Sometimes it takes a little push to get things moving in the right direction.
So it is in Virginia, where state officials are taking meaningful steps toward promoting electric vehicle (EV) use, a critical component of reducing transportation emissions. Transportation is the largest greenhouse gas emitting sector nationwide and also accounts for the largest share of Virginia’s emissions, at 48 percent in 2017. The State Corporation Commission (SCC) is requesting comments on issues related to the increased deployment of EVs.
David Gardiner and Associates (DGA) and C2ES argued the best way to address this issue is through targeted policy, EV-friendly utility rates, and utility investment in charging infrastructure. We shared these ideas via comments submitted in June to support our joint project to advance electric trucks in partnership with the Retailer Industry Leaders Association (RILA) and Atlas Public Policy (Atlas). We undertook this project because so many retailers and their product delivery and logistics providers are beginning to electrify their fleets, and we plan to fill the gap in much needed research and analysis in the market landscape of EV trucks. Here’s an explanation of the policies we proposed, and what they can do to advance vehicle electrification in Virginia.
First, we urged the SCC to advance policies to help put more electric trucks on Virginia roads. Doing so offers many benefits for Virginians, including cost savings for retail and trucking companies and environmental and public health benefits for all. Electric trucks have lower maintenance costs compared to internal combustion vehicles, since EVs do not have expensive parts like transmissions, scrubbers, and belts. In addition to not emitting carbon pollution, electric trucks do not emit harmful tailpipe pollutants, which include nitrogen oxides, other ozone forming compounds, and particulate matter. They are also quieter compared to diesel trucks, reducing impact to drivers’ hearing.
Second, we urged the Commission to focus on expanding charging infrastructure through utility investment. Analysis from Atlas indicates that expanding charging infrastructure is the most important factor in accelerating electrification of trucking fleets and delivering consumer, environmental, and public health benefits. Furthermore, evidence from other states demonstrates that electric utilities must play a critical role in expanding charging infrastructure access for truck operators looking to electrify fleets. We urge the Commission to follow the models established in other states by inviting and approving similar utility investment in charging infrastructure for trucks in Virginia.
Finally, we addressed questions put forward by the Commission regarding rate designs and how they should be structured to make electrification pay off. Using analysis from Atlas’s EV Hub Utility Filings Dashboard, we pointed to examples of effective rate design in other states, demonstrating that charging offers a straightforward way to advance medium- and heavy-duty electrification, often at no additional cost to ratepayers. Despite concerns about the distribution of costs and benefits of utility funded charging infrastructure, recent research suggests that increased revenues for utilities actually lower costs for low-income and non-EV households.
Furthermore, rates can be designed with incentives for fleet operators to charge during off-peak times. This would reflect the cost of providing electricity at different times and deliver the added benefit of load balancing by spreading demand more evenly throughout the day. Utilities such as Southern California Edison, Xcel Energy, and Consolided Edison have deployed such rates that help medium- and heavy-duty vehicle operators save money. Again, we urged the commission to adopt rate designs based on the effective models from other states.
Along with regulators in California, Washington, New York, Hawaii, and other states, the SCC recognizes that increased deployment of EVs will bring significant changes to electricity markets. As more electric vehicles drive the roads in different parts of the country, assessing these impacts ahead of surges in EV sales can allow policymakers to make more informed decisions that lead to positive environmental and financial benefits for all.