Blog Post

New EV Charging Stations Funded by Ratepayers Equals Bad Deal for Californians

As more electric vehicles (EVs) are hitting the roads, it is no secret that the demand for EV charging stations is increasing across the country. What most people are unaware of is how the electric power utility companies plan to fund the installation and expansion of EV chargers. Policymakers are looking for ways to help expedite the adoption of EVs, and rightly so. However, current policies are hindering the expansion of a robust charging network and inequitably disadvantages California’s lower-income communities.

Announced last week Southern California Edison (SCE) has been authorized to fund and build 40,000 EV chargers over four years at a total price of $436 million. While this may seem like a positive step forward, what most people don’t realize is the bill will be paid by all of SCE’s monthly customers. This means that regardless of whether the customers are EV drivers or not, users of electricity at home and at work will bear that cost.

The SCE’s Charge Ready program is the largest utility-led investment in EV infrastructure in the country. That also makes it the largest program to be funded solely by the customers of the power company. At a time when we’re already seeing rising power bills, they are about to get even higher. It should not be the responsibility of non-EV owning drivers to cover the cost for more-affluent EV owners. This policy only serves as a regressive tax on California’s most price-sensitive communities, including those living on fixed incomes and working-class families.

Aside from an inequitable distribution of costs and benefits, there is little reason to believe that the program will actually meet the rising demand for EV charging stations. Instead, it will serve as a disincentive to much-needed private investment in this type of infrastructure. As a result of this program, the business sector will be less motivated to risk capital in the expansion of EV chargers as they simply cannot compete with the vertically-integrated utilities that can spread costs across an entire customer base.

To be clear, the private sector wants to meet this demand and is perfectly positioned to do so. Other gas station companies/convenience stores, such as Wawa have already exceeded 1 million charging sessions and 7-Eleven is planning on installing 500 chargers across the country. With ideally-located real estate for refueling and secondary services such as restaurants, bathrooms, and convenience stores already in place, the private market stands ready to work with policymakers and utilities to find solutions that allow all stakeholders to focus on what they do best. Utilities should generate the power and distribute it to retailers; retailers should deliver it to end-users – a system that mirrors the highly successful current fuel distribution model.

Accommodating EV drivers for future expansion is a good thing. However, California will never meet its anticipated EV charging goals and will always be playing catch-up if policymakers continue pushing anti-competitive programs. And it’s just wrong to fund the EV charging network on the backs of hard-working utility customers when there are more equitable, efficient, and effective pathways forward. Private businesses are eager to sell electricity to EV drivers and the footprint is already in place with the present refueling network. We need to work together to develop a plan that is fair to customers and incentivizes the growth of the EV charging network, not one that grants a monopoly to utility companies.