Electric Vehicles Plugging into Colorado Regulation, 0220 COBJ, Vol. 49, No. 2 Pg. 34
| Author | BY MARK DETSKY, GABRIELLA STOCKMAYER, AND KC CUNILIO |
| Position | Vol. 49, 2 [Page 34] |
ENERGY LAW
BY MARK DETSKY, GABRIELLA STOCKMAYER, AND KC CUNILIO
Th is article describes the current state of electric vehicle regulation in Colorado.
The transition to electric vehicles (EVs)1 has begun in earnest. EV sales in the United States grew over 80% in 2018 compared to 2017.2An IHS Markit forecast predicts that EV sales in the United States will experience explosive growth and expand to about 1.28 million units in 2026, compared with just less than 200,000 units in 2018.3
In 2018 Colorado ranked fourth nationwide in EV sales.[4]Support for EV use is evident in Colorado's recent legislative and other regulatory efforts. This article discusses how Colorado is incorporating die use of EVs into public utility law, with an eye toward other jurisdictions' approaches.[5]
The EV Landscape
EVs represent a transition from a market dependent on fossil fuels to an electrified auto market. This change requires substantial electric load growth for public utilities. Electric utility regulators are tasked with balancing the public interest in integrating beneficial new technologies against providing adequate protections for system reliability and ratepayer cost. EVs add another intricacy for utilities and state regulators managing the impacts of distributed electricity generation, demand-side management, smart grids, energy storage, and net metering—technologies that have each disrupted the electric utility market in the last decade. However, unlike other forms of electric load, EVs move in all directions and at all times from their primary meter. And EVs require significant refueling infrastructure to become fixtures on U.S. roads.
EVs can provide system-wide benefits and achieve important environmental and economic goals, principally toward the goal of mitigating global climate change contributions from motor vehicles. EVs produce about half of the carbon dioxide emissions per mile of gasoline fueled vehicles, even with coal fired generation comprising a significant portion of the electric generation portfolio.6 Policies that address overcoming the barriers to EV market growth are critical if EV technology is to successfully merge into gasoline-fueled roads.
To achieve widespread adoption, fueling an EV must eventually be comparable in ease to fueling a gasoline-powered vehicle. This cannot happen in a vacuum because EV charging speed and the times of day when EV charging occurs affect electric demand. Governments must plan for EVs' presence on roads and in neighborhoods, which necessarily involves joint efforts from the auto industry, utilities, electric utility regulators, departments of transportation, local governments, and many other stakeholders.
Colorado EV Regulation
The popularity of EVs in Colorado is mirrored in governmental efforts aimed at promoting their u se. Colorado has recently made significant strides in this area in the form of executive action, new legislation, and regulatory implementation.
Governor Polis Executive Actions
On January 17, 2019, a mere nine days after his inauguration, Colorado Governor Jared Polis signed Executive Order B-2019-002 (the Executive Order), which supports the state's transition to zero emission vehicles (ZEV) by adopting California's ZEV rules.7 The Executive Order joins Colorado with Connecticut, the District of Columbia, Maine, Maryland, Massachusetts, Minnesota, New Jersey, New Mexico, New York, Oregon, Rhode Island, and Vermont in following California's ZEV standards.
The Executive Order directed the Colorado Department of Public Health and Environment (CDPHE) to develop rules establishing a state ZEV program and to propose the program to the Air Quality Control Commission (AQCC) by May 2019. The Executive Order also called for anew Transportation Electrification Work group and for the Colorado Department of Transportation (CDOT) to develop a Zero Emission Vehicle and Clean Transportation Plan to embrace ZEV adoption in the state. And it recommits Colorado to the REV West Memorandum of Understanding, discussed below.
On May 30,2019, Governor Polis released his administration's "Roadmap to 100% Renewable Energy By 2040 and Bold Climate Action" (the Roadmap).8 The Roadmap was released in conjunction with the end of Colorado's 2019 legislative session, during which Governor Polis signed seven energy and climate bills, along with four EV-specific bills.
The Roadmap includes a policy goal of eliminating greenhouse gas pollution by the year 2030.9 A major aspect of the Roadmap is the electrification of Colorado's transportation sector, as reflected in its inclusion of a goal to put 940,000 ZEVs on Colorado roads by 2030.10 To meet this effort, the administration has allocated roughly $14 million of the approximately $70 million Volkswagen (VW) settlement funds (resulting from the settlement between VW and the U.S. Environmental Protection Agency over VW's air quality violations) to transit agencies for the deployment of cleaner buses.11 The Roadmap also cites the passage of various new laws supporting EV acceleration.
2019 General Assembly Actions
Consistent with the Governor's policy directives, the Colorado Legislature passed a number of bills in 2019 aimed at clean energy and EVs.12
SB 19-077: Electric Motor Vehicle Public Utility Services
SB 19-07713 is the primary legislative direction to the Colorado Public Utilities Commission (COPUC) to implement the Executive Order. The bill clarifies and expands the role of EVs in Colorado public utility law. It acknowledges that the number of EVs registered in the state has doubled over the last three years, but "[widespread adoption of electric vehicles requires that public utilities increase access to electricity as transportation fuel... ."14 The law, which became effective on August 2,2019, clarifies that public utilities may own charging stations and earn a return on their investment.15
A major feature of SB 19-077 is its requirement that regulated electric utilities submit Transportation Electrification Plans (TEPs) to the COPUC by May 2020. TEPs are slated to become the primary vehicle for utility investments and strategic planning across multiple elements of EV integration. TEPs will constitute "application[s] for a program for regulated activities to support widespread transportation electrification within the area covered by the utility's certificate of public convenience and necessity."16 TEP applications must be filed by qualifying public utilities every three years starting May 15, 2020.17
Pursuant to CRS § 40-5-107(b)(I) through (IV), TEPs must address
■ investments or incentives to facilitate the deployment of customer-owned or utility-owned charging infrastructure, including charging facilities, the infrastructure between the traditional utility/ customer break-point to the EV charge (make-ready infrastructure),18 and associated electrical equipment that supports transportation electrification;
■ investments or incentives to facilitate the electrification of public transit and other vehicle fleets;
■ rate designs, or programs that encourage vehicle charging that supports the operation of the electric grid; and
■ customer education, outreach, and incentive programs that increase awareness of the programs and related benefits.
The bill also requires utilities to facilitate the deployment of charging stations for electric vehicles and to support EV adoption in their service territories.19 For example, the Polis Administration is working with Charge Ahead Colorado, a grant program administered by the Colorado Energy Office and the Regional Air Quality Council, to meet the goal of installing 234 community-based EV charging stations by the end of the 2019 fiscal year. Finally, the bill requires the COPUC to consider whether TEPs provide "access for low-income customers" and the effect of TEPs on low-income communities and ratepayers.20
HB19-1159: Modify Innovative Motor Vehicle Income Tax Credits
HB 19-1159,21 which went into effect on August 2, 2019, supports consumer purchases of plug-in vehicles by modifying the amounts of existing income tax credits for electric or hydrogen fuel cell vehicles. The bill also extends the number of years of the tax credit availability from 2021 through 2025.22 The tax credits in HB 1159 gradually decrease from the current $5,000 level, to be phased out by the end of 2025. The bill also allows ride-sharing companies like Uber and Lyft to claim the full tax credit so long as the vehicles are provided to the companies' drivers under short-term rental programs.23
HB 19-1198: Electric Vehicle Grant Fund
HB 19-119824 enlarges the scope of Colorado's Charge Ahead program by allowing for more flexibility in how the state's EV Grant Fund is used. The bill, effective as of August 2, 2019, prioritizes funding for the administration of charging station grants as well as how to offset charging station operation costs. This bill is crucial to the goal of attaining the state goal of reaching 940,000 EVs by 2030.
HB 19-1261: Climate Action Plan to Reduce Pollution
HB 19-126125 sets economy-wide targets for the reduction of greenhouse gas pollution and includes statewide goals of a 26% reduction by 2025, a 50% reduction by 2030, and a 90% reduction by 2050 of the levels of statewide greenhouse gas (GHG) emissions that existed in 2005.26 The bill, which became effective on May 30,2019 when Governor Polis signed it into law, includes a delegation of authority to the AQCC to adopt rules to implement progress toward those GHG reduction goals.27 The rulemaking is expected to begin in 2020, and along with SB 19-09628 will...
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