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Power & Pipes

FERC, CFTC, and State Energy Law Developments

US President Joseph Biden signed an executive order on August 5 that underscores his stated commitment to encourage the development and deployment of electric vehicles (EVs) as part of the Biden-Harris administration’s clean energy agenda. The executive order, Strengthening American Leadership in Clean Cars and Trucks, aims to increase the production of zero-emission vehicles by 2030 and directs new pollution and fuel economy standards for light‑, medium-, and heavy-duty vehicles for model years 2027 and later. President Biden’s issuance of the executive order, combined with the EV-related implications of various provisions in the draft infrastructure bill currently pending in Congress, may well serve to facilitate increased deployment of EVs in US markets.

As discussed earlier this year, EV penetration in US markets has increased year over year for several years now, but some threshold issues must be resolved to facilitate widespread adoption—namely, issues concerning the ownership, jurisdictional status, and rate impacts on network charging stations, and the impact of the electrification of transportation on the electric grid. Both the infrastructure bill and President Biden’s executive order address some of these threshold considerations.

Strengthening American Leadership in Clean Cars and Trucks Executive Order

The executive order sets a nonbinding goal that 50% of all new passenger cars and light trucks sold in the United States be zero-emission vehicles by 2030. The order includes a noninclusive list of zero-emission options, such as battery electric, plug-in hybrid electric, or fuel cell vehicles. In the last three years, around 2% of new car sales would have qualified as zero emission, with more than 40% of those sales coming from California.

To meet this goal, the order provides generally that the Biden-Harris administration will prioritize clear standards, infrastructure development, and innovation. Specific proposals include installing a national network of EV charging stations and creating point-of-sale incentives for consumers. Major domestic auto manufacturers have previously indicated their intent to have 40–50% of total new vehicles sales be for EVs by 2030.

The order also directs the Environmental Protection Agency (EPA) to establish new multipollutant emission standards, to include greenhouse gas emissions, for light- and medium-duty vehicles for model years 2027 through at least 2030. The order sets the EPA’s goal for its final rulemakings as December 2022. For heavy-duty engines and vehicles, the EPA will also establish new nitrogen oxide standards for model years 2027 through at least 2030; must consider updating existing greenhouse gas standards for model years 2027 through at least 2029; and must establish a new greenhouse gas standard for model year 2030. The order sets the EPA’s goal for these other final rulemakings as July 2024.

Further, the order directs the US Department of Transportation to establish new fuel economy standards for passenger cars and light-duty trucks for model years 2027 through at least 2030 and for heavy-duty pickup trucks and vans for model years 2028 through at least 2030. The order sets the goal for these final rulemakings as July 2024.

The order also suggests adopting the emissions standards recently imposed in California, noting California’s “significant expertise and historical leadership” on the issue.

Though imposing stricter standards on conventional internal combustion vehicles does not directly relate to EVs, stricter standards will make EVs more economically competitive.

Infrastructure Bill

The $1 trillion infrastructure bill, as it currently stands, includes several incentives for EV deployment. The bill currently contains $7.5 billion for additional EV charging stations, $73 billion to expand electric transmission to facilitate greater incorporation of renewable energy sources, and $7.5 billion for zero- and low-emission buses and ferries. President Biden’s call for EV purchase tax credits has not been included, but may be addressed in a separate bill.