But the PUC dodges a decision to incentivize a public charging infrastructure

Every time someone with an electric vehicle plugs it in and charges it overnight, they are saving money for their friends, neighbors and every other customer of their electric utility. Every time.

Don’t believe me? Here’s how it works. Electric utilities don’t make money the way regular businesses do. Instead of simply offering a product and seeing how many people buy it, they are granted a monopoly to build and maintain the infrastructure that provides an essential service: electricity for our hospitals, our factories, our heat and our fridges. Because they are a “natural” monopoly (it wouldn’t make sense to run competing sets of wires to each household), every business decision they make is doublechecked and approved by government regulators in an open public process.

In that process, the company lists everything they think they should get paid for: the cost to install their electricity distribution infrastructure, the cost of the labor needed to maintain it, the cost of the coffee machines needed to maintain the laborers, etc. Once these costs are compiled and approved, that cost is divided by how much electricity the utility thinks they will sell, and voila, that’s the rate you pay on your bill.

Normally, when electricity consumption rises, electric utilities need to add more poles and wires or upsize certain equipment like transformers and substations to meet the new load.

But overnight EV charging is different.

Our electricity demand is dramatically lower overnight. On the gloomy Sunday that I wrote this, the low demand point at 3 a.m. required 9,500 megawatts of generation across New England, as opposed to the 13,400 megawatts the 8 p.m. peak required. Charging cars at night means more sales using the same equipment.

So, if your neighbor charges their EV at night, they’re saving you money.

Powerful incentive

That’s why it’s important that New Hampshire’s utility regulators took a big step earlier this month when they approved plans for the state’s utilities to develop new rates for EV charging that would give consumers cheaper electricity if they charge overnight, and charge extra if they plug in during peak hours. EV drivers will have the option to sign up for a rate that has a “peak” period in which charging is about double the cost of average rates, and an overnight rate in which charging is about half the cost of average electricity rate.

To turn this into an internal combustion engine analogy: If you had the choice between two gas stations across the street from each other, and one had gas that was three times cheaper, where would you fill up? Similarly, these time-varying rates will be a powerful incentive for EV owners to charge during times that save us all money.

Unfortunately, in the same order, regulators did not have the nerve to fully confront one of the biggest barriers to EV adoption: demand charges.

These charges are a flat fee typically levied on large electricity users. If you’re a factory that steadily uses hundreds of kilowatts to churn out products you can sell, this type of rate design makes sense; your facility is more expensive to serve with electricity than a typical home or small business, and the demand charge recoups that extra system cost.

However, when it comes to EV charging — especially fast charging, which uses a lot of electricity for a very short amount of time — these charges can absolutely cripple the economics of public charging.

A demand charge for a fast charger could be as much as $1,500 a month. Some rural chargers — especially at this moment, when EV adoption is still in its infancy — may only be used a handful of times each month, so those demand charges can represent 90 percent of the total electrical bill.

The math here is easy: Demand charges, when EV adoption is in its infancy, mean that it’s almost impossible for charging companies to make money.

Other states, recognizing the need to develop a robust public charging network that serves residents, businesses and visitors alike, have instituted “demand charge holidays,” through which they waive demand charges for as many as 10 years. Others have recommended demand charges be instituted on a sliding scale as EV adoption rises. In New Hampshire, though, regulators simply opted to cut the demand charge and increase the per-kWh charges customers pay for public fast charging to compensate for that cut. Several stakeholders testified during the PUC hearings that this cut was not sufficient to make public charging profitable in a state that still has very few EVs on the road.

What does this mean? It likely means that until New Hampshire gets serious about creating a policy that makes the business of EV charging possible, we will continue to lag surrounding states when it comes to installing public charging facilities. Which likely means that New Hampshire will continue to lag surrounding states when it comes to EV adoption. Which means that the potential for enormous benefit — cheaper electric rates for all consumers, thanks to these new time-based EV charging options — will remain out of reach.

Sam Evans-Brown is executive director of Clean Energy NH, an organization that advocates for and promotes the use of clean energy and technologies.

Until NH creates a policy that makes EV charging possible, we’ll continue to lag surrounding states