California’s Misguided Electric Vehicle Policies

Some California elected officials have long been pushing electric vehicle (EV) usage as a “silver bullet” solution to addressing climate change. Which is why Governor Gavin Newsom’s latest executive order, that bans the production of new gas and diesel cars by 2035, came as a little surprise to most. While this may be a noble goal, there are obvious hurdles that the state will have to overcome in order to meet it, mainly expanding the availability of EV charging stations.

Unfortunately, the current approach that California is taking to expand the construction of EV chargers is ineffective, and negatively impacts working-class Californians.

In August, the California Public Utility Commission approved the largest utility program ever to construct additional EV charging stations. The commission approved $437 million to go to the Southern California Edison utility company to build “thousands” of chargers, and that is in addition to hundreds of millions of dollars that have already been approved for the utilities in previous years.

But, there are multiple problems with using the “utility model” to construct EV chargers.

First, it allows big utility companies to increase the monthly bills on their current ratepayers in order to fund the chargers. And while Governor Newsom might envision a future with solely EVs on the road, as it stands today, only five percent of cars in California are EVs. This means that 95 percent of Californians would get absolutely no use out of the EV chargers, despite having to pay more each month on their electricity bill.

And given that EVs are more expensive to buy compared to gas-powered vehicles, lower-income Golden State residents are even less likely to drive EVs, so they would be disproportionately negatively affected by the unexpected increase in their monthly utility bill.

In addition, allowing large utility companies to corner the market on constructing EV chargers will disincentivize private sector investment. It is clear to anyone on the road that the private sector effectively fuels our nation.

And these private companies stand ready and willing to compete in the growing EV charging market. For example, ChargePoint, which is one of the first and largest electric vehicle recharging networks, even recently announced that they would be going public. But these companies have to fund the construction of chargers out of their own pocket, and cannot compete with large utility companies that are able to use their current electric customers to fund this cost – even though these chargers will likely bring in money for the utility company in the long term.

The “utility model” unfairly chases small business owners out of this marketplace. And without private sector investment, less EV charging stations will be built.

If California’s elected officials are serious about transitioning to EVs by 2035, more EV chargers will be needed. The best way and most consumer-friendly way to get more EV chargers is to work with the private market to get more private capital invested in charging. But, to do that, the state should stop approving utility companies that want to increase the bills of their customers to cover the cost of EV charging.

Source : realclearenergy