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Why Utilities Need A Seat At The EV Table

Chevy Volt
Megan McGowan
Electric vehicles represent a small but fast-growing segment of the U.S. auto market.

An Illinois Commerce Commission member says regulators are ready and willing to work with utilities to smooth out the road toward vehicle electrification.

Much of the dialogue around EVs is on who’s making them—like Rivian—and who’s buying them. Less attention is paid to the regulators and utilities who will make important decisions about how those vehicles get the electricity they need to actually run.

Maria Bocanegra
Credit ICC
Commissioner Maria Bocanegra

“There needs to simply be a level-set understanding that the transition to electrification—it simply cannot occur without our utilities,” said Commissioner Maria Bocanegra, who also serves as chair of the National Association of Regulatory Utility Commissioners’ EV Working Group.

The ICC is already studying one of the key EV issues related to utilities: rate design.

Rate design, in a nutshell, governs what people pay for the electricity they use. In the future, a well-constructed rate design scheme could, for example, successfully incentive EV owners to charge at certain times of day, when the grid is best-suited to deliver that electricity.

“There are a lot of benefits that can be derived. If it’s designed smartly, with the utilities’ help of course, it does have the power to reduce the rates we all pay,” Bocanegra said on WGLT's Sound Ideas. “That’s done by bringing more folks (on the grid) who are paying for that electricity and charging. If it’s done smartly, it actually has the ability to reduce peak loads by incentivizing folks to charge during off-peak periods.”

The ICC has been collecting rate-design information from stakeholders since last year, studying the impact on adoption and deployment of the infrastructure needed to support electrification. A report on its findings is expected later this year.

Charging station ownership

One of the more controversial questions that regulators will face is whether utility companies, like Ameren or ComEd, will be able to own and operate their own charging stations. Some argue that monopoly utilities with a guaranteed rate of return do not belong in a private market, and that without their involvement, a robust private sector charging industry could flourish.

In their favor, utilities have access to low-cost capital and have existing installation and maintenance expertise.

Utilities are already clamoring to enter this space. Ameren Illinois and five other energy companies recently announced plans to build out a “vast network of Midwest EV charging stations.”

“The commission has not tackled that question yet. But it is going to be inevitable,” Bocanegra said.

Some regulators in other states are starting to require that utilities looking to build out charging infrastructure spend some of that money in low- and moderate-income neighborhoods. That could also happen in Illinois, where there is a precedent. Illinois Solar For All successfully incentivized solar energy investment in economically diverse neighborhoods, Bocanegra said.

“In the context of Illinois, this idea is not so new,” she said.

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Ryan Denham is the content director for WGLT and WCBU.