To promote electric vehicle (EV) adoption and help establish a nationwide network of EV charging stations, five governors from the Midwest region (Illinois, Indiana, Michigan, Wisconsin, Minnesota) have agreed to join what they call the Regional Electric Vehicle Midwest Coalition. Based on the initiative of the group, the goal of this coalition is to foster increased cooperation between participating states to advance the transition of our transport sector to electric vehicles.
As governors move forward with this collaboration, they must do the following: ensure that the private sector is a key player in these decisions and advocate for policies that will produce the greatest number charging stations for electric vehicles, or risk hindering the transition to electric vehicles. .
The most effective strategy for deploying electric vehicle infrastructure is the same one that resulted in the convenient location of gas stations across the country: fair competition and private sector investment.
Utility companies are typically at the forefront of electric vehicle lawmakers’ concerns. With the need to meet the increased demand for electricity to meet this initiative, they deserve this consideration in the process. However, utility companies often receive government funding AND can use their power generation monopoly to eliminate competition in the EV charging market.
One anti-competitive advantage that allows utility companies to capture this emerging market is demand charges, which are additional fees charged by utility companies for the use of electricity during peak hours in order to ensuring that the electrical grid is ready to meet energy needs.
Small businesses are often overwhelmed by these charges, thus discouraged from moving forward with EV charging facilities.
Many small refueling points and convenience stores have attempted to join the electric vehicle transition and host direct current fast charging (DCFC) stations. These chargers allow electric vehicle customers to charge their cars in a shorter time. But, when a DCFS is used, it almost always peaks in power consumption, incurring additional costs. When added to the base cost of electricity, EV chargers quickly become unprofitable. According to research, almost all companies operating DCFC chargers are losing money.
Another unfair advantage is that utility companies are allowed to raise fees from their current subscribers to cover the cost of building and operating EV chargers, where convenience stores and other gas stations must use private capital to this investment.
This ability of utility companies to compete unfairly in this market will inevitably lead to fewer electric vehicle charging stations, given how vital the role of the private sector is in powering our transport sector. Therefore, the private sector must be among the key stakeholders who are brought into this discussion to create an equitable partnership for fund development.
When these governors say they will develop an approach “informed by industry, academia and community engagement,” I hope the private sector will make its voice heard. Small fuel stops have been invaluable in creating the interconnected national transportation network we all know today, and they will continue to help shape a new future for electric vehicles if lawmakers support fair competition.
Josh Sharp is CEO of the Illinois Fuel and Retail Association in Springfield.