Rate Counsel Says Utilities Can’t Spend a Dime of Ratepayer Money on EV Charging Infrastructure

Division files to block PSE&G and ACE from investing $364 million and $42 million to build out charging infrastructure in their respective territories
Credit: Gerd Altmann via Pixabay
Electric-vehicle charging station ahead.

The state Division of Rate Counsel is seeking to block two utilities from spending hundreds of millions of ratepayer dollars on programs to build out the infrastructure needed to electrify the transportation sector.

In separate filings with the New Jersey Board of Public Utilities, division director Stefanie Brand is asking the agency to mostly dismiss proposals by Public Service Electric & Gas and Atlantic City Electric to invest $364 million and $42 million to build out charging infrastructure in their respective territories.

The electrification of the transportation sector is a top clean-energy priority of the Murphy administration, and also one that New Jersey is obligated to undertake under various state laws, including one enacted by the governor this past January. Many clean-energy advocates have criticized the slow pace in electrifying the sector, the biggest source of greenhouse-gas emissions.

PSE&G agrees with that assessment. “New Jersey lags other states in EV adoption and charging infrastructure, standing dead last among the zero-emission-vehicles states in EV adoption rate,’’ said Michael Jennings, a spokesman for the utility. New Jersey is one of about a dozen states that have committed to getting more plug-in electric vehicles on the road.

Private sector willing to tackle task

The issues raised by Rate Counsel revive an ongoing debate during the time the bill made its way through the Legislature: What and how big a role should the state’s utilities have in building out charging infrastructure — especially when there is a robust competitive private sector willing to do the work.

Brand has consistently resisted allowing utilities to use ratepayer funds to electrify the sector, but in her filings, she argued the two-decade-old law deregulating the energy sector and the more recently signed Plug-In Vehicle Act prohibit using ratepayer funds to finance competitive services.

“There is no legal authority for what they are asking,’’ Brand said in a telephone interview. “People don’t have extra money at this time to pay for this,’’ she said, referring to the economic disruption caused by the COVID-19 pandemic.

“Other than tapping a special clean energy fund for ‘rebates to help motorists buy electric vehicles,’ the PIV Act does not authorize or direct the board (BPU) to allow the investment of any ratepayer funds on its implementation,’’ Brand said in her motion to dismiss the bulk of ACE’s electric-vehicle proposal.

ACE acting within law?

In response, Atlantic City Electric said in a statement it is confident “that the EV programs we have proposed are entirely consistent with the legislation signed into law earlier this year and are critical to helping New Jersey meeting its environmental goals, reduce its carbon footprint and bring cleaner air to our communities.’’

Others backed the utilities’ push to get involved and oppose Rate Counsel’s position.

“It seems to be ill-informed,’’ said Pam Frank, CEO of ChargEVC, a not-for-profit coalition of groups pushing for an aggressive strategy to electrify the transportation sector. “The space is big enough and complex enough for a role both for the utilities and the private sector.

PSE&G, which wants to install 40,000 charging stations over six years, agreed. “Utilities should lead the drive to electrify the sector — cars, buses and trains — by investing in a universal EV-charging infrastructure,’’ said  Jennings.

“Rather than undermining competing EV service providers, PSE&G is seeking to be the charging provider of last resort to ensure that markets underserved by private providers, like low-income communities, have access to EV charging,’’ he said.

Funding competition with ratepayer dollars

Brand disputed that point. “PSE&G’s program would use ratepayer funds to allow PSE&G to undercut competitors, eliminating their ability to provide those services at competitive prices without ratepayer funding,’’ she said in her filing.

Several environmental organizations have won approval to intervene in the ACE case and its proposal. “We need to get the utilities to come in and start moving the infrastructure forward,’’ said Jeff Tittel, director of the New Jersey Sierra Club, one of the groups.

In general, the utilities’ programs would involve financing installation of charging equipment at homes, workplaces and multifamily dwellings, as well as for fleets of vehicles and helping the state electrify buses in urban areas.

Both of the utilities propose to recover costs for installing infrastructure charging equipment that would not be owned by the company, a violation of state law, according to Brand. “The law is clear that ratepayers can only pay for utility property that is used and useful for safe and adequate service,’’ according to her filing.

The rebate provision in the law signed by Murphy in January allows $30 million a year to be used to provide $5,000 rebates to consumers to buy electric cars. It projects the program will cost $300 million over 10 years.

The new program is just the latest ratepayers have been asked to fund. In the past few years, ratepayers have absorbed increases in bills to pay for utility upgrades to their electric and gas distribution systems; to fund the state’s solar program at a cost of a half-billion dollars a year; and to help avert the closing of New Jersey’s three nuclear plants ($300 million annually).

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