Cleantech Market Intelligence
NRG Energy Responds to Outcry Over EV Charging Agreement
Power provider NRG Energy’s proposed settlement with the California Public Utilities Commission (CPUC), which would include the company’s ownership of EV charging equipment across the state, was lauded by some EV manufacturers and met with displeasure from EV industry participants and competitors. The company responded by adjusting its settlement offer, and along with the CPUC on April 27 filed an amended settlement offer with the Federal Energy Regulatory Commission (FERC), which has 90 days to review the deal.
I submitted questions to NRG about the changes to the revised agreement and the impact on Californians, and below is an edited transcript of the email exchange with Arun Banskota, president of NRG Energy’s EV Services division.
Pike Research: How do you think that this agreement will accelerate the demand for PEV ownership in California?
Arun Banskota: This is a significant investment of capital that addresses the “Chicken and Egg” problem facing the industry as a whole: how do you build a network when there aren’t enough cars on the road? NRG’s investment and innovation in DC fast-chargers will break open the EV market by addressing the number one challenge facing the industry–range anxiety. This settlement puts the state on the path to creating a “backbone” of fast-charging stations and work place and residential charging as well as charging at institutions such as schools, hospitals and community colleges that are crucial to meeting California’s goal of having 1.5 million EVs on the road by 2025. More EVs on the road means more opportunities for companies throughout the sector as we create a technology- and vendor-neutral infrastructure to encourage EV adoption and demand growth.
PR: What are the benefits from the settlement to California ratepayers who don’t own an electric vehicle?
AB: NRG’s EV infrastructure will deliver multiple benefits to California families and businesses, including those that don’t currently use EVs. NRG’s project will:
- Create jobs and new investment in California;
- Open up increased market opportunities for existing and new businesses in the EV sector, from technology to manufacturing to EV charging hosts;
- Improve air quality in the of the state’s largest most densely populated metropolitan areas;
- Make EVs more accessible to consumers of all socioeconomic backgrounds;
- Give consumers another choice for transportation amidst rising oil prices;
- Reduce greenhouse gas pollution;
- Provide greater exposure to the benefits of EVs through the car sharing program we will support.
PR: Can you explain how the modifications to the agreement address the concerns filed by Ecotality?
AB: NRG worked closely with the CPUC to ensure that this settlement will drive growth and preserve competition in the EV market so that Californians can meet their clean energy goals. California is targeting 1.5 million EVs on the road by 2025. To get there, the state needs the kind of investment that we are making – and then some. The 200 public freedom stations and the make ready sites will be spread across 55,000 square miles of the most densely populated metropolitan areas in California. While it is significant, it doesn’t saturate the market. Additionally, a good percentage of our infrastructure will be built in low and moderate income areas, something that was unlikely to happen outside the scope of this type of settlement.
Most importantly, there is no exclusivity for the locations where the Make-Readies or the Freedom Stations will be installed–our competitors can build right next to our installations. Additionally, the make ready infrastructure is being built for and will be delivered to the citizens, businesses and property owners of California. This investment will enable other companies to make subsequent investments in a more mature market as we are taking the up-front risk to create longer-term value for the entire sector by paying to build an infrastructure that our competition will have access to after 18 months. By building the make readies, we are lowering the barrier to entry for the entire market. The infrastructure cost (approximately $10,000-$15,000) is the most significant portion of the overall cost to install chargers.
PR: Other EV charging services companies have objected to the 18-month period where NRG gets exclusive access to installing charging equipment at the make ready locations. Why was this clause inserted and how can it expand rather than impede competition in EV charging services?
AB: I would emphasize that the CPUC wanted someone with “skin in the game” to ensure this infrastructure was successful by incenting NRG to site this infrastructure at properties with a higher probability of attracting EV drivers. The 18-month period allows us to have a short amount of time to try to take advantage of our $40 million investments, but is short enough to ensure that competitors can take advantage of it as well when this period is over.
PR: Is NRG required to give away any vehicle charging services or equipment as part of the agreement? I understand that the make-ready wiring and upgrades will become property of the location or residential EV owner, but will power be given to EV owners at no cost, or will any of the charging equipment be owned by the location owners?
AB: The make ready sites, a $40 million investment by NRG, will be turned over to the facility owner after the expiration of the 18 month exclusivity period and NRG will not own this infrastructure. By design, neither the actual chargers nor the electricity will be part of the infrastructure we supply to enable the property owners or our competitors to take advantage of the infrastructure in a way that best fits their respective business models.
PR: How does the equipment provided by this agreement compare with the free charging equipment given to PEV owners via the EV Project and ChargePoint America?
AB: The EV equipment we use will be acquired through a technology- and vendor-neutral RFP process. Probably one of the most important comparisons is the difference that our equipment is privately funded to ensure a sustainable business model that is only dependent on success of EV adoption.
Is this a good deal for EV owners, the industry, and California as a whole? Should FERC okay this with the 18-month exclusivity contract intact? Please share your comments below.