Navigant Research Blog

Washington Encourages Utilities to Deploy EV Chargers

— May 13, 2015

On May 11, Washington Governor Jay Inslee signed into law a bill titled “Encouraging utility leadership in electric vehicle charging infrastructure build-out.” The law encourages public utilities commissions (PUCs) in the state to set rules for passing along the cost of electric vehicle (EV) charging to all ratepayers if they are requested to do so by investor-owned utilities.

The legislation enables utilities to pass on the cost of EV charging infrastructure as long as the rate increase does not exceed one-quarter of 1 percent. PUCs in other states have varied in their willingness to allow the cost of EV chargers to affect the rate base. For example, in Indianapolis, EV car share service Blue Indy is months behind the original launch date because the PUC there denied a similar request for EV infrastructure investments by the utility.

Washington State Representative Chad Magendanz (R-Issaquah), who sponsored the legislation, said in an email to Navigant that the law was created so that the upfront cost of charging equipment could move from the consumer to the utility. “My vision is for utility customers to be able to simply request an EV Level 2 charging station for their garage, just like they’d request a cable modem installation from the cable company … many of the current obstacles to charging at home or work will disappear.”

Restored Incentive

Washington is expected to have the fourth-most EVs on the road in 2015, according to Navigant Research’s recently published report, Electric Vehicle Geographic Forecasts.

Utilities are well-positioned to own and operate EV charging infrastructure since it increases the market for their product (electricity), and they also need to manage the impact of EV charging on grid stability. However, in many states, laws have prevented them from owning EV chargers, and some states, such as California, have had to revise laws to allow utility involvement.

“HB 1853 essentially restores the incentive a power company would normally have to invest in equipment that would increase its sales, but that we’ve eliminated through conservation programs,” said Magendanz. “Utilities have the expertise and purchasing power to dramatically reduce costs of this essential infrastructure build-out, and can break down barriers to EV ownership in high-density regions.”

The challenge has been for states that are pushing utilities to reduce energy consumption to recognize that transferring oil consumption from transportation into electricity delivered by utilities is economically and environmentally sound policy. States such as Washington that have low carbon intensity for producing energy (only Vermont has a lower carbon intensity, according to the U.S. Energy Information Administration) can see the greatest greenhouse gas savings by encouraging EV adoption.


Solving the EV Charging Puzzle

— May 11, 2015

When Tesla, Nissan, and General Motors (GM) introduced plug-in electric vehicles (PEVs) to the mass market, arguments against PEVs mainly cited weaknesses with vehicle cost, range, and limited publicly available electric vehicle supply equipment (EVSE). The first two weaknesses are difficult to solve, but their solutions are fairly straightforward: battery cost cuts through economies of scale and range increases through the development of better batteries. However, solving the third weakness is more nuanced. For instance, it’s been assumed that simply increasing public charging infrastructure will increase the adoption of PEVs, which has led to multiple government- and utility-funded initiatives on public infrastructure build-outs.

A Contradiction

Though it’s arguable that the public charge point build-out on behalf of the EV Project has been integral to PEV sales growth (most likely as passive marketing), data from these and other early infrastructure projects has suggested that PEV owners overwhelmingly charge at home rather than at the public points. This fact questions the practicality of these initial public infrastructure investments. Yet, data analyzed from a survey discussed in Navigant Research’s Electric Vehicle Geographic Forecasts report suggests that a lack of charging infrastructure still seems to be the biggest drawback to PEV ownership, as illustrated in the chart below.

Primary Drawback to PEV Ownership, United States: 2015              

(Source: Navigant Research)

What this contradiction appears to indicate is that yes, there is a need and likely a business case for public EVSE, but it needs to be in the right place. The trouble is that building owners are unlikely to invest in EVSE unless they see a need from residents, employees, or customers. And these groups are unlikely to ask for these services unless they have a PEV, which is unlikely if they don’t have places to plug in the PEV. What this all means is that the EVSE industry has to continue to find the right places for both the PEV owner and the building owner—or run the risk of placing infrastructure where it’s unnecessary.


An innovative approach to solving this problem is underway thanks to the efforts of a San Francisco-based non-profit organization, Charge Across Town. In mid-April, the organization launched the Driving on Sunshine campaign, which showcases EVSE company Envision Solar’s integration of solar power and energy storage into a mobile EVSE unit named the EV ARC. The campaign places three EV ARCs at predetermined locations throughout San Francisco for 3-month periods and collects data on site usage. Findings on the data will be used to inform on public EVSE use and determine where units may be most effectively placed for consistent use; units will be donated to sites with the most use.

The charging stations are likely not inexpensive; however, it’s feasible to consider that a utility with big plans for infrastructure development (Pacific Gas & Electric, perhaps) would benefit greatly from a similar approach to siting public EVSE installations. Further, it would provide incredible value to potential host sites in actually determining the efficacy of EVSE placement without the added costs and embarrassment of a never-used public EVSE station.


Hyperloop Glides toward Reality in California

— May 11, 2015

Hyperloop Transportation Technologies Inc. has struck a deal with landowners in central California to build the first hyperloop test track in the world. The track will encompass a 5-mile stretch near the busy Interstate 5 highway between San Francisco and Los Angeles. The idea for a hyperloop as a mode of transportation was popularized by Elon Musk in his 57-page white paper released to the public in 2013. Musk’s vision is a system that is cheaper and operates much more cleanly than California’s proposed high-speed rail while propelling passengers between Los Angeles and San Francisco in just 30 minutes.

Hyperloop systems use magnets and fans to push passenger pods through depressurized tubes at very high speeds. While Musk imagined a system that operates at close to 800 mph, the pilot project (expected to break ground in early 2016) will test at a much more modest 200 mph to demonstrate proof of concept and to conduct additional testing on safety. About 100 miles of track is needed in order to reach the 800 mph speed. Nevertheless, this trial is undoubtedly a huge step forward for the hyperloop industry and comes sooner than most expected.

But at What Cost?

The 5-mile pilot project is estimated to cost about $100 million to build, with most of the funding expected to come from an initial public offering (IPO) by Hyperloop Transportation Technologies later this year. With a 400-mile distance between Los Angeles and San Francisco, this system would cost about $8 billion to make the full trip between cities (assuming the costs of building the track and pods stay the same). This is still far lower than the expected costs of California’s high-speed rail, which comes in at a whopping $67.6 billion, according to the California High-Speed Rail Authority.

Working out the Kinks

While hyperloop technology offers tremendous potential for unprecedented low-cost, high-speed transportation, there are still some major hurdles for the industry to overcome. Development costs are expected to be very high for this technology, and those costs are not factored into the $8 billion estimate (considers manufacturing costs only). In order to continue developing the pods, capsules, and tubes to become commercially viable, this industry will need considerable cash.

Perhaps the most obvious concern is the nature of the technology itself. Transporting human beings through capsules at nearly 800 mph has yet to be proven a safe venture, and efforts to reduce the potentially nauseating effects will need to be worked out. Whether or not solar panels on the tubes would generate enough electricity to power the propulsion system is another concern of skeptics, such as Roger Goodall, a maglev train expert and a professor of control systems engineering at the United Kingdom’s Loughborough University. For now, Hyperloop Transportation Technologies looks to prove the doubters wrong; thankfully, we won’t have to wait too long to see the results.


How the EPA Proposes to Regulate Carbon with the Clean Power Plan

— May 6, 2015

The U.S. Supreme Court has upheld the Environmental Protection Agency’s (EPA’s) authority to regulate CO2 emissions on three occasions, most recently in 2014. However, its ability to regulate these emissions for existing sources, as enabled by Section 111(d) of the Clean Air Act, has faced some uncertainty regarding the separate interpretation of the U.S. House and Senate in the 1990 Clean Air Act (CAA) amendments. Under the House version, Section 111(d) would prohibit regulation of CO2 from existing sources already regulated under Section 112—which the EPA has done for existing electric generating units (EGUs) under the Mercury and Air Toxics Standards (MATS) rule—while under the Senate version, this conflict does not exist.

Recently, as preparations for the expected final rulemaking continue and legal challenges develop, the discussion has focused on just how Section 111(d) of the CAA may be employed by the EPA to regulate CO2 emissions. Though 111(d) has been used in 13 prior instances, precedent is minimal and its previous applications are of limited import to a proposed rule of this type. Furthermore, while many are familiar with the EPA’s long-standing regulation of hazardous and criteria air pollutants under the CAA, it is often less clear just what 111(d) is for, how it enables the EPA to act, and, most importantly, how it relates to the proposed CPP rule. Briefly, I’ll cover some of those basics here.

Existing Sources

Quite simply, Section 111(d) enables the EPA to regulate emissions from existing sources that produce emissions that threaten public health or welfare and are not otherwise regulated in the CAA. While a necessary endangerment finding for CO2 and other greenhouse gasses was first published in 2009, the EPA has not yet focused a rulemaking on existing sources until proposing the CPP. Beyond that, 111(d) affords the agency the same management strategy detailed in Section 110—e.g., directing states to develop implementation plans to meet national ambient air quality standards. Ultimately, the EPA may initiate a federal plan should a state choose not to develop its own.

Achievable and Demonstrated  

A key distinction in understanding the EPA’s authority under 111(d), as compared with regulating more traditional hazardous or criteria air pollutants, is that the agency must regulate CO2 emissions according to the “best strategy of emissions reductions (BSER)…adequately demonstrated”—a standard of performance the agency may define but that must explicitly consider cost and feasibility. Indeed, this BSER strategy is defined in the CPP as the building blocks, and the reasonability of these proposed strategies has been an ongoing theme during the EPA’s consultation with the states, a theme echoed in recent comments by EPA Administrator Gina McCarthy. As states begin to design potential compliance strategies and debate the reasonability of EPA’s BSER proposition, the design of the CPP and the EPA’s ability to regulate existing plants under Section 111(d) are questions likely to be addressed in the courts following the release of the EPA’s final rulemaking expected later this summer.


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