To continue reading

Create a free account or sign in to unlock more free articles.

By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy

Electric Vehicles

The New Death Match Over EV Chargers

It’s power companies vs. ... convenience stores?

A cartoon fight over EV charging stations.
Heatmap Illustration/Getty Images

The convenience store lobby is very, very interested in electric vehicle charging.

In state after state, they have clashed with utilities over who gets to install electric chargers — and who pays for it. The reason is that the convenience store industry is also the gas station industry. They sell 80 percent of America’s gas — and they want to sell power as well, if not for what they claim is unfair conduct by America’s utilities.

A group that the convenience store lobby helped found is fighting the utility Xcel Energy in Colorado over its proposal to install its own EV chargers. They have successfully campaigned against a proposed rate hike in Minnesota that would have helped fund Xcel’s plan to install around 730 EV chargers and supported legislative pushes in Oklahoma, Texas, and Georgia that limited utilities’ ability to charge their customers for EV charging investments through the regulated electricity rates.

The federal government is throwing billions of dollars at the electric vehicle industry, including charging, while the regulations that surround who is able to build chargers and with what money are largely fought state-by-state.

So why is the gas station industry so interested in what utilities want to do with EV charging?

It’s essentially a clash of business models. Utilities are almost completely unique in how they’re set up as legal monopolies. Government regulators only allow utilities to take profits based on the scale of the investments they make. “Utilities profit by deploying capital,” Ari Peskoe, Director of the Electricity Law Initiative at the Harvard Law School, told me. “That’s the basic business model.”

Get one great climate story in your inbox every day:

* indicates required
  • When utilities make investments in things like transmission lines, they can recover the cost of them — and profit — by charging all of their customers in their electric bills. And “if it’s a big market, they may want to completely control and dominate that market,” Peskoe explained. So when utilities have proposed using ratepayer money to fund electric vehicle chargers, it reliably kicks up opposition from potential competitors who see it as an unfair advantage and an existential threat to their own businesses.

    Gas stations and convenience stores, on the other hand, have a business model where the sale of gas itself — and, eventually, electricity — is a low-margin business with fierce price competition where profits are largely made on sales of snacks and drinks. Customers drive in for the pump, but profits are made at the cash register.

    The industry claims that the stations with the best locations, customer service, and amenities won’t be willing to make the large upfront investments for charging if a utility could set up shop next door and actually profit purely from setting up the charger, and thus be able to undercut them on price. They also fear, Peskoe said, that the necessary services a utility has to provide to non-utility chargers may be degraded or disfavored compared to the utilities’ own chargers.

    “The only way we’re going to get the buildout of an adequate number of locations to service those drivers is if the private sector has a reason to invest and that reason is potential to make profit,” said Doug Kantor, the general counsel of the National Association of Convenience Stores.

    The dispute between the two industries is yet another example of how public policy firmly shifting in support of decarbonization and electrification at the federal level and in many states has transformed how businesses respond to climate change.

    While there is still industry-led opposition to decarbonization, many companies, even those directly tied to fossil fuels, are trying to position themselves to profit from the massive transformation underway in how Americans get around. The result, at least in the case of utilities and convenience stores, is a state-by-state battle royale.

    The utilities argue that there’s no way to electrify American transportation without their involvement and that rate decisions like the one in Minnesota will ultimately make it hard to massively expand the nation’s charging network, hurting decarbonization goals. Xcel spokesperson Lacey Nygrad said in email, “We know EVs are the future of transportation, and we will help our customers and communities make the transition, but we also need constructive outcomes in rate reviews to help drive the state forward.”

    Xcel attorneys argued a similar point in a letter to the Public Utilities Commission when it withdrew its plan to install 730 chargers. “[T]he Commission made several decisions that, if allowed to go into effect, will limit the Company’s ability to continue to lead the clean energy transition for our customers.”

    The convenience stores have been able to win over some major figures in the push for electrification, touting a NACS-funded report by the influential public policy consulting firm Grid Strategies LLC — frequently quoted in the media as an advocate for large investments in transmission infrastructure typically favored by green groups and decarbonization advocates — which concludes that “Only independent owners should be allowed to own and operate EV chargers across the interstate highway system and in our local communities."

    The convenience store lobby is trying to take advantage of the ambiguous place that utilities play in the energy system. As regulated monopolies, utilities are often unpopular with the general public. They have been accused of dragging their feet on the transition to non-carbon energy and even outright obstruction of so-called “behind-the-meter” resources like rooftop solar. It also means they will be around, in some form or other, essentially indefinitely and will likely be shouldering much of the massive investments needed for a decarbonized and electrified power system.

    The utilities industry has argued for its role in the EV charging space, saying what’s required is an “all-hands-on-deck approach,” in the words of Kellen Schefter, an official at the Edison Electric Institute, the trade association for investor-owned utilities. “No one is preventing private-sector stakeholders from investing in EV charging today, and the idea that some stakeholders are trying to prevent electric companies from building EV charging infrastructure is senseless.”

    No matter who gets to build chargers – and how they’re funded — the utility industry will inevitably be deeply involved, not least with the transmission and distribution infrastructure necessary to bring power to electric vehicles.

    “Utilities do have an indispensable role to play in EV charging,” Matthew Goetz, Associate Director of the Mitigation Program at the Georgetown Climate Center, told me. “A primary role for utilities is the broad system planning and the grid infrastructure investments, both in the distribution grid and investments in transmission infrastructure.”

    In the end, the utilities and the convenience stores will have to learn to work together.

    Green

    Matthew Zeitlin

    Matthew is a correspondent at Heatmap. Previously he was an economics reporter at Grid, where he covered macroeconomics and energy, and a business reporter at BuzzFeed News, where he covered finance. He has written for The New York Times, the Guardian, Barron's, and New York Magazine. Read More

    Read More
    Sparks

    Orsted Powers Up America’s First Major Offshore Wind Farm

    The South Fork Wind project off the coast of Long Island just delivered the U.S.'s first utility-scale offshore wind power.

    An offshore wind farm.
    Heatmap Illustration/Getty Images

    Out in the Atlantic Ocean, 35 miles off the eastern tip of Long Island, sits a single, mammoth wind turbine. On Wednesday, its oscillating blades started sending power into the New York grid.

    The South Fork Wind Farm is officially the first utility-scale offshore wind project operating in the United States.

    Keep reading...Show less
    Yellow
    HMN Banner
    Get today’s top climate story delivered right to your inbox.

    Sign up for our free Heatmap Daily newsletter.