The Massachusetts Department of Public Utilities, in a Sept. 10 order, approved the Electric Vehicle Market Development Program, subject to certain modifications, that was proposed by Massachusetts Electric and Nantucket Electric, each d/b/a National Grid.
As noted in the order, the companies in January 2017 filed a petition with the department for approval of the Electric Vehicle (EV) Market Development Program (EV Program) and a tariff to recover the EV Program’s costs.
The companies in February 2017 filed revisions to their petition and pre-filed testimony that addressed the proposals’ compliance with the Zero Emission Vehicle Act and removed the companies’ request for pre-approval of the total estimated costs.
The order added that the companies set a target of assisting the deployment of charging stations at 140 sites through the EV Program and estimated that the program would cost about $25m, including a performance incentive the companies would collect if the program results in the development of at least 75% of the target number of sites.
The order noted that in line with efforts in Massachusetts to support EV implementation to reduce greenhouse gas emissions in the transportation sector, the department in December 2013 issued a notice of investigation (NOI) into EVs and EV charging. The order added that among other department policies, the department investigated how electric distribution company (EDC) involvement in EV charging could help facilitate and accommodate widespread adoption of EVs, and the department established a standard of review for the recovery of costs related to EV charging infrastructure.
Further discussing National Grid’s proposal, the order noted that the company requests that the department approve an EV program that recovers costs associated with the design, construction, and funding of two types of EV charging equipment, Level 2 charging stations, and direct current fast charging (DCFC) stations.
The companies’ proposal includes a charging program in coordination with the program’s participants (site hosts); a marketing, communications and education (MC&E) plan to promote the charging program and increase customers’ knowledge about EVs and EV charging; and a research and development (R&D) plan to collect data from the sites developed through the charging program and perform outside research on potential demand response program designs.
The order added that the companies proposed to recover EV Program costs following the end of each program year. Accordingly, National Grid proposed to submit a filing to the department in which it will request approval to recover EV Program costs that were incurred the prior year, plus any prior year reconciliation of costs.
The companies expect to make annual filings on Jan. 15, with a March 1 effective date, the order added. The companies proposed to allocate EV Program costs to rate classes using the distribution revenue allocator (DRA) and collect costs through a rate class-specific volumetric rate. The order also said that the companies proposed to include the EV factors with the distribution kilowatt hour charge on customers’ bills.
The order noted that the department finds that there is a need for increased charging station deployment in the companies’ service territory to encourage EV adoption, which will meet a public policy goal in the interest of ratepayers and the general public. The order said that the department also finds that there is substantial evidence demonstrating that there are significant barriers to the development of charging stations at this time. Accordingly, the department finds that the companies’ proposed EV Program meets a need regarding the advancement of EVs in Massachusetts that is not likely to be met by the competitive EV charging market.
The order also noted that the department finds that the companies will not own or operate EV supply equipment (EVSE) and do not intend to participate in the competitive EV charger market. Further, the department found that there is substantial evidence demonstrating that the EV Program will help facilitate the development of the private EVSE market by supporting the costs to site hosts and allowing site hosts to choose from a range of technologies, ownership models, and pricing approaches. As such, the order added, the department finds that the companies’ proposed EV Program will not hinder the development of the competitive EV charging market.
The order also said that while the record contains compelling evidence regarding the benefits that the proposal may provide to the companies’ customers, whether they use EVs or not, and the general public, the support provided for specific components of the EV Program and the recommended modifications of the program put forth by the intervenors in the matter warrant further discussion.
For instance, the companies propose to target site hosts for “Level 2” charging stations at locations with long-dwell time parking patterns that match the speed for charging with the existing parking patterns. Those locations include public parking areas, multi-unit dwellings, and workplaces, the order added. The department finds that multi-unit dwellings and workplaces are important charging locations because they provide owners with regular access to EV charging away from home, the order said.
The success of the proposed EV Program is based on the companies’ ability to obtain site hosts, and, therefore, the department will not restrict EV charging locations. However, the order added, the department finds that it is in the public interest for the companies to select site locations that are publicly accessible, and therefore, the companies are to give priority to site hosts who serve the public at large.
The department directed the companies to prioritize the selection of Level 2 EV charging sites in this order:
- Public parking areas such as garages, parks, and stadiums
- Workplaces and multi-unit dwelling parking areas that the public can access, including colleges
- Parking areas at workplaces and multi-unit dwellings
The order also said that in the companies’ proposal, the EV Program would recover the costs necessary to install five DCFC stations on National Grid’s properties to test the potential to manage the demand impacts of those stations through onsite technology.
For the purpose of studying the data from those five stations, National Grid proposes to build the charging stations at its own properties, which do not meet the criteria of high-traffic locations. Since the five R&D DCFC stations would not serve the same charging needs as DCFC stations in their most suitable locations, the assertion that the use of the DCFC stations would provide useful data for future demand response programs is questionable, the order added.
The department finds that the companies have provided insufficient evidence to demonstrate that the cost of the proposed deployment of five DCFC stations for R&D is reasonable or in the public interest, the order said.
The department will allow cost recovery for analyzing EVSE data and researching potential demand response programs as proposed in the R&D plan and disallow cost recovery for the five DCFC stations proposed in the R&D plan, the order said.
Further discussing cost recovery, the order noted that the department will review EV Program expenditures annually to review the actual expenditures to determine if they are reasonable and prudently incurred. All costs recovered from ratepayers for any expenditures determined to be imprudent are to be refunded through the reconciliation component of the EV Factors, with associated carrying charges, the order said.
To assist the department in its review of EV Program costs, and to ensure that double recovery does not occur, the department directs the companies to develop and propose a rigorous protocol to demonstrate that the expenses are incremental to the costs already recovered through base distribution rates, the order said.
Among other things, the order noted that while the companies propose to include the EV Factors with the distribution kilowatt hour charge on customers’ bills, the EV Program is a public policy initiative and therefore, the department directs the companies to implement the EV Factor as a separate line item on a customer’s bill. The companies may collect the costs that they incur to implement the EV Factor as a separate line item through the annual EV Program cost recovery filing.
Noting that the department has denied cost recovery of the company owned DCFC stations in National Grid’s R&D Plan, as well as cost recovery for the proposed education campaign, the order said that the companies are directed to file for cost recovery consistent with certain directives included in the order. For instance, the companies are to include that, for billing purposes, the EV Factor will be a separate line item on a customer’s bill, the order said.