New Study: Utility Customers on the Hook for EV Infrastructure Investments
The Energy Marketers of America released a study on Tuesday focused on the costs of electric vehicle (EV) charging infrastructure to support policy-driven increases in the number of EVs on U.S. roads.
Specifically, this study finds that a rapid buildout of an EV charging infrastructure, looking just at new distribution and transmission investments to support EVs making up only 10 percent of the vehicles on the road in the U.S., could cost as much as $146 billion.
Further, if this buildout is funded by the utilities, these costs would be passed along to their customers through rate increases, regardless of whether they own EVs.
The study examined three separate scenarios based on varying EV adoption projections:
— 8.4 million light-duty EVs on the road by 2030;
— 18 million EVs on the road by 2030; and
— 30 million EVs on the road by 2030 (represents approximately 10 percent of the U.S. vehicle fleet).
These scenarios are based on the Annual Energy Outlook 2020, 100 percent EV sales by 2050, and 100 percent EV sales by 2035, respectively. Costs associated with each scenario range from $35.4 billion to $146.2 billion, all borne by utility ratepayers.
Compare that with the local gas station where you fill up.
Energy Marketers of America members own and operate 60,000 retail gas stations across the country. Our members are entrepreneurs who assumed the risks associated with operating a business and must recover investments through customers using the infrastructure.
On the other hand, utilities are able to own, operate and sell electricity through charging stations and pass the infrastructure costs along to millions who may never use those chargers.
If these costs were paid only by EV owners, the study estimates they would roughly equal $5,100 per EV, over an average 10-year on-the-road lifetime.
Put another way, each EV owner would have to pay more than $500 every year for 10 years to cover these costs in addition to the cost of the electricity used every time they fully charge their vehicle.
The study is focused exclusively on the costs associated with EV charging infrastructure buildout only and does not address EV cost-of-ownership factors or other costs required to support EVs such as the need for additional electric generation capacity or more costly forms of generation to reduce emissions generated because of EV charging.
Further, the study’s calculations serve as just one example of the additional financial burden associated with a greater reliance on electrification.
Local government ordinances mandating a switch to electric heat pumps in cold weather regions, for example, would further add to electricity demand, driving up costs for consumers.
The infrastructure and related costs to support these types of mandates are not included in the study. Similar to EV charging infrastructure, utilities will seek to recoup electric heat pump infrastructure costs through increased rates on customers.
“We need fairness in transportation and that includes fueling,” Energy Marketers of America President Rob Underwood said. “Utility customers, particularly low- and fixed-income families, should not be paying for EV infrastructure they may never use.”
“Advancements in vehicle efficiency and carbon reductions in liquid fuels have dramatically reduced emissions in transportation in recent years,” Underwood added. “This study, which shows the high costs associated with elevating one vehicle type over another, demonstrates just how important technology-neutral solutions are to the future of transportation.”
Click Here for a copy of the study.