Utilities win as ALEC spars over electric vehicles

Source: Camille von Kaenel, E&E News reporter • Posted: Wednesday, May 2, 2018

Utility groups helped defeat a Koch brothers-backed effort to eliminate state incentives for electric vehicles and electric vehicle charging last week.

The American Legislative Exchange Council considered a policy against subsidies and mandates related to vehicles Friday. The organization gets conservative lawmakers and private-sector representatives together to draft model legislation language and is often credited with coordinating free-market bills across the country.

The draft resolution, pushed by the Institute for Energy Research and backed by groups like the Competitive Enterprise Institute, opposed all federal, state and local efforts to subsidize vehicles, fueling infrastructure or fuels. That would have put up major roadblocks for states looking to expand their electric vehicle sales to meet climate or energy independence goals and for utilities looking to build the infrastructure to fuel the new cars.

The Edison Electric Institute, a trade group for utilities, fought the legislation, which was eventually voted down.

The showdown displays rising tensions between the oil industry and utilities, the two most powerful forces in the energy industry, when it comes to electric vehicles. The two forces have increasingly clashed in state legislatures and at regulatory proceedings, where electric utilities are seeking approval for multimillion-dollar investments in electric vehicle charging infrastructure.

“The reality is driving on electricity costs less than driving on gas, and they don’t want to compete with that,” said Max Baumhefner at the Natural Resources Defense Council. “It’s not surprising that you would start to see this stuff manifest in forms like ALEC, but it’s also good to see there’s friction in the energy industry.”

Utilities see electric vehicles as a business opportunity. EEI has told its members to prepare for 7 million plug-in electric vehicles in the United States by 2025.

“The Edison Electric Institute strongly opposed this resolution, and we are extremely disappointed in these efforts to limit our ability to serve our customers,” said Brian Reil, a spokesman for the group. “As states and local communities seek ways to improve public transportation systems and to reduce greenhouse gas emissions, electric transportation offers a cost-effective pathway that benefits our customers, the environment and the energy grid.”

‘We’re going to make the case’

Tom Pyle of the Institute for Energy Research, who was behind the draft resolution, said he is planning to do more outreach following the private-sector backlash last week.

“It’s new territory, new players, and we got a bit more work to do in making sure we explain what we want to accomplish,” said Pyle. “We’re going to make the case that there’s a difference in providing taxpayer dollars to prop up an industry, and ALEC’s about the free market.”

“We’re building infrastructure on the dime of ratepayers across the board, when only a very few people are going to tangibly benefit from it,” he added.

Pyle said he first pushed for the language of the resolution at an ALEC meeting in 2015. There, it passed one initial task force before being retracted by its sponsor before the board had a chance to vote on it.

This time, the resolution made it through the energy task force. There, it was expanded to target all incentives and mandates regarding vehicles. Then it was voted down in the commerce task force.

Pyle said he could bring the resolution back up at ALEC’s annual meeting in New Orleans, possibly in a revised form.

Since 2015, utilities have gotten more engaged in building out infrastructure for electric vehicles. Those in California are leading the way, seeking approval for a $1 billion investment in residential and high-speed electric vehicle charging infrastructure. But many utilities in red states are following suit.

Last week, the Public Utilities Commission of Ohio approved an American Electric Co. Inc. plan to invest $10 million over the next four years in nearly 400 electric vehicle charging stations.

Some states, like California and Utah, have passed legislation to explicitly allow utilities to get in on the electric vehicle charging business. Others have unclear requirements. A Republican lawmaker introduced a bill to allow electric utilities to build charging infrastructure in Missouri this year. Electric utilities are behind similar bills in New Jersey and Pennsylvania.

That comes on top of perks offered by dozens of states for electric vehicles, including rebates, tax credits, carpool lane access or subsidies to build home charging stations.

That spreads out the battle over low-carbon technology incentives throughout state legislatures, rather than just the federal government.

Sometimes, it’s the oil industry that wins.

In Colorado, a coalition of utilities and environmental groups backed a bill this year that would have allowed utilities to use ratepayer money to build electric vehicle charging stations. The bill was aimed at overturning a precedent. The Colorado bill was opposed by the Independence Institute, a free-market group that receives some funding from the Koch brothers. It was voted down in a committee.