The New York State Public Service Commission, in a Feb. 7 order, adopted a “consensus proposal,” with modifications, that seeks to encourage statewide deployment of new, publicly accessible direct current fast charging (DCFC) facilities by implementing an annual declining per-plug incentive program.
As noted in the order, a joint petition was filed on April 13, 2018, by the New York Power Authority (NYPA), New York State Department of Environmental Conservation (DEC), New York State Department of Transportation (DOT), and New York State Thruway Authority (NYSTA) – collectively referred to as the joint petitioners – seeking rate relief to encourage the statewide deployment of DCFC facilities for electric vehicles (EVs).
The joint petition requested that the commission direct investor-owned electric utilities (IOUs) to modify their tariffs such that DCFC customers would:
- Qualify for service under a non-demand billed service classification
- Be exempt from any kilowatt or kilowatt hour limit that would jeopardize their entitlement to take non-demand billed service
- Be provided a one-time opportunity to elect to take service under the applicable demand-metered service classification
The commission added in its order that on April 24, 2018, it began the proceeding to consider various EV-related issues, such as those raised in the joint petition, as well as the role of the IOUs in providing infrastructure and rate design to accommodate the needs and electricity demand of EVs and EV supply equipment. The commission said that it also directed state Department of Public Service staff at that time to convene a technical conference to consider various topics. Staff in July 2018 hosted a technical conference, in collaboration with the New York State Energy Research and Development Authority (NYSERDA), to solicit stakeholder input, identify issues to be addressed, and establish the scope of a subsequent staff whitepaper.
The commission added that in August 2018, its secretary issued a notice seeking post-technical conference comments and announcing a subsequent working group to address rate design principles to be applied to EV charging stations. Those discussions led to a subsequent stakeholder engagement process, which was led by NYPA and Consolidated Edison Company of New York (Con Edison), and resulted in the development of a consensus proposal among several entities.
Con Edison, Central Hudson Gas & Electric (Central Hudson), New York State Electric and Gas (NYSEG), Niagara Mohawk Power d/b/a National Grid, Orange and Rockland Utilities (O&R), Rochester Gas & Electric (RG&E), NYPA, DEC, DOT, NYSERDA, and NYSTA – collectively referred to as the consensus parties – in November 2018 filed the consensus proposal, which seeks to encourage statewide deployment of new, publicly accessible DCFC facilities by implementing an annual declining per-plug incentive program.
The incentives, as proposed, would be available for each IOU to address the short-term economic challenges of installing publicly available and affordable DCFC stations, due to the nascent EV market in New York.
The commission added that it finds that the per-plug incentive programs developed by each utility are appropriately sized to encourage DCFC station development in a cost-effective manner.
The commission noted that by directing an interim review process, it will ensure that the deployment goals of those programs are met with the most efficient use of ratepayer funds, while providing the right system benefits in the most beneficial locations of the distribution grid, and in a manner best suited to accelerate market-based deployment.
The DCFC facility deployments spurred by those incentives will help to achieve the state’s zero-emission vehicle (ZEV) goals, and advance the state energy plan’s targets of reducing greenhouse gas (GHG) emissions 40% below 1990 levels by 2030, and 80% below 1990 levels by 2050.
Further discussing the consensus proposal, the commission noted that according to the consensus parties, the proposal would:
- Provide an annual declining per plug incentive to qualifying DCFC station operators for about seven years
- Require service to be provided under a demand-metered classification
- Pay the incentive on a per-plug basis for each plug with simultaneous charging capability of at least 50 kW
- Provide a higher incentive for plugs capable of simultaneously charging at 75 kW and above, in order to provide a greater incentive to install plugs with faster charging capability
The total number of plugs across all utility service territories that may receive an incentive would be limited to 1,074, and the maximum potential cost of the per plug incentives over the proposed seven-year term of the program would be about $28m. The commission added that the consensus parties request that the IOUs be authorized to recover the costs of that program with interest, including applicable incremental administrative costs.
Among other things, the commission said that under the consensus proposal, 1,074 new plugs may be eligible to receive annual incentives. Ratepayer funds must be put to maximum benefit to accomplish the goals of the program, which is critical if the clean energy parties – namely, NRDC, Sierra Club, and Acadia Center – are correct in arguing that nearly 5,000 DCFC plugs may be needed to support New York’s ZEV target, the commission said. Providing ratepayer-funded incentive payments to existing chargers is inconsistent with the program goal, the commission said, adding that it adopts the proposal that the per-plug incentive only be available to newly built chargers.
Of its interim review, the commission noted that that review will begin by Oct. 1, 2023, or when each utility has completed applications for 45% of the total number of plugs eligible in their territory, whichever is earlier. The purpose of the interim review process is to consider changes to the program that may include more efficient incentive structures, methods of better capturing system benefits, or acceleration of market-based deployment, the commission said.
The commission said that to inform that interim review, it directs each utility to submit a detailed annual report by March 1 after completion of each program year, with that report detailing, for instance, the cumulative number of plugs for which the utility has received applications.
Discussing program costs and recovery, the commission said, in part, that it is mindful of imposing incremental collections on ratepayers to motivate the DCFC market, and therefore adopts multiple intervenors’ (MI) recommendation to use Clean Energy Fund (CEF) funds to fund DCFC plug incentives in principle. The commission said that instead of CEF collections, it directs the use of identified unencumbered, uncommitted NYSERDA legacy funds – i.e., remaining system benefits charges – to fund those DCFC per-plug incentives for those customer classes that have contributed to the SBC.
The IOUs are directed to develop a surcharge mechanism for customer groups that did not contribute to the SBC, the commission said, adding that the surcharge is to be developed by dividing total program costs by the total annual delivery kWh for each IOU. That surcharge is to be administered to all non-SBC paying customers for a period of one year, starting Jan. 1, 2020, the commission added.