Massachusetts Utility Takes Novel Approach to Increased Electric Vehicle Infrastructure

By William M. Keyser, Molly Suda, Michael L. O’Neill

Offering a new approach on electric vehicles (EV) integration in the power grid, Massachusetts utility National Grid has proposed a “make ready” solution for EV charging stations in its service territory.  In essence, the utility proposes to prepare the infrastructure to support the development of EV charging stations but does not propose to own the charging infrastructure itself.  This approach may appease some of the opposition mounted in other states where utilities have sought to own both the infrastructure necessary to support EV charging stations and the charging stations themselves.  National Grid’s proposal is pending before the Massachusetts Department of Public Utilities (DPU).

If the DPU approves National Grid’s EV charging proposal, National Grid may take important steps in developing the infrastructure necessary to support Massachusetts’ planned expansion of the Commonwealth’s EV fleet.  And, if approved, this program allows the company to position itself as a leader in the race to integrate EVs into the electricity grid.

Background

As part of its goal of 300,000 zero-emission vehicles registered in the state by 2025, including EVs, Massachusetts has adopted a suite of complementary initiatives to develop its zero-emission fleet, such as:

• Massachusetts Offers Rebates for Electric Vehicles (MOR-EV), a program that provides rebates of up to $2,500 for the purchase or lease of EVs;
• Massachusetts Electric Vehicle Incentive Program: Workplace Charging (MassEVIP), a funding opportunity for workplaces that provide EV charging opportunities;
• Mass Drive Clean, a statewide initiative that offers test drives of zero-emission vehicles; and
• Section (f) of Chapter 448 of the Acts of 2016, allowing electric companies and distribution companies to recover the costs of constructing, owning, and operating publicly available EV charging infrastructure, including charging stations.

Despite these efforts, Massachusetts reports that fewer than 9,500 electric vehicles were on the state’s roads as of March 31, 2017.  To meet its goal of 300,000 zero-emissions vehicles in the state by 2025, Massachusetts will need to see dramatic increases of EV registrations in the coming years.  In its review of challenges facing the Massachusetts EV market, National Grid highlighted inadequate vehicle charging infrastructure, especially at workplaces or multi-unit dwellings, as a critical impediment to the growth of zero-emissions vehicle registrations in the state.

National Grid’s “Make Ready” Proposal

Initially offered in January 2017, National Grid proposes to address part of the challenge of inadequate EV charging infrastructure by installing the facilities necessary to supply adequate power to EV charging stations.  The company states that its goal is to expand deployment of EVs in the state by encouraging its business customers to install changing stations.  National Grid proposes to install the necessary equipment on the company side of the meter without requiring contributions from customers for those facilities, reimburse the customers’ costs for any upgrades necessary on the customers’ side of the meter to support an EV charging station, and provide a rebate, similar to the state’s MOR-EV rebate for EV purchases or leases, towards the cost of a qualifying Level 2 charging station.

In addition to the hardware installations outlined above, National Grid proposes additional measures to encourage EV adoption in Massachusetts:

• A marketing and education plan to promote the charging program to potential charging site hosts; and
• An evaluation plan and performance incentives.

National Grid also proposes to implement research and development programs to collect data to evaluate the impact of EV charging stations on its system and evaluate future integration of EVs and EV charging stations.  National Grid anticipates that information from the research and development component may allow it to develop demand response programs.  In addition, the research and development component of its proposal will evaluate demand response program designs that can be implemented with the EV charging stations and directly with the EV drivers.  National Grid has also proposed to require site hosts to install EV charging stations capable of responding to demand response signals so the stations will be capable of participating in future demand response programs.

National Grid estimates that the charging program will cost $19.7 million over the eight-year term of the program.  On a shorter schedule, the company hopes to encourage the deployment of 1,200 Level 2 EV charging stations and 80 direct current fast charging ports over the first three years of the program, although the company acknowledges that it expects to learn more about the EV charging station market in the coming years so it may adjust its deployment estimates.

On May 11, 2017, the DPU set the schedule for the rest of its review of National Grid’s proposal.  DPU will convene any necessary evidentiary hearings in September 2017 and briefing is scheduled to be complete by the end of October 2017.

Implications

In addition to the direct effect of encouraging EV adoption across Massachusetts, National Grid’s proposal lays the foundation for broad integration of EVs into the power system.  With an eye to the future and the changing power grid, National Grid’s proposal looks to identifying opportunities to integrate EVs into the grid and gather the data necessary to allow use of EV and EV infrastructure to assist in managing the gird of the future.  As retail and wholesale market rules continue to evolve to address the integration of new technologies, National Grid’s proposal may create opportunities for demand response and storage aggregators, EV charging station owners and other entities associated with EVs to become more active in the wholesale and retail energy markets.  K&L Gates attorneys will continue to monitor these activities and report on developments that may provide opportunities for interested parties in these areas.