BPU Straw Proposal Shifts Financing of EV Infrastructure to Shareholders, Not Ratepayers

State agency tackles some of the biggest questions about electrifying transportation sector, specific role for utilities is under discussion
Credit: Francis Ray via Pixabay
Artist’s concept of EV and charging station

The Board of Public Utilities is proposing a plan that addresses how New Jersey builds out the infrastructure to electrify the transportation sector, a top priority of legislators and the Murphy administration as a key to achieving aggressive goals to reduce global-warming pollution.

The straw proposal made public by the BPU staff Monday aims to answer some of the biggest questions about transforming the sector, including who should build, own, operate and pay for the network of charging infrastructure for plug-in electric vehicles.

For the most part, the proposal focuses on attracting private capital into the electric-vehicle sector and substituting shareholder money instead of ratepayer capital wherever possible. That is the stance taken by the New Jersey Division of Rate Counsel in fighting pending proposals by Public Service Electric & Gas and Atlantic City Electric to build charging stations.

The proposal would make the state’s electric utilities responsible for wiring and backbone infrastructure to get locations ready for cost-efficient installation of electric vehicle service equipment (EVSE). The utilities also would be responsible for ensuring charging stations do not impair the reliability of the local distribution system.

The proposal falls far short of what PSE&G and ACE have proposed spending in filings with the BPU. The former wants to spend up to $364 million over six years to install 40,000 charging stations, while the latter is looking to spend $42 million to build infrastructure in its franchise territory.

Toss out utility filings

Rate Counsel director Stefanie Brand is asking the BPU to dismiss those filings, arguing the utilities are not authorized to spend ratepayer funds on such investments. The straw proposal seems to indicate agency staff wants those proposals to be considered along with the more generic proceeding, involving a general framework on how the buildout occurs.

Both utilities offered relatively muted comments on the straw proposal.

“Utilities are uniquely positioned to support universal-charging access, addressing an otherwise unmet need, and our proposal was designed to ensure the state meets its electric vehicle goals,’’ said Michael Jennings, a PSE&G spokesman.

Frank Tedesco, a spokesman for ACE, said the utility’s proposal supports the growth of New Jersey’s EV-charging network and positions the state as a leader in the rapidly growing sector.

New Jersey currently ranks 45th in the nation in charging stations per registered vehicle.

Price of not moving ahead

New Jersey hopes to curb carbon dioxide emissions by 80% below 2006 levels by midcentury. Failing to electrify the transportation sector increases the cost of meeting those decarbonization goals by an average of $1.6 billion per year, according to the 2019 Energy Master Plan.

For the most part, others involved in the sector were positive about the proposal.

“From ChargePoint’s perspective, it is a significant step forward for New Jersey and it’s all hands-on approach,’’ said Kevin Miller, policy director of the EVSE company. “It is going to require multiple business models to move forward.’’

Pam Frank, CEO of ChargEVC, a not-for-profit coalition of groups pushing to electrify the transportation sector, called the straw proposal a “great start. They have done a good first pass at this,’’ she said. “It seems the BPU has shifted high gear on this.’’

Too fast, said Brand, noting the expedited proceeding is causing a lot of confusion and uncertainty. The BPU plans to hold a webinar on the proposal two weeks from today and close comments two weeks later. “They could take more time to get to a better decision,’’ Brand said.

Brand backed the proposal to focus on the private sector to fund charging stations, saying the utilities will still make a lot of money on ensuring the distribution systems can handle the electricity demanded by refueling plug-in vehicles. “It’s a huge source of new business for the utilities,’’ she said.

Utilities also are encouraged under the straw proposal to submit plans to potentially electrify airports, seaports and bus and rail terminals operated by the Port Authority of New York and New Jersey and other carriers, as well as a proposal for electrifying bus fleets. Both PSE&G and ACE’s filing include such proposals.

In addition, utilities could be designated as “builders of last resort’’ in urban areas where the private sector is not committing resources to build charging stations.