On July 1, 2015, the National Association of State Energy Officials, with support from the U.S. Department of Energy and the Center for Climate and Energy Solutions (C2ES), hosted a workshop for State Energy Offices and Clean Cities Coalitions to discuss barriers and solutions for financing alternative fuel vehicles and fueling and charging infrastructure.
The workshop complemented the findings from NASEO research done on private sector financial solutions to alternative fuel vehicle deployment barriers, and provided an open discussion for relevant stakeholders to brainstorm the best avenues for implementing these funding opportunities.
The following information details some of the discussion points regarding electric vehicles (EVs) and charging infrastructure:
In the realm of EV charging stations, there are short term policies that State Energy Offices can help implement in order to encourage investment. However, in most cases, it takes layers of investment, from both the private and public sectors, to build a compelling business case for investing in electric vehicle charging infrastructure.
The Center for Climate and Energy Solutions has developed an Electric Vehicle Financial Analysis tool, to help individuals evaluate the financial viability of EV charging infrastructure investments involving multiple private and public sector partners. This tool determines returns for certain investments over the expected lifetime of the charging equipment, based on up to 100 variable inputs. This tool is particularly helpful because it gives users the opportunity to run back-to-back scenario analysis, by which users can see tradeoffs with charts, helping them identify which variables will best improve the performance of their project. The tool is also unique in that it evaluates a variety of public sector interventions (such as low interest loans, grants or rebates) in terms of the business case or profitability of those interventions.
The research and modeling done with this tool has found that many compelling opportunities exist for installing DC fast charging along travel corridors to expand range, as well as installing Level 2 charging in neighborhoods that already have a high number of EVs.
Discussants at the conference noted that when evaluating the business case for electric vehicle charging infrastructure, you have to look beyond the direct revenue from charging, and should consider indirect value, measured in electric vehicle sales, retail sales for host sites, and increased tourism. EVs can also lower electricity rates with decoupled utilities, and alternatively, if utilities make a higher profit with increased electricity sales, the augmented use of EVs is also in their interest.
For a variety of case studies and more in-depth discussion on the AFV market state of play and the opportunities that exist, refer to NASEO’s report on AFV & Fueling Infrastructure Deployment Barriers & the Potential Role of Private Sector Financial Solutions.
Transportation Funding with AFVs:
Another hot topic of discussion at the workshop centered on sustainable transportation funding, by way of alternative fuel vehicles that bypass the traditional gasoline tax. As more and more AVFs enter the picture, the gasoline tax becomes less and less a reliable source for funding improvements to the country’s transportation infrastructure.
The Vermont Energy Investment Corporation has released a manual, which suggests an innovative way to approach transportation finance, and to address the shortage of transportation funding head on. VEIC proposes a model for a transportation efficiency utility (TEU), under which a system benefit charge or electric utility tariff on the electric power used by EVs is charged to the user’s bill, and the money is then pooled into a common fund, which is routed to transportation infrastructure funding.
In line with this, the State of Colorado has created a Special Fuel Tax & Electric Vehicle Fee, by which EV drivers are charged an annual registration fee of $50. Sixty percent of the fee replaces the revenue not collected from gasoline taxes and goes toward road and highway maintenance, while the other forty percent funds electric vehicle infrastructure such as charging stations.
Beyond an upfront registration fee, other states have considered implementing a Vehicle Miles Traveled (VMT) tax. The 2013 Oregon Legislatures passed Senate Bill 810, the first legislation in the U.S. to establish a road usage charge system for transportation funding. The bill authorizes the Oregon Department of Transportation to set up a mileage collection system for 5,000 cars and light commercial vehicles beginning July 1, 2015. For those who volunteer to participate, the Road Usage Charge Program, also known as OReGO, will assess a charge of 1.5 cents per mile and issue a gas tax credit as warranted. Participants in the program choose from 3 vendors that provide either GPS or a mileage reporting device for measuring the total miles traveled.
For a full list of enacted, pending, or failed legislation by State on the subject, refer to this transportation finance database by the National Conference of State Legislatures.
Want to stay up to date on sustainable transportation statistics and findings? Make sure to check out the U.S. DOE Vehicle Technologies Office’s Transportation Fact of the Week to read about interesting studies, datasets and observations regarding transportation and alternative fuel vehicles.