State Transportation Issues

On July 8, 2017, The Pennsylvania Bulletin published a notice that the Pennsylvania Public Utility Commission (“PUC” or “Commission”) is seeking comments from stakeholders regarding electric distribution companies’ (“EDCs”) tariff provisions concerning the resale/redistribution of electric power to third parties.  Specifically, the PUC seeks comments regarding how those provisions would impact the operation and viability of electric vehicle (“EV”) charging stations.

Background on EVs in Pennsylvania

Over the past couple of years, the Commonwealth has witnessed an uptick in the number of registered EVs (rising from 1,653 vehicles in 2013 to around 3,600 EVs in 2016).  Although EVs continue to become more pervasive across the State, only 623 EV charging stations remain available to the public for recharging EV batteries.  As a result, the PUC believes all parties should take steps to foster increased investment in EV charging infrastructure across the State.  Accordingly, the PUC seeks comments from affected parties, particularly EDCs, on tariff provisions that account for EV charging stations.

Current Regulatory Framework Impacting EV Infrastructure

EV charging station owners purchase electricity from EDCs and resell that power to EV drivers with the goal of earning a profit from that sale.  The PUC believes that the current regulatory framework may restrict the ability of EV charging stations to earn a profit, which in turn would serve as a barrier to entry to this market.  Specifically, the PUC is concerned with Section 1313 of the Public Utility Code, 66 Pa. C.S. § 1313 (relating to price upon resale of public utility services), and EDCs’ tariff restrictions on resale/redistribution of purchased power.

Section 1313 indicates that an entity cannot resell power “to any residential customer” in an amount that exceeds what the EDC would bill its own residential customers for the same quantity of service under the EDC’s existing tariff.  On its face, this provision wouldn’t appear to impact an EV charging station owner because it resells power to an EV driver, not a residential customer. However, when viewed in connection with resale/redistribution provisions of EDCs’ tariffs, the PUC avers that Section 1313 may actually serve as a barrier to entry in this market by restricting EV charging stations’ ability to profit from sales of electricity to EV drivers.  EDCs’ tariffs vary widely and not all those tariffs address resales of power by a third-party EV charging station operators to EV drivers.  Further, some tariffs broadly permit the resale of power as long as it is compliant with 66 Pa. C.S. § 1313.

PUC Request for Stakeholder Comment on Potential EV Tariff Provisions

Because EVs continue to become more pervasive in Pennsylvania, the PUC believes all parties should take steps to foster increased investment in EV charging infrastructure.  As a result, the PUC seeks comments from affected parties, particularly EDCs, on the following topics:

  • What restrictions, if any, each EDC’s existing tariff places on the resale/redistribution of electric power by third-party EV charging.
  • The advantages and disadvantages of specific tariff provisions permitting unrestricted resale/redistribution of electric power when done for the purpose of third-party EV charging.
  • Whether it is appropriate to encourage EDCs across the state to move toward a tariff design which includes provisions permitting the resale/redistribution of electric power for third-party EV charging.
  • What other resale/redistribution tariff provision designs may aid in establishing clear rules for third-party EV charging stations.
  • What other regulatory options may aid in establishing clear resale/redistribution rules for third-party EV charging stations.

Comments on this issue are due to the Commission on August 22, 2017.  If you have any questions on this matter, please do not hesitate to contact any member of McNees’s Energy & Environmental Group or McNees’s Transportation, Distribution, and Logistics Group.