Consumer value and system optimization
David Kolata is the Executive Director of the Citizens Utility Board of Illinois. He started with CUB in 2001 as a senior policy analyst and was named director in 2005. CUB is a member of NASUCA.
In an action that reflects the emergence of transportation electrification as an increasingly important issue in the public utility sector, the National Association of State Utility Consumer Advocates passed a resolution at its annual meeting in June 2018 urging the adoption of policies to protect consumers as electric vehicle market share increases.
The underlying insight guiding the NASUCA resolution is that electric vehicle charging patterns at scale present both opportunities and challenges for the grid. The right mix of policy and programs - reflecting the market structure, supply mix, and load dynamics in a state - can make EVs a source of system benefit, but the wrong one (or none at all) could mean higher costs and cross-subsidies. The key issue is to make sure EVs charge at the right times.
Accordingly, NASUCA encourages states to consider developing tools like time-based rates, smart-charging programs, load-management and demand-response practices, and other innovative applications aimed at managing EV loads efficiently, and in the interest of all consumers, including those who do not drive or own an EV.
There was unanimous support for the idea that managing EV-related demand with the goal of creating a more efficient, reliable, equitable, environmentally responsible, and less-costly electric system should be at the center of all EV policy discussions.
Generally, NASUCA members approach questions of utility rate-basing of EV infrastructure with a fair degree of skepticism.
Although it does not come out entirely against the idea, the NASUCA EV resolution recommends that states consider whether public utility ownership of EV charging stations could limit competition that might otherwise benefit consumers and whether that involvement might cause ratepayers to take on risks that should more appropriately be borne by private enterprise.
NASUCA members also recognized the importance of maintaining open access and interoperability in EV system design. Allowing a driver to plug into any charger and get service from any provider much like they can use their cell phone on any network is an essential goal highlighted in the resolution.
Additional recommendations include: Encouraging of stakeholder processes aimed at developing consensus-based policy solutions; Recognizing that effective policy design may differ between states and regions; and Passing of rigorous cost-benefit analysis before approval of any EV program.
They also include: Urging of substantial consumer education and strong consumer protections in any new rates; Establishing guidance that EV charging tariffs should be cost-based without reliance on cross-subsidies; and Reinforcing the importance of policies protecting and benefiting low-income consumers.
Overall, the discussion around the resolution was spirited - and while there were differences between advocate offices across the nation - there was broad-based recognition of the importance of getting EV policy right.
Consumer advocates look forward to engaging with stakeholders to make sure that as transportation electrifies, the traditional regulatory goals of safe, reliable, and affordable electric service are maximized.
While EV issues are complex and there won't be a one-size-fits-all solution, the NASUCA resolution suggests that if consumer value and system optimization are the central priorities shaping formation of EV policy, public benefit will be the result.
To read the full NASUCA resolution, visit NASUCA.org.