Mo. court says regulators oversee utility charging stations

Source: Jeffrey Tomich, E&E News reporter • Posted: Wednesday, August 15, 2018

A Missouri court disagreed with a 2017 decision by the Public Service Commission that it lacks regulatory authority over utility-owned vehicle charging stations because the equipment doesn’t meet the statutory definition of “electric plant.”

The Missouri Court of Appeals, Western District, issued the opinion last week in a case brought by Kansas City Power and Light Co. regarding the PSC’s May 2017 order.

A three-judge panel ruled that the commission erred when it concluded that EV charging stations are like clothes dryers at a laundromat. The PSC reasoned that dryers are used to provide a service and use electricity, but they are not electric plants subject to regulation.

The 20-page court order called the analogy “unpersuasive.” The judges instead compared EV charging stations to self-serve gasoline stations.

“Just as in the case of a self-service gasoline station, what takes place at one of KCP&L’s electric vehicle charging stations is not the service of charging a battery; instead, it is the sale of electricity to the vehicle owner, for use to power his or her electric vehicle,” Judge Alok Ahuja wrote.

Spokespeople for KCP&L and the PSC declined comment on ongoing litigation.

The Missouri case illustrates the kind of policy and legal questions state regulators are grappling with as they determine the appropriate role for monopoly utilities in building out EV charging infrastructure.

The PSC and other critics have expressed concern that allowing utilities to include EV charging investments in customer rates could stifle competition and innovation and result in subsidies at the expense of customers who don’t own plug-in vehicles. Advocates, including environmental groups that see transportation electrification as a key to slashing greenhouse gas emissions, believe some level of utility involvement is necessary to encourage EV adoption.

KCP&L announced its Clean Charge Network in 2015 — a bold plan to install 1,000 utility-owned and -operated EV charging stations across its service territory in Missouri and Kansas, despite there being only 900 EVs registered in the area (Energywire, Jan. 28, 2015).

Growing EV penetration would spur sales, enable more efficient use of the grid and lead to lower emissions and downward pressure on rates for all consumers, whether or not they owned a plug-in vehicle, the utility said.

The charging station build-out has spurred EV sales, according to testimony submitted by the Kansas City-based utility in a subsequent case pending at the PSC.

But regulators in Missouri and Kansas have so far rejected applications to recover capital expenditures related to the network.

Unlike in Missouri, where the PSC ruled that it didn’t have jurisdiction over utility-owned EV charging stations, Kansas regulators denied recovery on grounds that the utility didn’t justify recovery of the investment in rates.

Today, KCP&L is back in front of both commissions seeking recovery of EV charging stations as part of broader rate cases.

While the court said Missouri regulators can’t claim lack of jurisdiction, the order made it clear that the PSC still has lots of latitude in how it addresses KCP&L’s request for cost recovery.

“The commission has the authority to review the prudence of those activities; it may have authority to approve or disapprove particular expenditures before they occur; and it may have the ability through rate-design mechanisms to specify that the costs of particular activities will be borne solely by particular classes of ratepayers,” the order said.