumers Energy for its thoughtful proposal and believe important issues were raised that need further discussion in the development and usage of private and public charging stations to power the anticipated statewide growth of EVs on our roads,” Saari said.

The collaborative may also build off the work of an electric vehicle work group the MPSC sponsored nearly a decade ago “that addressed issues when the technology was emerging and electric vehicle usage was not as common as it is today,” according to the MPSC’s Feb. 28 order.

Larry Ward, executive director of the Michigan Conservative Energy Forum, was encouraged that Consumers is at least “on the pathway to try and make that market part of their business model. It’s one of those classic arguments between which is the right entity (to do this). Is it the business world? The government world? Should it be regulated or nonregulated? I like that (Consumers) at least did something. We’re in the buildout phase, and anything that advances the electrification of vehicles is good.”

‘WE HAVE WORK TO DO’

The Michigan Conservative Energy Forum is part of a broader push to improve access to electric vehicles in Michigan. The group sided with Tesla as the car company fought to sell its vehicles directly to customers, bypassing the state’s dealership model, which Ward called “problematic.”

Environmental groups who participated in the Consumers rate case, as well as the Michigan Agency for Energy, also have submitted proposals for funding through the Volkswagen emissions scandal settlement.

Taking advantage of the electric vehicle market can keep economic opportunities in Michigan, as well as tackle emissions from the transportation sector, which has surpassed electric generation as the largest emitter of greenhouse gases.

At this point, Eichler Clark says “we have work to do” when it comes to increasing electric vehicle adoption. In addition to policy questions about how the infrastructure should be designed, owners of electric vehicles also simply want to be able to travel main corridors — Detroit to Chicago or Detroit to Traverse City, for example — without worrying about a lack of charging stations.

“In states I’ve looked at, I can’t say anyone has fully pulled together what the right set of policies are,” she said. “That being said, I’m bullish on Michigan figuring it out. We have a unique combination of a strong advanced mobility sector with the utility sector and interested parties.” 

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