The Infrastructure Bill Is Merely A Start

The bipartisan infrastructure bill passed by Congress in November is a big deal for electric transportation.  Known as the Infrastructure Investment and Jobs Act (IIJA), it provides appropriations of $7.5 billion over five years for the electric vehicles (EV) infrastructure across a variety of vehicle types.  The EV sections are part of a $1 trillion package funding numerous critical infrastructure needs, from electricity grids to highways, water systems to broadband networks. President Biden provided the agenda and overall leadership, while Congress responded on a bipartisan basis to pass this landmark bill. 

Attention now turns to the complexities of implementing the bill at the State and local government level.  As they say, the devil is in the details.  Suffice it to say that we at ATE are working hard to participate in the information gathering required by the new Joint Office of Energy and Transportation (DriveElectric.gov) between the U.S. Departments of Energy and Transportation.  The Office issued guidance for both the formula funding and competitive grants programs, which is also linked to the nomination process done by FHWA for Alternative Fuels Corridors.  I believe that collaboration among many parties—state, federal, public and private—will be key to getting the work done.

While $7.5 billion is a big boost for funding EV infrastructure, it leads some state and industry officials to hint that this can resolve all the EV infrastructure challenges and gaps in the states, or that it may allow regulated utilities to decrease their infrastructure support.  Some in the public sector argue that any remaining gaps can be filled by funding from private-sector OEMs, EV service providers or Wall Street investors, while others in the private sector think it’s up to state and local governments to plug any holes.

Yet nothing could be further from the truth.  While federal funding is critical leverage, it should be viewed as a mere down-payment towards our overall national and state EV infrastructure needs.  Even the leading EV state of California forecasts still a significant shortfall, or infrastructure gap, of its needs to 2030, after totaling all funding from federal, state, city, local government, and utility sources.  This is true for other leading states in EV adoption, such as Colorado, Oregon, Washington, Maryland, Massachusetts, and Illinois.  Some other states are just beginning their EV transformations, and they are further behind. 

Moreover, several key national studies on the infrastructure investment needed to support much higher EV adoption goals support this thesis.   The International Council of Clean Transportation (ICCT) did a revised national study last summer of the charging stations needed by 2030 to meet much higher EV goals, and concluded that about $28 billion was necessary just for publicly available chargers (excluding the other use cases of residential, workplace, and multi-family).  Meanwhile, Atlas Public Policy carried out two studies last year that clearly demonstrated a large infrastructure gap, including a light-duty vehicle gap of about $39 billion to 2035.  In addition, it forecast a much higher capital investment number for the rapidly emerging, but nascent, markets for medium and heavy duty (MHD) vehicles at about $89 billion.  Hence, the best forecasts today indicate that significantly more investments from all sources will be needed to achieve this market transformation.

Therefore, I believe we need to augment the new federal funds with more capital to accelerate construction of these critical long-term assets.  Without adequate and robust infrastructure that can operate among multiple networks and automakers, we will simply fail in our mission to electrify the transportation sector. Neither consumers nor fleets will buy electric vehicles without quick, reliable, widespread charging available. This is not just range anxiety, but anxiety over charging access and shortening the dwelling time to charge a vehicle.

A strong utility role overseen by state utility commissions is important for several reasons:

• Only utilities have the size and scale to execute economy-wide, grid-integrated, reliable, affordable EV charging systems.  
• Only utilities are obligated to serve all customers, including lower income folk, underserved neighborhoods, remote rural areas, and difficult use cases like apartment buildings and condominiums.
• Utilities have the unique ability to promote a number of vehicle-to-grid-integration (VGI) solutions, including time-of-use rates, managed charging with advanced technology, and load shifting to off-peak times including V2G solutions.

Done properly, these utility strategies will optimize grid utilization, benefitting everyone, and offering real potential to lower rates over time since a utility’s revenues will rise apace with EV loads, creating “headroom” for the utility to spread or return those revenues back to customers, or to target special needs and underserved areas that need more attention.

Right now, we need an all hands on deck effort.   We need regulated utilities to catalyze this important market transformation. We need EV service providers (EVSPs) to provide capital, expertise, and advanced technology, often in partnership with automakers. Automakers, in turn, should provide EVSPs and utilities with telematics and other data, as well as adding capital to infrastructure when necessary.   State and local governments can supply timely grants and incentives to spur infrastructure design and deployment.  

The coordination of these efforts is critical. We must ensure that the new federal dollars do not duplicate what has already been done in the states. We should encourage commissions, local governing bodies of utilities, consumer advocates and others to adopt consistent, long-range plans at the State and local government level that guide investments by both regulated utilities and the private sector.

This will not be always easy, and many challenges will arise. However, due to the pressing climate challenge and our need for an internationally competitive clean transportation sector, we have no other choice.  Let’s work hard to collaborate, plan, and get this urgent job done.