It’s no secret that a reliable network of accessible charging stations is critical for fueling the transition to electric vehicles (EVs). That’s why New York’s investor owned utilities and a handful of state agencies submitted a proposal for New York Public Service Commission approval in late November outlining plans to incentivize the deployment of Fast Charging stations that provide large gulps of power when they’re needed in a pinch. NRDC, Sierra Club, and Acadia Center submitted comments last Friday on the proposal that 1) recommend its swift approval with some proposed tweaks and 2) open an investigation to explore longer-term rate design solutions to drive greater EV adoption in the Empire State and curb emissions in the state’s most polluting sector: transportation.
Before diving into the details of the proposal, it is important to understand why it was submitted. Current electricity rates and current levels of EV adoption make the economics of operating Fast Charging stations extremely challenging. And the faster the station can charge a vehicle, the more expensive it generally is to operate. As a result, there has been very little Fast Charging station deployment across the state, particularly in upstate communities. A backbone of essential Fast Charging infrastructure will be needed to increase driver “range confidence” and meet state Zero Emission Vehicle (ZEV) and climate goals. Fortunately, the New York Power Authority has stepped up with EVolve NY, a bold initiative to deploy 400 Fast Chargers at 200 locations across the state, enabling quick, reliable EV travel from Long Island to Buffalo. Even so, much more infrastructure is needed to support widespread electrification of the state’s transportation sector.
Although each individual utility proposed a unique incentive for Fast Charging stations, they all share a common structure: a declining annual per-charger incentive that sunsets in 2025. For example, the operator of a Fast Charger installed in Consolidated Edison’s service area in 2019 would receive $4,000 the first year, roughly $3,400 the second year, and so forth. The intent is to spur the growth of up to roughly 1,000 Fast Charging plugs across the state.
NRDC recognizes the importance of jumpstarting Fast Charging investment in supporting EV adoption and recommended the approval of the proposal. However, there is more the Public Service Commission can do to make sure that the power sector is poised to play a complementary role in reaching New York’s decarbonization goals:
- Expand the size of the incentive program: According to a National Renewable Energy Laboratory model, EVI-Pro Lite (more info in this blog), the incentive program likely underestimates the need for Fast Charging stations to support New York’s 800,000 vehicle ZEV goal. We recommend tailoring the size of the program up from approximately 1,000 to 3,000 chargers to meet the state’s goals.
- Build in flexibility to meet program goals: This approach to incentivizing Fast Charging infrastructure is new, and we recommend building in checkpoints through the life of the incentive to ensure that Fast Charging stations are deployed in areas traditionally underserved by the market today, including rural and low-income communities.
- Encourage complementary investments to support Fast Charging infrastructure: The proposal helps defray some of the operational costs associated with Fast Chargers, but the upfront costs of Fast Charging stations are non-trivial: installation costs can be over $40,000 per unit and interconnection costs can be upwards of $100,000 per unit in urban and rural areas of the state. New York can follow the lead of other states like California in authorizing hundreds of millions in investments to support the rollout of electrical infrastructure needed to support Fast Charging stations.
- Consider expanding eligibility to non-qualified medium- and heavy-duty vehicles: As written, the incentive is only eligible for publicly accessible chargers – which may preclude fleet operators from participating in the program. Electrifying medium and heavy-duty fleets brings critical air quality and greenhouse gas reductions benefits, and the Commission should consider how rates and incentives can be calibrated to ensure utilities’ financial health while supporting cleaner transportation options for businesses, schools, and government agencies alike.
- Consider an investigation to explore other rate design options: Commercial and industrial electricity rates were designed with large businesses in mind and encourage those customers to flatten their demand on the electricity system. Fast Charging stations, where usage is driven by customer demand, behave much differently than the businesses these rates were tailored for and may never experience the same usage patterns. For that reason, it is worth a deeper examination into sustainable rate structures (like Pacific Gas & Electric’s new commercial rate proposal for EVs) that support the state’s intended policy goals, such as increased EV adoption. At the same time, DCFC operators can test different strategies to control EV charging where feasible to avoid high operational costs.
New York is well positioned lead on clean transportation, the state‘s number one source of climate polluting greenhouse gas emissions. We support the steps New York’s utilities and agencies are taking to grow the Empire State’s burgeoning EV market and look forward to bolder action as the state charges into the new year.