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On the Road by Jack Kerouac inspired countless
Americans to take road trips across the country, whether in beat-up
automobiles or buses.
The one thing they never had to worry about was running out of
gas.
The electric power sector wants to make sure drivers of electric
vehicles (EVs) are able to experience that dream without fear of
being stranded in the middle of nowhere because there is no place
to charge their car.
A year ago, Ohio-based American Electric Power and five other US
electric utilities began discussing the idea of pooling their
resources to develop a seamless network of chargers across the
nation. These discussions culminated this March with the birth of
the Electric Highway Coalition (EHC), which today has grown to 14
utilities spanning 29 states and the District of Columbia, serving
at least 60 million customers.
President Joe Biden, who has made tackling climate change his
administration's priority, wants to make that dream a reality for
the public. His jobs plan included $15 billion
to build a nationwide network of half a million charging stations,
but the bipartisan infrastructure plan
that the US Senate has approved, and the US House of
Representatives is scheduled to consider no later than 27
September, included just half that amount.
The Edison Electric Institute, which represents investor-owned
US utilities, including those in the EHC, estimates 18.7 million EVs will
travel the roads by 2030, up from 1.8 million EVs registered in the
US at the end of 2020. The EEI also said about 9.6 million charging
ports will be needed to meet the expected surge in EV numbers.
The EHC aims to build DC charging stations that are less than
100 miles apart and capable of getting drivers back on the road in
about 30 minutes. It also envisions a charging station will feature
a least two ports, real-time status reporting for drivers, and
convenient payment.
Net-Zero Business Daily spoke with AEP Chief
Customer Officer Phil Dion about the need for the coalition, its
vision for these stations, and how it intends to finance and
develop a nationwide network.
Source: Electric Highway Coalition
Net-Zero Business Daily: Tell us about the
Electric Highway Coalition, how it came about and why did the six
founding utilities see a need for it?
Dion: A confluence of events brought us
together, but the major one for AEP was the announcement we made to
electrify 40% of our entire fleet by 2030. More importantly, we
said that 100% of our light duty fleet, think of our cars and vans,
are going to be electric by that 2030 date. When we looked at the
map of available charging, however, we found it was really a lot of
Tesla stations—and we realized right away we are not probably
going to be owning Teslas—and the other charging stations were
owned by Electrify America.
(Editor's note: Electrify America is a subsidiary of Volkswagen
Group of America that the automaker launched in late 2016 under a
$2 billion settlement with the US government and the California Air
Resources Board to resolve a diesel emissions scandal. In lieu of
paying fines, the automaker was told to set up a nationwide
charging network and to promote EVs.)
We noticed these charging stations weren't going into some of
the rural areas that we serve, and we were concerned that we have
EVs that will be traversing portions of our service territory and
it didn't look like the market would be taking care of those areas.
So, we began studying our areas and our routes, and essentially
identifying gaps for someone who was going to drive an EV through
that area. Throughout that process, we identified where we could
use Electrify America stations and leverage them, we also noticed
the gaps in our service territory. That is when we began looking at
it from a customer perspective.
And then we reached out to other utilities. At the time, there
were six of us in total. We were all at a similar stage and asking
the same questions. It really made sense for us to coordinate,
since our service territories in some sense share
jurisdictions.
Net-Zero Business Daily: Does the coalition
have EV charging stations goals for 2025 and 2030?
Dion: It is too hard to set goals, because each
utility is a little bit different, each state is a little bit
different. The overall goals of EHC are to traverse the service
territories combined, look at it as one big map if you will, and
ensure we have enough charging stations within a certain number of
miles and ensure there are enough charging stations to make sure
the customer experience is a good one.
You have to allow for little tweaks along the way, but the
vision is that each of the EHC members will have the gaps
identified, as we already did a year ago, and will begin
constructing and putting in place some, not all, charging stations
by the end of the year. And we are looking to wrap up this whole
project in a couple of years to make sure that folks have the
ability to charge.
Net-Zero Business Daily: Given that you have
not set out any goals yet for the EHC, where are your first efforts
being focused?
Dion: Some [EHC] utilities have already begun
construction, as it was part of their state plans. From a
geographical standpoint, it is kind of happening everywhere and may
be accelerated. There's an infrastructure bill under discussion in
Washington. If that goes through, we are trying to leverage all the
VW dollars we can and then we will try to leverage those
infrastructure dollars. If those dollars come through, you will
really see these things accelerate even further because we will
have the capital that we need to move this [network] forward.
Net-Zero Business Daily: What sort of resources
will a utility provide to this network. Will it be responsible for
building the stations or operating them or both?
Dion: Each member will have its own choice.
Actually, each of AEP's operating companies will have its own
choice. But the coalition generally is looking to capitalize or put
the money in for a specific number of charging stations. Again, it
will depend on each one of them. They will need connections to the
electric grid to make that happen. Some utilities will want to own
and operate the charging stations, while others will simply turn to
a partner, perhaps like Electrify America, to run them and be
responsible. But what you will see is perhaps two or three models
that come out in the end: it's where a utility builds it and runs
it, a utility gives money, or a utility partners with someone and
gives a portion of the money.
I think most of us will want to be responsible for the DC
chargers and their interconnections. We will want to make sure it's
a good customer experience because some people will be using these
stations for the first time and we don't want them to fail. I would
imagine most of us will be partnering with somebody else, although
certainly the coalition is free to do whichever approach it wants,
as long as those chargers are of high quality and in the ground
within a certain period of time.
Net-Zero Business Daily: Who's going to fund
these stations? What is the EHC expecting from the federal and
state governments to make its vision a reality?
Dion: We will always leverage federal and state
dollars first. Let's put it this way, if there was a market for
this and people could make money, these already would be built.
Charging station availability is a barrier for EVs on two
fronts: the first is that there are consumers who would buy an EV
except they are worried about range. That is, they sort of look at
[an EV] and say, 'hey, if I can't go on a long journey in my
vehicle and I have to drive far in my vehicle every day and week'
then they won't want to purchase it.
It is very hard in the early stage of EVs to make a
fast-charging station work, so that's where utilities step in. We
often come into areas where we know we are moving for public policy
reasons and we know what customers want, but it just doesn't make
sense for the market to do anything. We sort of jump start the
market, if you will, and get things going.
In other words, if it makes sense for us to invest in charging
stations, and it makes sense to take federal and state dollars we
will, but if there's not enough of it, we will invest our own money
on it because it is important to us.
Net-Zero Business Daily: So, you talk about
having at least two charging stations within a 100-mile distance.
How will that work out for rural areas versus urban areas?
Dion: The fast answer is we are trying to fill
the gaps, whether across the country or across a service area.
Assuming you are in an urban area, you probably have a charger at
your home, or your workplace, and you are not driving 200 or 300
miles a day. You are probably driving 40-60 miles a day, filling up
your gas tank if you will, or I should say electric tank. The
challenge lies in those in-between areas between Indianapolis and
Columbus. How do I get my vehicle charged there? And if someone has
put a charging station there, fine with us, but if there's a gap,
we will fill it. So, I think we see ourselves as providing, as we
often do, electric service to anyone in our territory. So, if you
the customer want to run an EV through our service territory, why
shouldn't you have access to a fast charger, even if you live far
out from a metropolitan area. You shouldn't have to live in the
urban centers to have that luxury.
Net-Zero Business Daily: EVs and charging are a
classic example of a chicken-and-egg situation. With the EHC, are
utilities in the position of driving the EV revolution or are you
responding to automakers or a combination?
Dion: I think we are responding to what we are
seeing, and we are seeing a lot of more of our customers, and
customers across the nation, buying EVs. If you look at the percentages of total car sales
and EVs, they keep increasing. Number one: I would say we are
responding to customers. Number two: we are absolutely responding
to the plans of the auto manufacturers. They tell us they are going
to make all these EVs. Certain brands will be all electric by 2030.
It is a combination of seeing customer adoption rates going up,
along with announced plans of those automakers as well as some of
the announced plans of our policymakers.
Net-Zero Business Daily: What obstacles do you
see in achieving your goal since you have no fixed timeline? Is it
operating costs, siting, permitting?
Dion: We have learned from experience, so it's
not permitting.
And remember, Teslas are all over the place. It's not really
siting. The costs are not exorbitant because of what are doing: we
are just gap filing. I think more than anything else, I think the
hurdles are largely outside our control.
But the one thing that I really do wonder in this is whether we
are too far ahead of the curve. And the reason I say this is
because we don't know what'll happen if we build these stations. If
they get used, that's great. If they are overused and are very
popular then that's a very good problem to have. Sure, the customer
will get a little frustrated in the short term, but we can always
add more charging stations. But what happens if the stations are
underused, and if we really miss the mark, and we have spent our
money and ask the government for funds then it's a big risk.
The biggest risk is not the things you have cited, but the
unknown risk that I probably worry myself about, because as
utilities we really do try to plan and have our items be used and
be useful. That's why it's chicken-and-egg because it is an
uncomfortable position for us to be in because it's a little bit
riskier than we are used to.
Net-Zero Business Daily: Speaking of gas
stations, what about pricing? Who will set the rates? Will they be
based on off-peak demand? How will the pricing be conveyed to the
drivers? Will charging stations be like gas stations, advertising
their rates?
Dion: The fast answer is: it depends. Each
company will probably charge the rates that are on file with its
state regulator. If they have an off-peak program or if they have a
commercial program, they will do it all according to the laws of
their jurisdiction. That one is kind of easy as far as that goes.
It is up to each operating company. Certainly, each utility will
follow the rules.
As far as rates go, I don't think we have got down to that
detail yet, but some places we have EV tariffs, and in other places
we are filing to get those.
It's a great question, and it's another reason to talk to our
customers. I love that!
Posted 09 September 2021 by Amena Saiyid, Senior Climate and Energy Research Analyst