Regulators consider e-cars and affordability
VERMONT — As Vermont’s regulators, utilities, industry reps and nonprofits gear up for the electric vehicle revolution, accessibility for lower income people to affordable e-vehicles remains a major challenge.
“If vehicle electrification becomes a solution that’s only available to the wealthy, it will fail,” said Sandra Levine, senior attorney at Conservation Law Foundation, during a Public Utility Commission (PUC) workshop held in the Statehouse on Monday. “We will not achieve the goals that we have set out to reduce greenhouse gas emissions and provide a clean environment for ourselves and future generations.”
The PUC held the workshop as part of an ongoing investigation into how regulators can work with utilities and others to spur electric vehicle use in Vermont with minimal impact to electricity customers. The investigation was mandated in Act 158, a general transportation bill passed last session, and will culminate in a report next July. As transportation accounts for the majority of Vermont’s greenhouse gas emissions, the report must include a strategy to encourage electric vehicle adoption at a pace in line the state’s emissions reductions goals.
PUC Commissioner Margaret Cheney queried a panel of car and charging station industry representatives on whether the state should focus initially on promoting electric vehicles or developing a network of fast chargers.
“What has to come first?” Cheney asked. “Are we having a chicken and egg problem in terms of lack of (charging) infrastructure for the cars, and therefore fewer cars, or vice versa?”
During the workshop, panelists provided examples of both electric vehicle incentives and charging station rollouts from other states and provinces which have more aggressively promoted electric vehicles, like neighboring Quebec. While the average driver does 80 percent of charging at home, access to fast charging stations along highways is key to assuage drivers’ fear of running out of juice by the side of the road – a dread called “range anxiety,” noted multiple panelists.
Jennifer Bosco, attorney at the National Consumer Law Center, said that the “shift to electric vehicles presents a lot of potential benefits that we see for lower income consumers.” One major benefit was lower maintenance and operational costs as electric vehicles have fewer parts and make use of technologies like regenerative braking, which put less wear on parts.
But the “sticker shock” of the higher purchase price is still a barrier, said Peter Walke, deputy secretary of the state Agency of Natural Resources, because there remains “a lack of understanding about the overall price structure.”
Additionally, many lower-income people rarely buy a new vehicle or do not own one to begin with, noted Bosco. “Currently the average vehicle age in the U.S. is over 11 years old, which indicates how long consumers hold on to their cars and how this might not be a fast transition for a lot of consumers,” she said.
A “reasonable cost” car subscription service could be a way to provide lower income drivers with access to electric vehicles without having to make large financial commitments, said Levine. Walke noted that the used electric vehicle selection will continue to grow as the market matures.
While purchasers of electric vehicles and plug-in hybrids receive a $7,500 federal tax credit, most lower income Vermonters would not be able to take advantage of that, said Erhard Mahnke, coordinator of the Vermont Affordable Housing Coalition, in an interview Monday.
“I think for most low-income Vermonters, just keeping a safe, functioning vehicle on the road is hard enough,” he said. “With the lowest priced electric models in the $30,000 range new, even after tax credits I would think that puts them out of reach.
Bosco noted that direct rebates for lower or moderate income people, like California and Oregon have, are more practical. Although Vermont does not have a state-specific incentive, utilities and dealerships have partnered to offer incentives for ratepayers interested in switching to electric vehicles. Both Green Mountain Power and Burlington Electric Department offer specific rebates for lower income people, representatives said.
Access to home charging was another barrier discussed. Josh Castonguay, chief innovation officer of GMP, said that the utility offers free home chargers for customers and special pricing packages to encourage off-peak charging.
But people living in apartment buildings or multi-family homes face additional challenges in installing a charging station where they park, noted Travis Allan, vice president of Canadian charging network FLO. On average, renters in Vermont have lower household incomes than homeowners, said Mahnke.
According to Allan, changing building codes is a way to address that issue. Requiring buildings to have enough electrical capacity to charge vehicles and conduits that would bring power to charging stations in parking areas could allow for more charging in apartments and workplaces.
Jen Hollar of the Vermont Housing and Conservation Board, which is a key affordable housing funding source in Vermont, said in an interview that while VHCB funded projects have strict efficiency standards, capacity for electric vehicle charging is not a current requirement. Proximity to downtown areas or public transit is another criteria the board uses when selecting housing projects to fund, she noted.
Bosco cautioned that short term “electric rates (could) go up as a result of those investments” if utilities invest in electric vehicle infrastructure.
“So utility investments should be limited to those that are in the public interest and would not otherwise be taken by private investors,” she added. Most states that have looked into this have predicted “small” rate increases, and that building on existing energy assistance programs could shield lower income customers, said Bosco.
The state is using a portion of VW settlement funds to put out $2.4 million in grants for charging station projects in downtowns, park and rides, colleges, apartment buildings and other high-use areas.
Bosco and Levine pointed to electrification of buses as a way that people who don’t have cars or who use public transit could access zero or low emissions vehicles without purchasing one. The state is rolling out an [electric school bus pilot program] with part of the VW settlement money. School buses are notorious for producing noxious diesel fumes that can collect inside bus cabins, leading some to tout electric buses as a way to reduce children’s exposure to air pollution. Several utility managers at the workshop discussed electric bus pilot programs underway as partnerships between utilities and transit companies.
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