The House Highways and Transit Subcommittee on April 30 held a three-hour hearing examining electrification policy.
The Subcommittee, which invited NATSO to testify, focused on the Biden Administration’s policies to increase the number of electric vehicles on the nation’s roads.
Representing NATSO was Kim Okafor, General Manager for Zero Emissions at Love’s Travel Stops and Trillium Energy Solutions. Okafor joined three other witnesses, including Taki Darakos, Vice President of Vehicle Maintenance and Fleet Services, PITT OHIO, on behalf of the American Trucking Associations (ATA); Kevin Coggin, Executive Director, Coast Transit Authority; on behalf of the Community Transportation Association of America (CTAA); and Nick Nigro, Founder, Atlas Public Policy.
During the hearing, lawmakers and panelists discussed the challenges of building out a nationwide network of electric vehicle charging stations for both cars and commercial trucks, the role of public utilities, deployment of the National Electric Vehicle Infrastructure (NEVI) grants as well as EPA’s recent greenhouse gas rules for cars and trucks.
Of importance to NATSO members, lawmakers and witnesses discussed private sector investments in electric vehicle charging, the need for public utilities to perform the necessary power grid restructuring and the need for all businesses to pay the same rate for electricity to supply their charging stations.
With the right policy framework and incentive structure, fuel retailers provide the best opportunity for advancing alternative fuels, including electricity, into the marketplace.
Okafor testified that any changes to the transportation energy market must work for the American consumer to be viable. Electric vehicle drivers expect a seamless and predictable experience like their current refueling experience, which includes safe, accessible amenities and affordable, competitive prices.
Responding to a question from Rep. Dusty Johnson (R-S.D.) about the role of public utilities, Okafor said Love’s has 640 stores in 42 states, requiring partnership with hundreds of utilities. Okafor testified that the uncertainty surrounding time required for utility upgrades, the costs associated with those upgrades, and a lack of transparency in the rate structure is a “black box” that makes it challenging for fuel retailers.
“We ask how long it will take to get the power we need and how much will it cost. For the investment, the utility portion is always a ‘black box.’ That uncertainty makes the investment challenging,” Okafor said.
Okafor cited a location in Coachella, California, where Love’s expected to spend $50,000 for the utility upgrade to build out a location. The utility upgrade ultimately will cost $300,000 and take a year to install.
“Everybody realizes the fuel part of your business is a tight margin, I assume that is true whether you are selling electricity or gasoline,” Congressman Johnson said. “It’s a little hard to recover a $300,000 line extension fee, I would think.”
Okafor testified that public utilities impose high demand charges on fuel retailers and said all businesses should pay the same, transparent rate to supply power to their electric vehicle charging stations.
Demand charges represent the highest kilowatt that is utilized during a 15-minute period over a 30-day period. Okafor testified that if one car charges for 15 minutes at 10$ per kilowatt hour, it translates into a $1,000 charge for the fuel retailer. Yet the customer may have only spent $15 at the location.
Okafor said that the rate which public utilities charge fuel retailers also changes without notice. “That lack of transparency and lack of ability to choose a new provider puts us in a very tight spot,” Okafor said. “It's difficult to recover that sort of investment when utilization is low.”
Minnesota Congressman Pete Stauber (R-Minn.) expressed concern with unfair competition from public utilities, which can increase their monthly charges to all customers to recoup their EV charging investments.
Specifically, Rep. Stauber cited Xcel Energy’s proposal to build, own and operate EV charging stations in Minnesota under a $330 million plan funded by rate basing its customers.
Congressman Mike Bost (R-Ill.) underscored the importance of entrepreneurship and allowing the market to drive the transition to electric vehicle charging. “This nation has been really, really, really good at allowing the free market to work,” Congressman Bost said. “When the internal combustion engine was created, the government didn’t have to go out to set up gas stations. Who did it? We the free people. We had entrepreneurs who saw a golden opportunity.”
Okafor emphasized the need for the Federal Highway Administration to harmonize the application standards for NEVI grants to ensure a uniform charging experience for customers driving from state to state.
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