Pennsylvania's breakthrough collaboration of private sector, utility, legislative and regulatory leaders may be the template for a national transportation electrification program that can drive the next wave of market expansion.

Supportive policies in California, New York and Washington have led to market-leading EV sales. But policymakers in states like Ohio, Maryland, New Jersey and Pennsylvania are working on laws, regulations and guidance to drive the next stage of growth. Some say Pennsylvania has put together the right mix.

Pennsylvania has already taken three big steps. The Department of Environmental Protection (DEP)-led Drive Electric coalition drafted an EV Roadmap. A November Public Utility Commission (PUC) ruling clarified private sector charger providers' rights to set their own prices. And a utility's pilot charger deployment proposal was endorsed by a major private provider because of the principles it embodies.

ChargePoint, the global charging station leader, supports the six Guiding Principles in the Duquesne Light Company proposal to own and operate charging stations, Director of Policy Kevin Miller told Utility Dive. Among current state policy efforts, these principles "are a landmark in utility program design because they allow utilities to complement the competitive market and increase customer choice," he said.

Growing EV markets

The PUC ruling, the Drive Electric Pennsylvania coalition's collaboration and the Duquesne Light proposal's principles are the kinds of things that grow EV markets, Miller said. The Duquesne principles are particularly important because they "preserve site host control over charging stations" and, therefore, "fit with the many kinds of programs needed for the many different kinds of utility service territories."

A further element in the mix, and a prime focus of the collaboration, has been House Bill (HB) 1446. It would accelerate electric vehicle (EV) adoption, charging station deployment and supporting policies. It did not get out of committee in 2018, but Republican Senators Bob Mensch and Robert Tomlinson have announced a new push is coming in 2019, Natural Resources Defense Council (NRDC) Transportation Policy Analyst Noah Garcia told Utility Dive.

HB 1446 could "help Pennsylvania stake out a leadership position in electric vehicle policy nationally," Advanced Energy Economy (AEE) Market Development VP Matt Stanberry emailed Utility Dive. By making clear the state's commitment, "it would provide an important welcoming signal for new investments."

Though still in its early stages, the national transition to electricity-powered transportation is accelerating, with more EVs sold and charging stations deployed every year. The U.S. now has more than 1 million EVs on its roads, with California in the lead, followed by New York, according to the Edison Electric Institute.

"We're at a tipping point toward mass adoption of transportation electrification and states are working on the many ways utility programs can be structured to complement the private market." Kevin Miller Director of Policy, ChargePoint

But it is Pennsylvania, 12th in 2017 EV sales, where the combination of guiding principles, legislation and collaboration among utilities, private providers, policymakers and regulators may add up to a template for how to move the market into its next phase of development.

"We're at a tipping point toward mass adoption of transportation electrification and states are working on the many ways utility programs can be structured to complement the private market," Miller said. "The question is not who owns the assets but how ownership and operation of the station work, and in the PUC ruling, the Duquesne filing and the Roadmap, Pennsylvania is starting to work that out."

Pennsylvania's EV market share is tiny, but growing PA Department of Environmental Protection EV Roadmap

HB 1446 enthusiasm

HB 1446 formally sets a goal of increasing transportation electrification in Pennsylvania 50% by 2030, along with the companion regulations and policies being developed by the Pennsylvania collaboration. It has stakeholders who work in other emerging-market states enthusiastic.

The bill would require "substantial planning" and "statewide goals" for infrastructure deployment, including planning for urban, suburban and rural regions, the latest EV policy update from the North Carolina Clean Energy Technology Center (NCCETC) reported. Investor-owned utilities (IOUs) would be allowed cost recovery for infrastructure expenditures. The state's Department of Transportation would be required to develop a high-speed charging station highway network.

HB 1446 has four objectives, Energy Policy Manager Tom Bonner, of Exelon subsidiary PECO Energy, told Utility Dive. One is to build a well-planned, publicly accessible charging network. The second is to move electrification beyond passenger vehicles to larger vehicles and fleets. The third is to put rates, programs and advanced chargers in place that encourage smart charging and move the new load away from peak demand periods. The fourth is to allow utilities to deploy charging where the private market cannot.

The charging infrastructure deployment by utilities at the center of the bill "is a big factor in nascent markets," NCCETC Senior Manager of Policy Research Autumn Proudlove told Utility Dive. "Utilities have greater access to capital and rate recovery lowers their risk, so it can be easier for them than for private entities. Their deployments can stimulate EV sales, and move the market forward, and their proposals often include new rate structures or rebate programs."

The bill would create "a logical process for the state to understand its charging infrastructure needs and evaluate charging infrastructure proposals," AEE's Stanberry added.

HB 1446 is endorsed by "utilities, environmental organizations, auto manufacturers, equipment manufacturers and the transit community," Bonner said. It strikes a key compromise between utilities and the private sector on charging station deployment because it recognizes "the goal is not for utilities to build infrastructure, but to facilitate the market."

Pennsylvania utilities support the bill because it will modernize transportation in the state and make electricity a transportation fuel, NRDC's Garcia said. Opposition to HB 1446 has come from three directions: Retail electricity provider concern about competition from charger companies, some charger companies' concerns about competition from IOUs and constituent backlash toward lawmakers for supporting a utility-backed bill.

"In strong markets, the best thing is for utilities to help bring down the cost of deployment through partnerships in which utilities build all the hardware up to the charger. But where the utility thinks it's best for them, or where the economics make utility ownership better, we are willing to partner." Jonathan Levy VP of Strategic Initiatives, EVgo

A key provision of the bill that could win more lawmaker backing is its enabling of utility partnerships with individual rural counties, according to Garcia, who has worked on EV policy in New Jersey and other next wave states. "That would drive deployment of charging infrastructure, local economic development and education about the benefits of transportation electrification."

Charger operation, ownership

EVgo VP of Strategic Initiatives Jonathan Levy told Utility Dive he was equivocal about whether utilities owning and operating chargers is the best way to get widespread transportation electrification. In contrast to Miller, his equivocation suggested a concern that utility ownership might limit private sector activity.

More charger deployments and a competitive market "are positives for consumers" because "a rising tide will lift all boats," Levy acknowledged. "In strong markets, the best thing is for utilities to help bring down the cost of deployment through partnerships in which utilities build all the hardware up to the charger. But where the utility thinks it's best for them, or where the economics make utility ownership better, we are willing to partner."

There has been "a good mix" of policy proposals across the country for utilities to own charging stations or for utilities to only build the make ready and leave the charging station to private providers, NCCETC's Proudlove said. A make ready is the electrical infrastructure that connects the charging station to the local distribution system.

Stakeholder agreement on a "Pennsylvania model" seems to be taking shape in HB 1446 and regulatory filings. It would limit utilities to building make readies where there is a strong private market but allow them to build make readies and chargers in underserved markets, she added.

It is the emerging agreement being defined through a group of policies and regulations that sets Pennsylvania apart, NRDC's Garcia said. "HB 1446 is absolutely necessary, but not sufficient, to jumpstart the EV market in Pennsylvania, and grow it in a way that benefits utility customers, the grid and the environment."

The PUC filing and the DLC filing are also important. DLC's pilot puts Pennsylvania "on the map" of states with EV-supportive policies and "complements" other regional policies and HB 1446, he blogged at the end of December.

Pennsylvania's EV sales are growing 36% per year PA Department of Environmental Protection EV Roadmap

The PUC ruling and Duquesne Light filing

On November 8, the PUC unanimously ruled privately-owned EV charging stations' services should not be considered a resale of electricity. This allows charger owners, whether site hosts or charger providers, to set their own prices instead of being regulated like utilities. It also makes clear that electricity is just one component of their recharging and parking services.

"HB 1446 is absolutely necessary, but not sufficient, to jumpstart the EV market in Pennsylvania, and grow it in a way that benefits utility customers, the grid and the environment." Noah Garcia Transportation Policy Analyst, NRDC

In addressing these two key issues (docket M-2017-2604382), the ruling "is intended to provide a level playing field" for charger suppliers and "promote increased investment in EV charging infrastructure," according to the PUC.

"This landmark ruling goes a long way to spurring EV adoption in Pennsylvania because it recognizes the paradigm shift in transportation electrification," ChargePoint's Miller said. "Over 90% of charging still takes place at home and work, but 10% is now from public chargers at destinations like grocery stores and retail centers regulated under the decision."

Duquesne Light's general rate case included EV ChargeUp, a $2 million-plus, five-year pilot program. The program's final settlement includes a "Fast Charging Evaluation" that will invest $500,000 in fast charging stations and make ready infrastructure owned and operated by the utility for electric buses.

It also includes a "Level 2 Charging Evaluation" that will invest $1.3 million in make ready infrastructure for private providers' charging stations. Capital expenditures and rebates for these evaluations will be eligible for rate recovery.

Duquesne Light's proposal won support from stakeholders and charger providers "because its Guiding Principles ensure that the pilot will complement and support the market and will not pick winners and losers," ChargePoint's Miller said.

The six Guiding Principles assert that EV pilots should support state and local EV policies and goals. The charging market must stay "competitive" and "neutral" by allowing site hosts choice and control over their equipment and network services. All equipment must be safe and well-maintained, pilot data must be public, and costs must be managed.

The Roadmap

The Pennsylvania EV Roadmap is being developed by the DEP's Drive Electric coalition. It details the state's current EV market, proposes new strategies, and models future market scenarios. It is a supporting document that helps lawmakers considering HB 1446 see where the state's executive branch wants to go and provides data to support that direction, stakeholders said.

None of those interviewed for this story could explain what has delayed DEP's release of the Roadmap's final version. There was informal speculation that it had something to do with HB 1446 politics.

"A Roadmap is critical for any state to know where it stands," ChargePoint's Miller said. This Roadmap helps define a transformational role for Pennsylvania's utilities and the Duquesne Guiding Principles "would be a valuable addition."

Pennsylvania had only 0.6% of the 2017 U.S. EV market, but has increased its EV sales 36%/year since 2011, according to the Roadmap's EV market data. The state would need 22,800 level 2 chargers and 810 direct current fast chargers (DCFCs) to support a 20% EV market share by 2030, but has only 6% of the needed level 2 chargers and 18% of the needed DCFCs.

The Roadmap's near-term strategies include setting official statewide sales goals, expanding rebates and establishing marketing, education and dealer programs. It also calls for expanded fleet electrification and a statewide plan for charger deployment.

Farther out, Pennsylvania will need EV-supportive electricity rate designs, along with expanded charger investments and programs. In the long term, the state will need more charger infrastructure financing and EV-ready building codes.

Four future scenarios show EVs could range from 7% to 31% of the state's light-duty vehicles by 2033, and the difference will be in how successfully stakeholders implement EV-supportive strategies, the Roadmap reports.

The strategies follow widely-accepted best practices. September's Regulatory Plan for America's Electric Transportation Future, from national think tank Advanced Energy Economy, identifies similar strategies. July's Driving Adoption, Capturing Benefits, from GridWise Alliance, describes similar benefits.

For stable and scalable EV and charging market growth, there are vital steps and Pennsylvania seems to be taking them, ChargePoint's Miller said. "Momentum is growing in the collaboration of regulators and lawmakers, and utilities like PECO and Duquesne will play a vital role in this mobility revolution by investing in and deploying a world class portfolio of solutions for passenger vehicles, buses and trucks."