Utilities Need to Play Bigger Role in Electrifying Transportation Sector, Industry Officials Say

Board of Public Utilities urged to include heavy-duty trucks and buses in electrification program, as they are major sources of urban air pollution
Credit: andreas160578 from Pixabay
While industry officials are urging utilities to play a larger role in building out the state’s electric vehicle infrastructure, the Rate Counsel says ratepayers may already be under too much pressure.

If the state wants to achieve its goal to electrify the transportation sector, then it needs to broaden the role utilities play in building out the infrastructure for electric vehicles, according to industry officials.

In a wide-ranging webinar Wednesday, staff of the New Jersey Board of Public Utilities (BPU) also heard criticism that its straw proposal for electrifying the sector is too narrowly focused on light-duty vehicles and ought to be expanded to include heavy-duty trucks and buses, major sources of air pollution in many urban areas.

The nearly six-hour-long event was the first and perhaps the only public opportunity to comment on the proposal, which could frame how the state plans to achieve aggressive goals to convert the transportation sector from one reliant on petroleum to a system largely fueled by electricity.

The comments, particularly those dealing with the role of the state’s four electric utilities, reflected opposition to a key part of the straw proposal that argued the state should focus on the private sector — instead of having utility ratepayers pay to build the charging infrastructure for New Jersey. It represents the biggest unresolved issue in how the state moves forward on the policy.

By 2025, the state should have more than 400 fast-charging stations open to the public, and more than 330,000 plug-in electric vehicles (EVs) on the road under a law signed by Gov. Phil Murphy in January to accelerate the transition to zero emission vehicles. New Jersey has about 31,000 plug-in electric vehicles on the road now.

NJ’s poor air quality

The transportation sector accounts for a large portion of poor air quality in New Jersey, and the single largest source of greenhouse-gas emissions, which the state wants to cut by 80% below 2006 levels by mid-century.

Several panelists on the webinar said the electric vehicle targets are achievable, but will only happen with a lot of coordination among public, private and government entities. “It’s a heavy lift,’’ said Michael Krauthamer, managing director of EV Advisors, a consulting firm.

Unlike the straw proposal, most said it will not happen without a meaningful role for the state’s electric utilities. Every state with significant electrification programs has such programs, according to Scott Fisher, a vice president of Greenlots, a provider of charging infrastructure equipment.

“We think the utility is a catalyst for market transformation,’’ said Phil Jones, executive director of the Alliance for Transportation Electrification.

Karen Reif, vice president of renewables and energy solutions for Public Service Electric & Gas, agreed, saying utility investment is needed to spur the market. The state’s largest utility has a filing before BPU to spend $364 million over six years building 40,000 charging stations, but it has not yet been taken up by the agency.

Too much pressure on ratepayers  

But Stefanie Brand, director of the Division of Rate Counsel, argued the state needs to rethink its priorities in the wake of the COVID-19 epidemic, citing the more than 1 million New Jerseyans who lost their jobs in the last few months and the $10 billion hole in the state budget.

“We can’t go forward with business as usual. We can’t proceed as if the last few months didn’t happen,’’ said Brand. The legislation to promote EVs also didn’t authorize such a large role for utilities, she said, adding ratepayers just cannot afford it.

Utility customers face an array of new increases to their bills, primarily driven by the efforts to achieve a cleaner way of producing electricity and the need to upgrade the electric grid to accommodate that transformation, part of which will be required by increased reliance on electric vehicles.

On the other hand, the nascent EV sector faces its own hurdles in building the charging infrastructure. With so few electric vehicles on the road, the private sector is hesitant to invest in building charging stations that are not profitable.

Low utilization of those stations in the early years of EVs is one of the biggest structural barriers to building out the infrastructure, according to Mark Warner, a vice president at Gabel Associates, an energy consulting firm based in Highland Park.

“What we have is a utilization problem,’’ agreed Adam Benshoff, executive director of the Edison Electric Institute.

The state is seeking to increase EV penetration by launching a new rebate program for EVs that offers consumers up to $5,000 to purchase a plug-in vehicle. The first phase of the program involves people who bought vehicles after Jan. 17, the date the bill was signed into law.

Another big unresolved issue is how the state ensures large segments of the population, mostly low- and moderate-income households benefit from the electrification of the system. Faster electrification of buses, heavy-duty trucks and equipment at New Jersey’s ports were suggested as ways to achieve that goal.

A few panelists, however, suggested there are numerous barriers to how residents in multifamily dwellings have access to charging stations.