In November 2023, the Pennsylvania Public Utility Commission (PUC) issued a proposed policy statement to encourage Pennsylvania’s electric distribution companies (EDCs) to develop distribution and default service rate structures for electric vehicle (EV) charging customers. Following a review of comments submitted by stakeholders, on December 19, 2024, the PUC adopted a Final Policy Statement Order, which addressed those comments and included a final policy statement (Policy Statement). The Policy Statement became effective on February 15, 2025 following publication in the Pennsylvania Bulletin.
Citing federal and state policy initiatives to promote the proliferation of EVs and the expected increased demand on existing infrastructure due to EV charging, the Policy Statement encourages EDCs to develop distribution and default service rate structures for EV charging customers.
The Policy Statement further provides EDCs with general guidelines if they choose to propose EV rates in their respective tariffs. Notably, the Policy Statement urges EDCs to promote “more efficient capacity utilization” as well as “fairness and equity” in designing EV charging rates.
Key areas of stakeholder interest addressed in the PUC’s Final Policy Statement Order include the below.
Fairness and Equity
The Policy Statement includes several references to fairness and equity and states that EV charging rates should reflect “cost-of-service principles” and not create “undue financial burdens” for low-income customers or disadvantaged communities.
Some commenters requested that references to fairness and equity be stricken or clarified in light of the existing statutory requirement that rates be “just and reasonable.” Other stakeholders recommended that the PUC define fairness and equity objectives, explain what constitutes an “unfair financial burden,” and provide a detailed framework for consideration of fairness and equity.
The PUC declined to remove or further clarify those provisions, stating the Policy Statement is intended to provide guidance and not detailed requirements. The PUC did, however, incorporate a provision about exploring the use of telematic submetering in response to stakeholder comments that submetering could reduce upfront costs and improve access to EV-only charging rates.
Demand Charges
The Policy Statement recommends that EDCs consider whether demand charges are appropriate for rates applicable to direct current fast chargers (DCFCs). Several commenters highlighted concerns about demand charges as a barrier to the deployment of public DCFCs and urged the PUC to consider a demand charge waiver or reduction. The PUC rejected such proposals, agreeing with another commenter that it would be “inappropriate and contrary to ratemaking fundamentals” to prescribe a reduction or elimination of demand charges for EV charging stations in the Policy Statement.
Interaction with the Competitive Market
In the Final Policy Statement Order, the PUC explained that the Policy Statement does not preclude the development of a competitive market and suppliers in support of EV development. The PUC rejected a range of stakeholder proposals highlighting the competitive market, including proposals that the Policy Statement (1) acknowledge the role of the competitive market and (2) state that EDCs should not impede the development of the competitive market or foreclose the ability of competitive energy suppliers to offer products and services.
Flexibility
Throughout the Final Policy Statement Order, the PUC emphasized that the Policy Statement is intended to offer EDCs flexibility regarding how EV charging rates are designed and how and when an EDC advances EV charging proposals. The PUC accepted a recommendation to strike a reference to “time-of-use rates” as an example of a default service generation rate, noting the sentence was an unnecessary level of detail.
The PUC also rejected a number of stakeholder proposals that would have placed additional restrictions on EV charging rate development, including (1) a proposal to require coordinated development of distribution and default service EV charging rates; (2) a proposal that EV rates be long-duration in nature (e.g., 10 years); and (3) a proposal that the PUC direct, not just encourage, EDCs to file EV charging tariffs.
We expect the Policy Statement will inform EDC EV charging rate proposals in the future and the types of analysis presented with such proposals. Concepts such as “fairness and equity” remain open to interpretation and will likely be carefully examined by EDCs, interested parties, and the PUC in the context of individual EDC proceedings.