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Power & Pipes

FERC, CFTC, and State Energy Law Developments

The New Jersey Board of Public Utilities (BPU) has issued a straw proposal for electric vehicle (EV) infrastructure build out, to advance the statutory targets for the installation of EV chargers under a law signed earlier this year.

Gov. Phil Murphy signed S. 2252 into law in January 2020 to advance EV growth in the state by offering incentives for EV purchases and setting goals for the development of EV chargers throughout the state.[1]

The BPU’s proposal, issued on May 18, was developed after reviewing best practices from across the country, including California and New York, and addresses the following key policy issues associated with EV charging.

Ownership and Operation of “Backbone” Infrastructure. Electric distribution companies (EDCs) would have responsibility for, and earn a return on, wiring and backbone infrastructure to enable “Charger Ready” locations. The BPU noted that EDCs have deep experience in operating distribution infrastructure, and commented that, “[i]n many ways, making a particular location Charger Ready looks like an extension of the distribution system and mimics the [EDC]’s ownership of meters on customer-owned lands.”

Ownership and Operation of Electric Vehicle Service Equipment (EVSE). Nonutility entities would have primary responsibility for ownership and operation of EVSE using private capital. The BPU noted that EVSE has a relatively high risk of obsolescence in light of the rapid pace of technology change in areas such as networking hardware and payment systems. By relying primarily on the market for EVSE installation, ratepayers would be shielded from some risk of stranded EV infrastructure costs. In order to use EDC-funded Charger Ready locations, EVSE entities would have to meet certain performance requirements, such as installing EVSE within a specific time period, making the site available to the public on both a subscription and per-use basis, and keeping the site operational for a specified time period.

Equitable Access to EV Charging. The BPU acknowledged the socioeconomic and demographic challenges associated with providing equitable access to EV charging throughout the state. “Equity Areas” (e.g., low-income, environmental justice, or rural communities) would be identified as suitable for Charger Ready locations as part of mapping efforts. The BPU noted that in areas where investment in EVSE by private entities is not occurring, EDCs might act as a “party of last resort” to develop and own charging infrastructure “to ensure that EV infrastructure is available and accessible across demographic and socio-economic pockets of New Jersey.”

Rate Designs for EV Charging. The proposal also identified three areas for rate reform to encourage EV adoption. First, EDCs would take actions to ensure that chargers serving residential customers in multi-family dwellings are charged a rate consistent with the residential rates applicable to single family homes. Second, EDCs would either waive demand charges applicable to publicly available chargers or develop a rebate methodology to ensure the effective rate remains below a specified level agreed upon by EDCs and interested stakeholders. Finally, EDCs would offer a voluntary time-of-use rate for EV charging to incentivize off-peak charging.

The BPU conducted an online technical conference to discuss the straw proposal on June 3, 2020, and is accepting written comments on or before June 17, 2020. EDCs must file their EV plans and proposed EV programs by December 31, 2020 with implementation dates commencing no later than April 1, 2021.

[1] Read our prior blog post for more information on S. 2252.