Impact to the transmission system performance, if any, stemming from the connection of new electric vehicle charging stations to the local utility should be managed the same as with any increase in demand, such as from a new Starbucks, according to NRG Energy (NYSE:NRG).
Green Mountain Energy, Energy Plus Holdings and Reliant Energy Northeast, collectively NRG Retail Affiliates, which are wholly owned subsidiaries of NRG Energy, submitted comments in response to the New York Public Service Commission’s May notice seeking comments to review policies that may affect consumer acceptance and use of plug-in electric vehicles (PEVs).
The NRG Retail Affiliates said in their July 8 comments to the PSC that the connection of new charging stations to the local utility are a normal increased demand to the distribution network just like any commercial development in a service territory.
“Impact to transmission system performance – if any – should be managed the same as with any other increase in demand, whether from Starbucks, downtown office buildings, or a new housing subdivision,” NRG said.
Electric vehicle charging companies (EVCOs) and utilities have a means of communicating where and when PEV charging facilities are being installed, as normally occurs with any service connection request for new commercial development within a service territory.
NRG added that by comparison, hundreds of Starbucks have opened in New York over the last 20 years, with electric outlets for users of mobile devices to plug into. Yet, the PSC did not undertake a policy review to address the impact to the electric distribution system of the expansion of Starbucks.
“The increased energy demand was handled in the normal course of the utilities’ procedures for commercial service connection requests,” NRG continued. “The same procedure applies to PEV charging facilities.”
Any impact to distribution facilities or costs resulting from charging stations should be managed in the same way that the system currently responds to customer growth and demands on the system. As appropriate, NRG added, system-wide upgrades that benefit the overall reliability of the distribution network should be socialized.
On whether additional metering policies or protocols, including submetering, may be needed to accommodate various electric vehicle charging equipment (EVCE) options, NRG said there is no reason to separately meter the PEV charger, just as there is no reason to separately meter an air conditioner or other electric consuming devices. “The charger makes charging the electric vehicle safe; it is not producing electricity,” NRG said.
Among other things, NRG said the PSC’s appropriate role in PEV charging should be more about fostering and less about regulating this energy and environmental policy category.
Also, the PSC must think differently about the consumer transaction between PEV owner and the charging station compared to the purchase of electricity supply for a premise from an energy service company (ESCO) or distribution company. EVCOs provide charging stations for the purpose of allowing customers to “refuel,” and are not selling electricity, NRG added.
The PSC should not assert jurisdiction over charging stations and their operators, and public charging stations as well as their operators should not be subject to rate regulation, NRG said.
Furthermore, the PSC should not allow New York distribution utilities to own or operate PEV charging stations regardless of separation from regulated operations. NRG added that the utilities should focus on their core business and franchise responsibility.
“The competitive market is best positioned to respond to customer demand and invest in the development and operation of charging stations, in a manner that does not require complicated and socialized cost-recovery mechanisms,” NRG said.
According to the filing, NRG subsidiary, NRG EV Services, d/b/a eVgo, is the developer and operator of “the nation’s largest network of direct current (DC) fast chargers for battery-electric vehicles.”
NRG also said that eVgo is committed to investing about $150m of private, non-ratepayer capital in EV charging.
Bulk power impacts ‘not likely’ in foreseeable future
Bulk power impacts resulting from PEV use and charging are not likely in the foreseeable future, according to Central Hudson Gas & Electric, Consolidated Edison Company of New York, New York State Electric and Gas (NYSEG), Niagara Mohawk d/b/a National Grid USA, Orange and Rockland (O&R) and Rochester Gas and Electric (RG&E) – collectively, the joint utilities.
“While adoption rates for PEVs have steadily grown over the past few years, present levels indicate that PEVs and EVCE will not impact the system for some time and therefore do not need to be immediately addressed in the utilities’ transmission plans,” they said in their July 8 comments.
That is due, in part, to the fact that electric system impacts from PEVs are expected to be localized on the distribution system in areas where PEV use is clustered, they said, later adding, “[T]he joint utilities anticipate a distribution level impact on the electrical system as opposed to the transmission level and will make system improvements accordingly.”
The joint utilities further noted that customer upgrades to the electric system as a result of EVCE installation should be treated akin to other upgrades on the system.
Generally, delivery service costs for customers are recovered through rates and under utility rate plans, customers with greater usage have higher bills. Consequently, to the extent that a customer’s EVCE increases his/her usage, the delivery and commodity portion of the bill will increase accordingly.
They also said the PSC should not exercise jurisdiction over the operation and end-use of charging stations, noting that the use and operation of charging stations is best characterized as a consumer-charging service instead of the sale of electricity.
They also noted that it is not in the public interest for the PSC to assert jurisdiction over charging stations as it has the potential to inhibit the market for competition and innovation. The PSC’s jurisdiction over charging stations would likely impose additional administrative burdens upon charging station owners/operators, such as filing a tariff, which may deter marketplace participation.
The PSC, they added, should allow utilities the flexibility to own and operate charging stations in situations where appropriate, either as part of their regulated ownership or as non-utility operations.
Among other things, they said they do not foresee solar photovoltaic (PV) production as a viable near-term energy source for charging stations, noting that the intermittent nature of solar PV production may affect the ability to adequately charge a PEV in instances where solar PV output is limited.
Central Hudson’s holding company is CH Energy Group (NYSE:CHG). Con Edison and O&R are subsidiaries of Consolidated Edison (NYSE:ED). NYSEG and RG&E are subsidiaries of Iberdrola USA, which is a subsidiary of Iberdrola S.A. National Grid is a subsidiary of National Grid plc.
Research, technology demonstration programs needed
In its comments, the New York Power Authority (NYPA) said it advances the position that EVs have the near-term capacity to be a load that is controllable by the electric utility.
“The PSC should encourage electric utilities to engage in research and technology demonstration programs to develop smart electric vehicle chargers that can respond to grid conditions,” NYPA said. “For example, in the event of a brown-out, the electric vehicle loads could be selectively shed off these areas of the distribution system. Once grid stability is restored, these loads would intelligently be picked up again.”
NYPA also said that since vehicle charging is a multiple-hour event, it is possible that such load shedding could be done for short periods of time without inconveniencing the end-users.
NYPA also said that public and workplace charging stations should not be regulated by the PSC, adding that that would allow the host sites of those systems the flexibility to experiment with various end-user pricing models to find the best fit for all parties.
Regarding the possible ownership of charging stations by regulated electric utilities, NYPA said PSC oversight should be required, noting that the charging station would become part of the calculation of the utility’s monetary return on assets.
EV industry growing in New York, yet still in infancy
The New York State Energy Research and Development Authority (NYSERDA) said in its July 8 comments that a study it completed in 2011, working with the Electric Power Research Institute and Con Edison, found modest to little impact on transmission systems during the early stages of EV market development.
“Modeling performed and included in the report found that even in aggressive EV adoption scenarios, where 5% to 10% of all cars are electric vehicles, some of the most heavily used circuits in New York City area would only require typical levels of transformer upgrades to handle the increased load from electric vehicle charging,” NYSERDA said. “This level of investment was within regular near-term horizon investment levels.”
However, NYSERDA said it believes that distribution system issues should be considered as charging station installations may be concentrated in load pockets. The study found that the impact of PEV charging is largely found at the distribution level. When factoring in average driving habits, average charging energy per vehicle is 5.1 kWh, NYSERDA added.
While the EV industry is growing in the state, it is still in its infancy, NYSERDA said, adding that it supports the encouragement of business models that support sustainable private sector investment.
“To that end, the commission should be cautious about prematurely establishing regulatory policies that might have the unintended consequence of discouraging or making more difficult private sector investment in electric vehicle charging stations,” NYSERDA said.
However, that is not to say that there are not areas, such as technology standards and consumer protections, where regulation may be needed and appropriate.
NYSERDA also said it recommends that the PSC not assert direct jurisdiction over ownership of EV charging stations, adding that public EV charging stations are likely to be owned and operated by any entity that owns a parking lot or structure, including municipalities.
NYSERDA also said that while it does not take a position on whether the PSC should allow electric distribution utilities operating in the state to own or operate EV charging stations, it does recognize that third-party studies may be informative in shaping the state’s policies.
Few states have taken positions on the issue, NYSERDA added. California state regulators, for instance, restricted utilities from owning EVSE while Oregon state regulators concluded that utilities should be able to invest in EVSE and operate PEV charging stations.
Among other things, NYSERDA noted that it has awarded $8m over the past year to support the installation of about 900 EV charging stations across the state.