Public Utilities and Transportation Electrification

Author:Alexandra B. Klass
Position:Distinguished McKnight University Professor, University of Minnesota Law School
Pages:545-617
SUMMARY

This Article examines the rapidly evolving role of the nation's electric utilities in developing the network of public electric vehicle (“EV”) charging stations across the country required to facilitate the growth of EVs. As EV adoption in the United States continues to rise, the roles that governmental entities, electric utilities, and market actors will play in deploying the EV charging stations necessary to support transportation electrification remains a central... (see full summary)

 
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545
Public Utilities and Transportation
Electrification
Alexandra B. Klass*
ABSTRACT: This Article examines the rapidly evolving role of the nation’s
electric utilities in developing the network of public electric vehicle (“EV”)
charging stations across the country required to facilitate the growth of EVs.
As EV adoption in the United States continues to rise, the roles that
governmental entities, electric utilities, and market actors will play in
deploying the EV charging stations necessary to support transportation
electrification remains a central question. This question raises a multitude of
issues relating to consumer demand for EVs, competitive markets, utility rate
design, government mandates and incentives, policies to reduce carbon
emission and other air pollutants, and equity concerns. This Article focuses
specifically on state public utility commissions, which will review and approve
electric utility proposals to invest hundreds of millions of dollars in EV
charging infrastructure that would be paid for, in most cases, by utility
customers through cost-of-service ratemaking. This Article considers how state
approaches on this issue may differ, at least in the short term, depending on
varying state environmental policies, politics, geography, and utility
regulatory structure. One constant among the states, however, is the range of
rulemaking, investigatory, and adjudicative processes available to state
utility commissions to consider these proposed utility investments. This Article
concludes that public utility commissions in each state should focus on using
their investigative and adjudicative authority to create a robust
administrative record for EV charging-related decisions—both general
rulemaking decisions and individual utility proposal decisions. These
investigative and adjudicative proceedings can support decisions today
regarding short-term utility pilot programs, as well as form the basis for
broader, far-reaching policies to govern development in the long term. Notably,
there are good reasons for state utility commissions to be central players in this
*
Distinguished McKnight University Professor, University of Minnesota Law School. I
received extremely helpful comments on earlier drafts of this Article from David Adelman, Max
Baumhefner, James Coleman, Noah Garcia, Edward Garvey, Alan Gleckner, Steve Huntoon,
Travis Kavulla, Felix Mormann, Ari Peskoe, Jim Rossi, J.B. Ruhl, Richard Pierce, Miriam Seifter,
Andrew Twite, and Joel Zipp. Maya Digre, Karrah Johnson, Devin Driscoll, Zach Sibley, and Adam
Voskuil provided valuable research assistance.
546 IOWA LAW REVIEW [Vol. 104:545
process. State commissions, acting in their adjudicative capacity, can be more
nimble than state legislatures, allowing for experimentation over different
utility rate proceedings, serving an information gathering function for
subsequent legislative action and commission rulemaking, and facilitating
early investment in EV charging, where appropriate.
I.INTRODUCTION ............................................................................. 547
II. ELECTRIFYING TRANSPORTATION ................................................. 553
A.EARLY YEARS OF EV DEVELOPMENT AND RECENT TRENDS ........ 553
B.ENVIRONMENTAL, ELECTRIC GRID, AND CONSUMER
BENEFITS OF EVS ..................................................................... 556
C.EV CHARGING ......................................................................... 559
1.Types of EV Chargers and Battery Technology .......... 559
2.The EV Charging Industry ........................................... 562
D.THE VOLKSWAGEN SETTLEMENT: AN INFUSION OF FUNDING
FOR EVS, EV TECHNOLOGY DEVELOPMENT, AND EV
CHARGING STATIONS ............................................................... 564
III.PUBLIC UTILITIES AND EVS ........................................................... 567
A.ELECTRIC UTILITY REGULATION 101: AN INDUSTRY
IN TRANSITION ........................................................................ 567
B.THE UTILITY “DEATH SPIRAL AND THE PROMISE OF EVS ......... 569
C.FEDERAL, STATE, LOCAL, AND REGIONAL POLICIES TO
ENCOURAGE EV USE AND DEVELOP EV CHARGING .................... 571
D.THE RELATIONSHIP BETWEEN PRIVATE EV CHARGING
COMPANIES AND ELECTRIC UTILITIES ....................................... 574
IV. STATE POLICY APPROACHES TO UTILITY INVESTMENT IN
EV CHARGING INFRASTRUCTURE .................................................. 577
A.THE CALIFORNIA ZEV MODEL—USING DECARBONIZATION
GOALS TO SUPPORT EV ADOPTION AND UTILITY EV
CHARGING INVESTMENT .......................................................... 578
1.California’s ZEV Program ............................................. 579
2.California Policies to Promote EV Charging
Infrastructure ................................................................ 581
3.Policies Governing Utility Investment in EV
Charging in Other ZEV States ...................................... 586
B.BEYOND THE ZEV STATES ........................................................ 591
1.Legislative Support for Utility Investment in EV
Charging: Nevada .......................................................... 592
2.Public Utility Commission Investigative Dockets:
Michigan ........................................................................ 594
2019] PUBLIC UTILITIES AND TRANSPORTATION ELECTRIFICATION 547
3.Utility-Initiated Requests for Rate Recovery for
EV Investments: Kansas, Missouri, and Kentucky ....... 599
i.Kansas and Missouri ................................................ 599
ii.Kentucky ................................................................... 605
4.Rate Recovery for Utility Investments in EV
Charging Through Rate Case Settlements:
Florida and Ohio ........................................................... 607
V. EVALUATING THE UTILITY ROLE IN EV CHARGING
INVESTMENT .................................................................................. 609
A.JURISDICTIONAL QUESTIONS AND ESTABLISHING
REGULATORY FRAMEWORKS ..................................................... 611
B.INSTITUTIONAL COMPETENCE: THE ROLE OF UTILITY
COMMISSION RULEMAKING, INVESTIGATION, AND
ADJUDICATION ........................................................................ 612
VI.CONCLUSION ................................................................................ 617
I. INTRODUCTION
The U.S. electric utility industry and the nation’s transportation system
are both in a period of rapid transition that has brought new challenges and
opportunities with it.1 The next three to five years may reveal the biggest shift
in both the electricity sector and the transportation sector in a century. These
changes will transform the automobile industry, the use of electricity on a
broad scale and, as a result, our modern world. This Article evaluates how
developments in legal policy, technology, and economics surrounding
electric vehicles (“EVs”) and EV charging infrastructure are driving these
changes. More importantly, this Article considers the variety of approaches
states are taking to address these changes in the context of electric utility
regulatory design, and the lessons to be learned as the nation moves through
this critical transition period. Because of the U.S. regulatory structure
governing both electric utilities and transportation planning, the states rather
than the federal government will play an outsized role in how transportation
electrification develops in the United States. Thus, “early adopter” states that
1. See generally, e.g., MIT ENERGY INITIATIVE, UTILITY OF THE FUTURE (2016) (examining how
use of electricity is likely to change over the next decade); William Boyd, Public Utility and the Low-
Carbon Future, 61 UCLA L. REV. 1614 (2014) (discussing the challenges associated wit h emission
reductions); Nancy E. Ryan & Luke Lavin, Engaging Utilities and Regulators on Transportation
Electrification, 28 ELEC. J. 78 (2015) (analyzing the challenges with the electrification of vehicles);
Shelley Welton, Public Energy, 92 N.Y.U. L. REV. 267 (2017) (discussing public forms of energy
ownership); e21 Initiative, GREAT PLAINS INST., e21initiative.org (last visited Sept. 5, 2018)
(providing recommendations to develop and implement new approaches to utility regulation in
Minnesota); REV Initiatives, N.Y. ST., https://rev.ny.gov/rev-initiatives (last visited Sept. 5, 2018)
(discussing “the initiative[] to build a clean, resilient, and more affordable energy system”).

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