The Cost of Utility-Controlled Vehicle Charging — Episode 215 of Local Energy Rules

Doug Kantor:

To give the capacity we need, I mean whether it’s 1. generating capacity, but also really importantly, transmission capacity to get power where it needs to go, substations, all those sorts of things. There’s very good, I think rationales, public policy rationales for saying that those costs should be subsidized or socialized across rate payers. There’s good in that for all of us, but at the point where it’s actually the charging unit itself that it seems to us really ought to be paid for by the vehicle owners and drivers. Much like it’s say in traditional gas pumps.

John Farrell:

To serve a rapidly growing fleet of plug-in electric vehicles, the United States is going to need a lot of public chargers to refuel them. Many electric utilities are interested in building those chargers because their business model allows them to earn a profit on each charger they build. But would monopoly ownership have unexpected costs? Joining me in May, 2024, Doug Kantor, general counsel for the National Association of Convenience Stores, explains why a competitive market would serve consumers better and why his members are better suited to provide vehicle fueling where customers are, whether it’s gas or electric. I’m John Farrell, director of the Energy Democracy Initiative at the Institute for Local Self-Reliance, and this is Local Energy Rules, a podcast about monopoly power, energy democracy, and how communities can take charge to transform the energy system. Doug, welcome to Local Energy Rules.

Doug Kantor:

Thanks so much for having me.

John Farrell:

Well, I’d love to start off with my guests by just asking them how did you get into this work? What took you along this path to be representing convenience stores on these questions of policy?

Doug Kantor:

Well, let’s see. I moved out of the administration, Clinton administration, many lives ago at the Department of Housing or Development in 2001, and one of the first clients I started doing work for was the National Association of Convenience Stores. I had no idea how broad a set of issues they had and how much of our daily lives that touched, but once I found out I was super interested and have represented them ever since.

John Farrell:

That’s so great. Now help me understand a little bit like you said that there’s these very broad issues that convenience stores are interested in. Why are convenience stores showing up in regulatory proceedings about the infrastructure plans of investor-owned electric utilities? What is the crossover here between convenience stores and electricity?

Doug Kantor:

So the crossover is this, convenience stores sell about 80% of the motor fuels that we all buy every day. This is the typical gas station if it’s got a store, which virtually all of them do. Now some of our industry doesn’t have gas, but stores across the country, they’re everywhere. And what they want to do is serve people every day and to be able to sell them what they need. One huge piece of that obviously is fueling their vehicles in any way that’s needed. And over time we looked at it instead, hey, most of the way vehicles are fueled today is with gasoline or diesel fuel, but look, there’s all these people who want to drive electric vehicles, we want to serve them too. How do we do that? And that led us down this road of, okay, how do electricity markets work? How do we get these things called chargers installed? How is this all going to come together so that these businesses can make those investments and make them in a way that works for the business and for the consumer?

John Farrell:

So I imagine that some of your members have gone into this trying to figure out how do I get the infrastructure in place to support charging, how do I get a charger? And then they’ve started to realize that, oh, there’s these proceedings going on at these state regulatory commissions that oversee electric utilities about charging infrastructure where for example, there was one in Minnesota recently where the utility was like, we want to spend several hundred million dollars of utility customer money building out utility-owned charging stations. So could you talk a little bit about why that would be problematic for us and do you have examples that might support the perspective of your organization about why letting utilities just go out there and invest a whole bunch of money is a problem?

Doug Kantor:

Yeah, it’s interesting. There are so many problems with electricity and electricity markets that we did not understand at all getting into this. Putting in physical infrastructure is no big deal. It’s something that this industry does all the time just to sell gasoline for example, you got to put these huge storage tanks underground, you got to put in all kinds of piping. There’s a lot to it. There are big investments even just putting in a store, frankly, there’s a lot to it. And so putting in electric chargers, okay, there’s some challenges there. It’s expensive, especially for fast chargers, it’s expensive, but that’s all doable. The problems we didn’t anticipate are really a couple of things. One is any commercial user of electricity, the utility makes them pay something called demand charges, which is based on their spike in usage, kind of a peak usage over the course of a month.

But what it means is all of a sudden you’re paying money that you can’t possibly ask your customer to pay and therefore are losing money on charging and we can go into that. There’s a lot to that. The other thing is that these local utilities we’re trying to get into charging and they have this monopoly position in electricity, and so you look at that and say, wait a minute, they can just dramatically undercut on price anybody in the market and kill them off like any other monopolist. And then it’s a bad economic situation for anybody trying to buy electricity because with no more competition, they have free reign on what they charge and how they do it. What we also found is this sort of odd dynamic, which is one piece of it in that electric utilities not only do they have a monopoly position, but generally with their regulator, they get paid to build stuff and they don’t particularly make money on servicing things or having consumers pull up to them and use them. And so there’s a lot of broken stuff out there, and this was an odd dynamic we saw too, where coming from an industry like the convenience store or gas station, you got to make sure everything’s working or you make zero and that’s a very different economic proposal than what the utilities did.

John Farrell:

I really appreciate that example. I was about to say, oh, even if they have a monopoly, I think a lot of people would respond and say, well, they’re publicly regulated, so the amount that they can charge people is going to be controlled by those public regulators. But I think that point about the broken infrastructure is really important here because obviously I can speak from personal experience. I have a Nissan Leaf of a 2015 version, so it has a fairly small range, and I remember there was this one day in the spring I had to drive my son to this tournament, sports tournament he was playing in, and then we drove across town. I had pick up something off of Craigslist and we’re driving home and I’m like, Ooh, it’s kind of running low. I’d really feel more comfortable if I could charge. And I look up on my phone app for where a charger is, think, okay, this Hy-Vee grocery store is going to have one, and I go there.

They didn’t own it, they were just hosting it in their parking lot, but it was, I got there and it was broken and I was like, okay, well I’ll look up another one on my way home. And I found another one and drove there and it was also broken. And then I finally ended up just limping home driving like 15 miles an hour, sort of like the horror story that everybody imagines they might be stuck in with their electric vehicle. And fortunately I’m a big booster of it and willing to deal with that, but I think other people are not going to want to and obviously that has a really significant impact then on people’s experience. So I really appreciate you bringing that up.

I want to come back to this other thing that you mentioned though that I think is really important, which is this idea about how, so you have a demand charge on your users. So the convenience store is paying its electric bill and right now there’s two parts to it. There’s how much energy it uses and then there’s this demand charge based on their peak use in a month. Now all of a sudden you’ve got vehicle chargers available. Well, that one day where everybody comes and fills up all the charges at the same time is going to spike electricity use and then spike that bill. I would imagine one problem you might have is that if you tried to negotiate with the utility over how this billing works, they might say, well, we’re not really interested in helping because we’d like to build chargers ourselves. Has that been an experience that you’ve had or do you even get to talk to the utility because regulated, so maybe it’s even more complicated to try to figure that out.

Doug Kantor:

So that is very much an experience we’ve had. We have had members talk to some of the utilities and I will say there are some out there that have tried some things and tried to be helpful. Usually those are not the investor owned utilities, but some of the others have tried to do some things over time. But what we found with far too many of them is one, they’re not so interested and who knows exactly why, but as you note, they may have other motivations there. But two is utilities, and I think most of us as consumers can probably identify with this, they’re not really engineered to be customer friendly. They’re not looking to make you happy. They kind of do things the way they do them. Even the billing, and it’s very similar for our business members as it is for us as individuals, is incredibly confusing because as you point out, there are sort of two buckets of charges.

It’s how much energy you use, but there are multiple different rates you may pay based on time of day. And then on top of it, for our guys, there’s this demand charge, which just to give you a sense of the scope of what we’re talking about, just one charger, one fast charger being used at one time requires a sudden spike in electricity usage. That’s equal to all the other stores operations combined: refrigerators with soft drinks and beer getting cold, the electric pumps bringing gasoline up, all the lighting, all that sort of stuff, just one charger. It’s a lot of electricity at once. And so our members, often what you’re talking about is more than a thousand dollars on their monthly bill and it’s unpredictable because then if you get two or three people charging at the same time, then it can be much higher. So with this unpredictable extra amount, the problem is they can’t make customers pay that and eating that cost is a big drag on thing. So yeah, it’s been very difficult to get these utilities to be responsive to this problem and that means frankly, lots of the stores that are doing this today are doing this sort of hoping and betting on the future but not really making money on it today and in fact often losing money.

John Farrell:

The thing about pulling the thread about the difference between a convenience store investing in electric vehicle charging versus the utility you kind of implied before, and I think this is obviously true just from the design of their business model, utilities make their money by building infrastructure. So I’m thinking about this Minnesota proposal. Again, utility wants to spend multiple hundreds of millions of dollars building out electric vehicle charging infrastructure. On the one hand, that’s great, we need more charging infrastructure to support people who want to drive electric vehicles, but there’s an interesting kind of equity issue here at stake too of everybody who’s an electric customer is going to pay for that charging infrastructure, whether or not they even drive, whether or not they even have a car and whether or not the utility actually has those chargers available when you go to find them, as you pointed out, that’s not how they get paid.

And just very logically, if I’m a business person at a utility, I’m like, well, I got paid when I built the thing. It doesn’t really matter if it’s working unless they’re going to come after me for that and maybe they have some design for that. On the other hand, when a convenience store owns the charger, they’re the ones that are putting up the money to build that infrastructure. So now it’s only the people that use it at least on that side. But you do have also, I guess you also do though have sort of this rate design kind of issue around the demand charge, like presuming that there’s a reason for the demand charge, which is that the utility has to build the infrastructure to supply that electricity. There is a need somehow to make sure that the system is robust enough so that if 150,000 convenience stores all of a sudden have fast chargers that the grid is ready for that. So I guess I’m kind of curious how you think about that challenge of, on the one hand, if the utility does it, everybody has to pay whether or not they use them and they may not work. On the convenience store side, it’s much fairer in terms of the user is paying, but there’s also this kind of socialized infrastructure behind the scenes. How have you been dealing with that issue?

Doug Kantor:

Yeah, so we think there’s very good ways to draw lines here, right? There’s great justification for socializing the cost of lots of this infrastructure and so to give the capacity we need, I mean whether it’s 1. generating capacity, but also really importantly transmission capacity to get power where it needs to go, substations, all those sorts of things. There’s very good, I think rationales, public policy rationales for saying those costs should be subsidized or socialized across rate payers. There’s good in that for all of us, but at the point where it’s actually the charging unit itself that it seems to us really ought to be paid for by the vehicle owners and drivers, much like it is say in traditional gasoline space, you wouldn’t want people who can’t afford any vehicle at all to have to pay for you to get gas in your gas powered car.

That’s not fair. We would all think of that as an equity issue. And we think the same thing is true here. You don’t want older people on fixed incomes or lower income people to pay essentially for somebody to get electricity in their car. More infrastructure benefits everybody, but that last piece really only benefits the vehicle owner. And so we think that’s a good way to equitably divide this up and there’s great benefits to there being a competitive market there, right? Competitive markets generally discipline pricing and can help on that front.

But one of the other things you pointed to I think is really important, especially with your personal experience you relate is just about every electric vehicle owner that I know has had the experience of looking for, oh gee, where’s their charging station? And often when it’s one of these utility installed stations, these can be in places like the post office parking lot, an empty parking lot somewhere else, these sort of remote locations where time after time friends have told me, well, it was great I got there and even if it worked, I plugged into charge and then I’m standing there wondering, well, what do I do now? And I kind of need to use the restroom. I could use a cup of coffee or something to drink, and none of those things are there. Not to mention, frankly, when it’s at night and you’re on a road trip or whatever, there’s safety and security issues, all those things. The whole setup of the convenience store industry has been how do you serve people driving around best? And so all those things are there because that’s what people happen to want when they’re refueling a vehicle. And that’s a really big difference, right, between the convenience industry doing this versus utilities is they’re already in the places where we’re used to stopping, where there’s busy traffic patterns, where it was worthwhile to invest and put a store as well as then provide them, okay, what are all these people going to want? Well, let’s make sure we build a store that has bathrooms and can sell ’em a drink and all that kind of stuff.

John Farrell:

This is a bit of a tangent from the conversation about who owns the Chargers, but how do convenience stores handle the refueling for electric vehicles differently from gasoline vehicles? I mean, charging usually takes somewhat longer than filling up a gas tank, even on a fast charger, it’s going to be more maybe even tens of minutes as opposed to three or four minutes and I’m wash the windshield and I run into use the restroom. Are there interesting adaptations that you’re seeing to the sort of convenience store business model or even maybe the layout of the area for vehicles that folks are having to think about in terms of making this work?

Doug Kantor:

Yeah. Well, there’s definitely some different things about the layout because many of these locations have gas pumps and therefore you want to make sure you put chargers in a place on the property where you’re not going to have a problem traffic pattern. All these cars have to get in and out, do all those sort of, so those layouts are leading folks to having a bigger footprint or more often folks with bigger footprints are more likely to put in the charging earlier than others. But there is an evolution in the business model as well where what more and more of the industry is doing, and this pattern was there before, but it’s really been accelerated by it, is they’re frankly investing in having much better food and food offerings made to order, whether it’s sandwiches or other things, and kind of serving folks who might be there for 20 minutes instead of three to five minutes. And so you find when that’s your customer base, they’re going to want different things. And so the industry has got to respond to that. And food is a big piece of it. All of us, especially if you’re sitting there doing nothing, you realize, Hey, I’m hungry.

John Farrell:

Yeah, it seems like it would especially fit too. I’m thinking about as someone who does a lot of road trips and enjoys them, the kinds of stops along an interstate highway often are larger places now they’ve got a branded restaurant that’s part of the convenience store like a Subway or maybe even some other kind of restaurant. It already is inviting you to stay for a while. So I can see what you’re saying about with the electric vehicle charging, maybe that one isn’t as complicated because you likely have room you those stops on the interstate is often the only thing there. There’s one or two places there that’s intriguing. Anyway, thanks for indulging me with that question. I was just kind of curious how your members are thinking about that change to their business model.

Doug Kantor:

You bet. And look, the road trip example I think is a really important one too because all of us use our vehicles in different ways and that’s one part of it. And one part of it that we’ve found can be a question mark for people thinking about an electric vehicle. Will I be able to take it on road trips? And what you see it also raises equity issues is that lots of those highway where you get off and there’s maybe a couple of gas stations in a restaurant or two, maybe a hotel or motel, that kind of thing. In many of those communities that is the biggest part of the tax base of that community is just right there at the highway exit and those handful of businesses there and many of those places, frankly, you can then drive for miles and see no businesses of any kind, but those highway exits are super important and the tax base to those localities, especially rural localities, is super important. And that’s a big piece of it. You start having that experience get taken away by say, utility owned charger or things of that nature and that tax base can dry up. And that is a huge problem for those local communities that have really developed because they have a highway exit and that’s been the basis of a lot of that rural development over time. So it’s a key thing to think about. It’s not only where people stop and is convenient for them, but our society’s grown up around these kinds of patterns.

John Farrell:

We’re going to take a short break. When we come back, I ask Doug whether there are examples from other industries of monopoly incumbents expanding into potentially competitive services. He addresses a common equity question about serving renters, and we explore whether convenience stores have to worry about retribution from utilities when they advocate for a competitive market. You’re listening to a Local Energy Rules podcast with Doug Kantor, general counsel for the National Association of Convenience Stores.

Hey, thanks for listening to Local Energy Rules. If you’ve made it this far, you’re obviously a fan and we could use your help for just two minutes. As you’ve probably noticed, we don’t have any corporate sponsors or ads for any of our podcasts. The reason is that our mission at ILSR is to reinvigorate democracy by decentralizing economic power. Instead, we rely on you, our listeners. Your donations not only underwrite this podcast, but also help us produce all of the research and resources that we make available on our website and all of the technical assistance we provide to grassroots organizations. Every year ILSR’s small staff helps hundreds of communities challenge monopoly power directly and rebuild their local economies. So please take a minute and go to ilsr.org and click on the donate button. And if making a donation isn’t something you can do, please consider helping us in other ways. You can help other folks find this podcast by telling them about it, or by giving it a review on Apple Podcasts, Spotify, or wherever you get your podcasts. The more ratings from listeners like you, the more folks can find this podcast and ILSR’s other podcasts, Composting for Community, Community Broadband Bits, and Building Local Power. Thanks again for listening. Now, back to the program.

John Farrell:

That’s super interesting. I never would’ve thought of that in terms of the meaning that it has for the local community. Certainly an entirely different layer to that siting question. I was kind of curious, coming back to the issue of utility ownership of the infrastructure, do you see any parallels between how electric vehicles and their sort of monopoly over electricity distribution moving into electric vehicle charging and other industries where that kind of thing has happened where maybe an industry that’s dominant in one place is now all of a sudden getting into a place that could at least be more delivered more competitively?

Doug Kantor:

The analogies are, there are some, but they’re not great. You can look at competition policy problems like let’s go back a few years. Microsoft is dominant in software and suddenly they use that to leverage being dominant in internet web browser, Department of Justice brings a case, all those sorts of things, but very problematic. And so you see those types of things that have come up over time, and I think we’ve all agreed in terms of antitrust policy, that’s a problem, right? Any market that’s dominated by one big provider is not a good thing. The other that may be closer frankly, is telecommunication. In the 1980s, we got to this point and said, oh my God, AT&T has this monopoly everywhere, and the courts broke them up that didn’t do any good because you then had seven regional bells and you still were getting charged too much. And finally actually the 96 Telecom Act helped them and said, Hey, you got to let individuals in their homes or businesses choose any long distance provider they want. And finally, that price competition dramatically reduced the cost of long distance. And so here, one of the unique factors is these utilities being set up purposely as monopolies regulated, as you pointed out earlier, they are regulated in their operations and their pricing. But I think most people with experience would say, yeah, well they’re regulated. Why do they have a lot of influence over how they’re regulated and how those rates happen? And there are real questions about whether the public is sufficiently protected in those rate making proceedings, given how it’s developed over time. And so that’s where you’ve got these real dangers of if there’s not competitive pricing, having a problem with the overall cost to consumers that comes out of that.

And look, one of the biggest things, and I’ll tell you the folks at Grid Strategies have done great work thinking about all of this and put out a paper on it. In electricity, the whole rationale for giving regulated monopolies was you don’t want to duplicate infrastructure. The wire lines going into buildings and things like that, do it once lower cost, and we socialize all of that and great, it works out, but inherently by their very nature, that’s not what we’re talking about. With vehicles, they move around. That’s the whole point of them. And so you don’t have to have a monopolized structure. You can have competition and the economic view has always been that’s much better and works out better for people wherever you can do it that way.

John Farrell:

You don’t have to convince me. I just released a report about ways that monopoly utilities throw their political power around to subvert regulations. Preaching to the choir when you talk to me about this for sure. I want to talk about one particular issue about electric vehicle charging. So I know one concern of advocates of electric vehicles is that we need more public charging that specifically would serve renters and other folks who have vehicles but not off street parking like a garage for example. Do you see a competitive approach to deploying chargers being compatible with goals like that or is that maybe one of the places where we should have utility charger ownership is sort of thinking of it as filling in the gaps.

Doug Kantor:

So look, I actually don’t think that’s the right filling in the gaps question. Here’s the thing, we already have a form of this infrastructure. Nobody today says, boy, renters and people who don’t have parking can’t have a car because there’s nowhere to gas up the car. Well, of course there, there’s the existing industry literally has grown up in those places to serve people in those communities. It works really well. We’re all used to it. You don’t fill up with gas at home, you get it somewhere on the road. So that’s there and it’s very doable in the electric charging context, that’s not problematic. I do think as a transition matter, look, there may be some rural places in particular where the penetration of the vehicles is not sufficient yet to support a lot of private investments. Those places I think, are much more limited than most of us think.

There’s a huge, I mean, look, we have members with hundreds of locations. There’s a lot of very big interest in investing and recognition of the fact that there are opportunities here, but there are some places like that, and we should always keep that in mind that there’s reasons at times to make sure we’re serving communities that aren’t going to be served and that there’s a mismatch in the market. But for the most part, that’s not that the renter community, the renter community is going to be served. Often that’s in higher density areas where there’s lots of business locations that would love to serve that market and are starting to, and frankly, I think there’s often a misconception about even the number of people who can charge at home, even if they own their own home. I often joke with people between you and your friends, how many people have so much junk in their garage, they couldn’t possibly use it to charge a vehicle, and the numbers are much higher than any of us assume.

John Farrell:

Oh my gosh, that’s funny. I have two plugin cars and I’m probably the exception here where I have off street parking. I at least have a driveway, so I just run the cords out into the driveway and that works fine. And I joke sometimes that I always feel guilty in the winter. My leaf obviously doesn’t need gas, but I do still like to clean the windshield off and I don’t have anything at home to do that. So I sometimes go to a convenience store and just buy a candy bar and clean the windshield. I don’t need the gas that’s just provided as a service. You’re buying the gas, you can clean your windshield, and in a cold climate where it snows a lot, people don’t really think about that, but all of a sudden I’m very cognizant of the fact that my car’s really dirty and I can’t see out the windshield, but I don’t ever stop at the convenience store anymore to get gas. So I don’t know, not probably one of the biggest business model problems that folks are needing to think about, but it is because I can charge at home. I am not finding myself waiting to charge it anywhere where I can clean the windshield.

Doug Kantor:

But again, it’s one of those things, right? There are pieces of the puzzle that have been solved over time, whether it’s cleaning the windshield or going to the little air machine and make sure you got air in your tires. Nobody’s going to do that piece of it at home, certainly, or sometimes there’s the vacuum there to clean out the junk in your car too. All those things serving the public or what’s happened over time, public utilities just are not going to do any of that stuff.

John Farrell:

Yeah. I want to pose to you another question that I think people bring up, which is folks will say, oh, well, maybe having utilities own this isn’t the ideal thing, but we’re in a hurry to deploy electric vehicle chargers. We have so few relative to how many cars there are. The sales are going up, utilities will just do this more quickly, so we should let them do it because they’ll build this stuff faster. How would you respond?

Doug Kantor:

I completely understand that line of thinking, and I get that we’re all in a hurry on all of this stuff, but finding ourselves in a place where we have broken infrastructure that when it works is way too expensive is not going to be a good answer. Even if we get there fast, that’s not going to be a very good answer. And look, that’s what a monopoly type of situation is going to provide. We’ve seen some of it. It’s a mystery to most drivers why so many of these things are broken, but that’s a big piece of the puzzle. Like I said, we’ve seen in so many areas, if you give an industry monopoly, it’s going to be more expensive for all of us, and frankly, you won’t see innovation that you want either, right? All the things that serve drivers today that we’ve been talking about and sometimes joking about, whether it’s air in the tires or food or what have you, grew up over time with people saying, Hey, I wish you had X. And somebody said, oh geez, why don’t we get that and then we can make money selling it. That’s an iterative process that with monopoly providers just doesn’t occur the same way.

John Farrell:

I think what I hear you saying is that those things that spin the slushy or icy or whatever would not have been invented by a monopoly convenience store company. That is only the result of competition to try to attract people,

Doug Kantor:

And how much worse off would the world be without.

John Farrell:

We probably don’t have to answer that question. The last question I have for you is even if utilities are prohibited from owning electric vehicle chargers, which has been how some states have responded to this issue, they’re still managing the grid connection process for the independently owned chargers, and they’re managing the rate design for that as well. So there’s two parts to it. There’s the hardware connection piece to be negotiated as well as the billing for that, and as you mentioned about demand charges, do you have concerns about your members having fair grid access when you’re also showing up in these public proceedings, basically advocating against the utilities doing what they would see as something very profitable, which is the chance to own these vehicle chargers?

Doug Kantor:

The short answer is yes, it’s scary. These utilities do have a lot of power not only in the rate making processes, but just in the political process in all these states generally, and so it’s a tough thing to take on, and lots of times these local business owners are worried about whether you call it retaliation or something else, it is a worry. One thing I would say though too is look, there is an argument for just barring utilities promoting these chargers and saying, go up to a certain line, and that’s it. We haven’t quite taken that position. Our view has been, if as long as we can create a competitive playing field, great, let the utilities try it and try to compete. You got to make sure the pricing works and the fair access to infrastructure. All those things work, but then you know what, if they can design a better mousetrap and outcompete, whether it’s the local convenience store or look, we’re seeing these things at grocery stores and other places too, good for them and good for everybody. If they can do that on sort of a level playing field basis, that’s really the key from our perspective. And it’s not then a, Hey, let’s slow down development because utilities can’t do it. It’s just no, let everybody do this on an equal basis, and then you get private investment and some public investment and see how that goes.

John Farrell:

I want to follow up on that because kind of curious, if you have an example of a state or place where you feel like that’s been done successfully because the skeptic in me says, well, as long as the utility basically owns the grid and is in charge of that process of connecting things, as long as the utility is in charge of the billing process. I mean, are you saying what you’d want to do is sort of firewall between the utilities operations side and their EV charging side and they have to sort of spin off their own EV charging business that then goes through the same connecting process, pays the same fees for charging that your members would pay?

Doug Kantor:

Not sure I’ve thought through that well, but that’s a great idea.

What we’ve talked about is look, making sure the charging part of the utilities business pays the same thing to get electricity that the private business does so that there’s some price and parity there dealing with the demand charges. Those kinds of things have been our big concern. A lot of this look is there’s experiments happening on the fly. Georgia actually passed some interesting legislation, which did a couple of things. It sort of said, hey, the first option for charging locations that they’re doing through grants and otherwise throughout the state is going to be private sector. But then they didn’t have a clause where if there were places the private sector didn’t want to bid to put in locations, then the utility could do it and fill in those gaps. We’re seeing these experiments happen, and there are places where there’s evidence that it can work. We think it will work, but we’ll see. We’re learning all the time. This is a new area and a new use of electricity that I think is challenging what we’ve done in the regulatory context in electricity for a while.

John Farrell:

I wanted to ask you just one last thing, which is in those situations where your members are dealing with the issues around demand charges, it’s one of the things that I’ve read about is that some organizations, some businesses that are placing chargers or doing batteries at the same time as a way to deal with that demand charge. Are there mitigations, I guess, for lack of a better word, that your members have found if they haven’t been able to get the utility or the regulators to change the rate structure in a way that’s workable, but other ways that they’ve found to sort of solve that problem of making this infrastructure work in a way that they’re not losing money offering electric vehicle charging?

Doug Kantor:

Yeah. There are a few interesting approaches here. I mean, one that we should all be worried about is, look, we do see numbers sometimes where they can’t make any progress on this. Say, well, I’m not putting in, I’m going to wait and see, and if at some point the environment is more conducive to private investment, then I’ll come. So that’s one. But to your point, absolutely. There are some providers who, what they do is they put in large batteries on the site and then those batteries get charged at a slower rate, and you don’t have to spike in demand charge. And when somebody pulls up, they’re actually drawing power from the battery into their own car battery to charge up, and that works out well. There are some providers actually who have a whole different approach where they’ve come up with modular, there’s modular car batteries, and they have literally a robot that it’s almost like a NASCAR pit stop.

They’ve got a tent and a robot comes in, pulls out the old battery, puts in a new one, or just a reused one, and you’re driving off on your way, and this actually happens pretty quickly. It’s more on the timing of filling up your car with gas and you’ve got a fully charged battery that then they take the battery they just took from you and charge it up slowly and put it into the next person or what have you. So there are really interesting innovations happening. Both of those, I would say there are some limitations in that they take up more space, whether it’s putting in the big battery or having all the machinery to switch out batteries, and so that’s challenging. Some areas it can work well, some areas not so well, but people are working on all those ways to try to get around some of these problems.

John Farrell:

It’s fascinating. I love the idea of the NASCAR style pit stop, although I can only imagine the challenge of different vehicles, different vehicle manufacturers, different batteries. You got to have one heck of a pit crew there to deal with all of those challenges.

Doug Kantor:

Yeah, so apparently there is some standardized system in place where this modular battery thing works. It’s way above my head. I don’t fully understand it, but it does work for a ton of the models out there on the market.

John Farrell:

Well, this really interesting perspective about electric vehicle charging, I think a lot of people haven’t thought a whole lot about who should own this infrastructure and the implications of that decision, especially folks who really just work more on the climate advocacy side. So it’s great to have you on and to have you give a different perspective.

Thank you so much for listening to this episode of Local Energy Rules with Doug Kantor from the National Association of Convenience Stores, where we discussed competitive markets for public electric vehicle charging. On the show page, look for a link to the grid strategy study about electric vehicle charging ownership, as well as my prior podcast on the subject of EV charging with Lynn Kiesling. You can also find more of ILSR’S work on electric vehicles and the overlap with distributed energy resources like rooftop solar from our Energy Democracy Initiative. Local Energy Rules is produced by myself and Maria McCoy with editing provided by audio engineer Drew Birschbach. Tune back into Local Energy Rules every two weeks to hear how we can take on concentrated power to transform the energy system. Until next time, keep your energy local and thanks for listening.