The Energy Markets Podcast

S3E12: Rob Gramlich, Frank Lacey and Doug Kantor discuss the obstacles posed by utility monopoly regulation for private-sector EV charging infrastructure development

Jun 16, 2023

The podcast discusses the obstacles posed by utility monopoly regulation for private-sector EV charging infrastructure development. It highlights the lack of proper economic incentives in the current utility regulatory model and the challenges faced by convenience stores in the face of transportation electrification. The paper urges policymakers to address these problems early on to encourage private-sector investment and competition. The podcast also explores the transformation of the telephone industry as an example of regulatory changes and discusses the challenges and investments in electric vehicle charging, including the need for quicker charging technology and innovative solutions like battery replacement. Additionally, it explains the reasons behind the absence of gasoline sales at rest stops on interstate highways.

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Quick takeaways

Private sector competition in electric vehicle charging infrastructure leads to lower costs and better service for consumers.

Utility ownership of charging stations can stifle innovation, raise costs, and negatively impact customer experience.

Policymakers should support private sector involvement, reassess regulations, and prevent utility monopolies to ensure efficient and customer-focused investment in electric vehicle charging infrastructure.

Deep dives

Importance of Competitive Electric Vehicle Charging Stations

Competitive electric vehicle charging stations are crucial for efficient investment and providing the best service at the lowest cost to consumers. Utilities have a significant role in the energy transition, but involving them in charging station ownership can lead to disadvantages such as higher costs and poor service. The report argues for a structurally competitive market, allowing multiple players to invest in public charging stations and avoiding monopoly advantages. Different ownership models like utility, private non-utility, and hybrid are examined, with recommendations pointing towards supporting private investment and avoiding monopolistic practices.

Introduction

2min

Exploring the Role of Utilities in the EV Charging Market

15min

Obstacles of Utility Monopoly Regulation for Private-Sector EV Charging Infrastructure

16min

Obstacles to Private-Sector EV Charging Infrastructure Development

2min

Obstacles Faced in Private-Sector EV Charging Infrastructure Development

19min

Transformation of the Telephone Industry and Outdated Grid Technology

2min

Challenges and Investments in Electric Vehicle Charging

2min

The Absence of Gasoline Sales at Interstate Rest Stops

7min

Grid Strategy's Rob Gramlich and Electric Advisors Consulting's Frank Lacey detail the findings of a policy analysis paper they co-authored, Serving Customers Best: The Benefits of Competitive Electric Vehicle Charging Stations.* We also talk with Doug Kantor, general counsel for NACS, the international association for the convenience store industry, which sponsored the policy analysis.

The analysis found EV charging customers will be served best if utilities are not permitted to extend their monopoly into the nascent retail EV charging business. Yet utility regulators in states across the country are already ordering utility investments in public EV charging stations. The lack of proper economic incentives in the utility regulatory model is already becoming clear as reports abound that utility charging stations are often out of commission, in remote areas, or otherwise unavailable to drivers needing to charge their vehicles.

Convenience stores view transportation electrification as an opportunity, not a threat, to the century-old gasoline retailing business, Kantor says. NACS sponsored the policy analysis to highlight the "potholes in the road" facing convenience stores, he says. "The way electricity markets work now doesn't work really well with a competitive business model."

The paper identifies utility regulatory policies that will discourage private-sector investment in EV charging infrastructure and urges policy makers to address these problems now rather than later when the costs to consumers could be much higher.

"We're at the very beginning of this. It will be much more efficient for everybody if we get this right now instead of waiting. If we have to undo things that we've already done, that becomes costly and inefficient and subject to litigation," Lacey notes.

"There's going to be a tremendous amount of investment and [to] achieve the investment needs we have to do it efficiently. And we need to make it work best for consumers," Gramlich says. Utilities have a "key role" to play in electrification and the overall transition to a clean-energy economy, but EV charging should not be part of that, he says. "There are disadvantages to utilities being involved in certain activities ... that could harm service and could raise costs. And we want to get, in this sector like the other sectors, the best service at the lowest cost."

* Energy Markets Podcast Host Bryan Lee is a co-author of the NACS-sponsored EV charging policy analysis paper.

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