Utility Companies & EV Charging Station Infrastructure Costs

By January 20, 2020 Blog

power grid utilityThe expansion of the electric vehicle charging infrastructure in the United States means the cooperation of both public and private sectors, from individuals investing in stand-alone charging stations to businesses, enterprises, and municipalities developing charging station networks. With more drivers choosing to make the switch from gasoline-powered vehicles to EVs each year, the demand for EV charging stations continues to rise –– and it is critical that this demand is sufficiently met.

This requires innovative solutions and significant investment from all parties involved, as these EV charging station infrastructure costs will need to be disbursed and absorbed by these various sectors. Utility companies, however, will play a vital role in meeting this challenge, as they have unique advantages which may enable a faster and more efficient expansion of the charging infrastructure nationwide.

Let’s look at some of these advantages and break down the ways in which utility regulations are helping close the infrastructure gap in EV charging.

Growing Demand for Charging Access

First, let’s briefly explain why the effort to expand the EV charging infrastructure is so critical. The number of electric vehicles on US roads has already increased dramatically over the past decade, and that increase is only expected to rise in the next several years. This is due to several factors, including the lower average cost of purchasing a new electric vehicle, the rising cost of fossil fuels, and the desire for many consumers to reduce their carbon footprints. Many government municipalities have also committed to transitioning their public transit fleets to plug-in electric vehicles over the next decade.

The anticipated increase in electric vehicles means an increased strain on the electric grid, with some utilities companies predicting that EV use could begin to impact the grid by the year 2025. That means that utilities need to start preparing the grid for this increased energy consumption now, by retrofitting, maintaining, and repairing power lines in order to manage EV charging station infrastructure costs.

As of 2019, there are approximately 30,000 non-residential charging stations in the United States, but that number does not meet the expected increase in demand. In particular, the areas with the highest concentration of EV drivers, such as California, New York, and Washington, DC, do not have an adequate number of charging stations. Pockets in the Midwest, South, and Western states are also lacking charging stations along vast stretches of interstate and around cities with populations expected to grow. All of this points to a rising challenge that will require smart solutions and decisive action.

The Advantages of Utility Company Involvement

Utility companies have several competitive advantages over other enterprises, and even over government municipalities. The electric grids throughout the United States are already managed and maintained by these companies, which may help reduce the costs for expanding EV charging station infrastructure.

First, utility companies have a deep rooted knowledge in the electric grid and understand the potential impact of increased demand. The expertise that utilities possess will be critical to successfully adapting the grid for the EV revolution.

Utility companies also have access to the necessary capital and resources to tackle this monumental task. This means that retrofitting the grid can be done at the necessary speed and scale required to meet demand. The standards and practices in place can reduce disruptions to service as new infrastructure is built, while economies of scale can help keep EV charging station infrastructure costs under control.

The existing pricing models and payment collection methods can make charging for the energy consumed simpler; the channels already exist to bill EV charging station operators for energy costs.

Finding Innovative Solutions

ev charging infrastructureSmart utility regulations will be necessary to help close the EV infrastructure gap, meet the growing demand, and ensure that EV charging station development promotes a stronger EV culture overall.

State by state, legislators are weighing in on whether EV charging stations should be regulated as utilities –– and as of 2019, about half of states in the country have ruled that charging stations should not be regulated as utilities. This helps to relieve uncertainty surrounding the issue, and paves a clearer path forward for those looking to invest in EV charging stations.

Some states are relying on ingenuity and outside-the-box thinking to leverage the resources of utility companies while also incentivizing additional investment. In states like California, New York, Michigan, and Maryland, investor-owned utility infrastructure programs. Regulators in each of these states continue to wrestle with the amount of control that should be allotted to third-party owners versus private utility ownership.

For example, in California, Pacific Gas & Electric has an ongoing program to expand EV charging infrastructure. In this public utilities commission, PG&E supplies and owns EV charging equipment, but third-parties manage installation, billing, and maintenance. Similar programs are springing up around the country with varying regulations and requirements for EV charging station operation; these programs will be critical to controlling the EV charging station infrastructure costs going forward.

Closing the Gap

EVConnect is at the forefront of the expansion of EV charging infrastructure, providing innovative solutions that help you launch and grow your EV charging network. We work with enterprise businesses, government municipalities, healthcare facilities, educational institutions, major hospitality chains, and more to help keep EV charging station infrastructure costs low while improving ROI.

Our goal is to give you the resources you need to educate yourself about the requirements for EV charging station network management and utility regulations, and steer you toward the best solution for your specific case. To learn more about how you could be on the ground floor of expanding the EV charging station infrastructure nationwide, call us at (888) 780-0062, or send us a message online today.

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