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Texas TDUs Urge PUC Not To Adopt Complete Prohibition On Utility EV Charging Station Ownership, Seek Flexibility

NRG Says Service At Public EV Charging Station Is A Retail Sale of Electricity, Providers Should Be Required To Register As REPs

August 31, 2020

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Copyright 2010-20
Reporting by Paul Ring •

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Various Texas TDUs said in comments to the Public Utility Commission of Texas that the Commission should not adopt a complete prohibition on utility ownership of electric vehicle charging stations, and urged flexibility for TDU ownership under certain circumstances

CenterPoint Energy Houston Electric said that, "Electric utilities may ... have a role in owning or operating electric vehicle charging stations, for example in those areas where competitive market forces do not meet the needs of consumers."

CenterPoint Energy Houston Electric noted that rules adopted following passage of Senate Bill 7 address the provision of competitive energy services by electric utilities. Those rules define competitive energy services, provide that any person other than an electric utility may provide competitive energy services, and establish an exception allowing an electric utility, "to provide on an unbundled-tariffed basis a competitive energy service that is not widely available to customers in an area."

"So if the Commission considers a charging station to be a competitive energy service, under current rules, an electric utility may petition the Commission for authority to own or operate electric vehicle charging stations in areas within its service territory where competitive energy services are absent. While this petition process may adequately address the role of electric utilities in providing charging stations, the competitive deployment of charging stations is still developing, and there may be a need for rules specific to electric charging stations in the future. For example, if competitive deployment does not result in sufficient charging station infrastructure in rural or economically depressed areas or in remote areas along hurricane evacuation routes, the Commission could adopt rules specifically addressing the role of electric utilities in the deployment of charging stations in those areas," CenterPoint Energy Houston Electric said

AEP Texas similarly said that, "The AEP Companies believe that while there has been substantial growth in the nascent electric vehicle supply equipment (EVSE) market, electric vehicle (EV) deployment is still in its infancy, thus the structure of the charging market is simply not well-defined yet. As such, the AEP Companies suggest it is in the best interest of policymakers to avoid precluding any particular model at this stage in EVSE development, including potential utility ownership and/or operation of public charging stations. Maintaining flexibility in any policy that is developed allows the market and industry the ability to evolve and meet customers' expectations. The AEP Companies believe this flexibility should be maintained in both service areas in the competitive electric market and in areas not open to retail competition."

Texas-New Mexico Power Company likewise said that, "Given the developing nature of the electric vehicle market, TNMP limits its response to competitive areas. While the number of electric vehicles in Texas is expected to grow, the pace of such growth is not known. In fact, electric vehicle usage may actually vary from one part of the State to another. Under such circumstances, the Commission may want to avoid limiting the type or types of entities that are permitted to own or operate an electric vehicle charging station ('EV charging station') until the market matures."

Oncor also noted that, if the PUC designated EV charging to be a competitive energy service, a TDU may petition the Commission to provide the service under specific circumstances, in the event competitive energy services do not adequately provide public charging stations, citing 16 TAC §25.343(d).

The Texas Advanced Energy Business Alliance, while noting the existing deployment of EV public chargers by competitive providers in Texas, still said that, "In sectors where it is difficult for these companies to make a business case for developing, owning, and operating EVSE (e.g., deployments in rural areas with lower population densities or historically economically disadvantaged communities), a more expansive role for utilities may be warranted until the business case improves. This approach allows for the state to ensure equitable access to charging infrastructure in areas that may be traditionally underserved and will prevent the stranding of traveling EV drivers in 'charging deserts.'"

In contrast, NRG Energy said that,"Any entity permitted by PURA to sell electricity to end use customers in ERCOT should be permitted to own and operate a public EV charging station in the ERCOT competitive market."

"PURA expressly prohibits electric utilities from providing retail electric service in ERCOT. The same prohibition should extend to the ownership or operation of EV charging stations by electric utilities," NRG said

• Is The Operation Of An Electric Vehicle Charging Station A Retail Sale Of Electricity?

NRG said that the operation of an electric vehicle charging station should be considered a retail sale of electricity.

"At a fundamental level, an owner or operator of an EV charging station owns or operates equipment or facilities that transmit or furnish electricity to end use customers (i.e., EV customers) in exchange for compensation of some form. Specifically, in the ERCOT competitive market currently, public EV charging stations operate either as a standalone retail electricity customer (e.g, brand-named charging stations) or as part of a retail electricity customer (e.g., convenience store, gas station, office building, restaurant) that then resells electricity to other customers (i.e., EV drivers). As part of the EV charging transaction, the EV customer is taking electricity in exchange for a form of compensation that may include a direct payment, an incentive for purchasing a particular manufacturer's EV, or for being a patron of a business or tenant. Regardless of the form of compensation, the EV customer is receiving electricity in exchange for something of value. While the PUCT has recognized 'that the term 'compensation' is generally understood to mean a payment for value or services rendered,' the Commission has previously interpreted compensation more broadly. This is appropriate and consistent with the concept that the substance of a transaction should generally control over its form for regulatory purposes. Therefore, the 'retail electric provider' definition in PURA is consistent with the services being provided and a minimum level of oversight by the Commission would ensure that customers in this emerging retail electricity space receive an adequate level of service. In addition, given that EV charging stations provide electricity to customers in exchange for compensation, the 'self-use' exceptions in PURA would not apply," NRG said

NRG further said, "PURA defines a 'retail electric provider' or 'REP' as a person who sells electric energy to retail customers in this state. A 'retail customer' means a separately metered end-use customer who purchases and ultimately consumes electricity. 'Separately metered' means 'metered by an individual meter that is used to measure electric energy consumption by a retail customer and for which the customer is directly billed by a utility, retail electric provider, electric cooperative, or municipally owned utility.' A standalone EV charging station is separately metered, directly billed, and it ultimately consumes electricity. An EV charging station that is located on the site of another business or commercial property is part of a retail customer that is separately metered, directly billed, and is ultimately consuming electricity. In both cases, the electricity is then being resold to EV customers. An EV charging station co-located with another business constitutes a retail sale of electricity since the combined site is a retail customer and meets the definition of separate metering."

NRG said that, "EV charging station owners or operators should not be able to avoid a retail sale by merely changing the method of measurement (e.g., selling minutes instead of separately metered units of electricity) or the type of compensation when the ultimate product remains the same (i.e., electricity)."

"NRG recommends that these [EV charging] transactions be considered as retail sales of electricity. Accordingly, by classifying owners and operators of EV charging stations as a type of REP, their customers will benefit from similar customer protection and certification rules required of other REPs (e.g., fair billing practices)," NRG said

"Accordingly, owners and operators of public EV charging stations should be required to register as retail electric providers in order to operate or continue operating in the Texas competitive electric market," NRG said

"To ensure the process and requirements to be licensed as a REP are not overly burdensome for EV charging station owners or operators, NRG recommends the Commission create a new Option 4 REP category. The Commission's existing rules allow for three different Options for REP certification, with differing levels of registration and reporting requirements. The Commission could create a new category in 16 TAC § 25.107(d) for an Option 4 REP with regulatory requirements that would be specific to EV charging companies. The Commission could then determine whether additional changes to its rules were needed. Amending and adopting such rules can be accomplished without impeding the current operation or continued installation of EV charging stations in ERCOT. Commission oversight has proven invaluable in the competitive retail market to deter bad actors and unintended behavior. If EV charging companies are left exempt from any regulatory oversight, opportunities for abuse or the existing ambiguity could potentially be exploited in a way that ultimately harms consumers, the competitive retail market, and the growth of EVs," NRG said

Notably, NRG also said that, "As a practical matter, it makes sense to ignore transactions involving de minimis amounts of electricity such as public phone charging kiosks." NRG contrasted this with the electric demand of EV charging stations, which NRG said can reach up to 350 kilowatts (kW) based on current technology and is likely to increase in the future.

In contrast, MP2 Energy Texas LLC and Shell Energy North America said, "Shell does not believe that operating an EV charging station should be considered the retail sale of electricity, regardless of whether that service is priced by the kWh or in any other manner."

"If charging is done by the minute, or other non-energy unit, it is generally understood not to be a retail sale of electricity. When selling charging services by kWh/energy delivered, the fact that the charging service involves the transmittal of electricity is a necessary but incidental component of the service. That service fundamentally is battery charging to provide mobility, range, or vehicle miles, but not electricity per se. EV charging stations deliver a service via specialized cords and connectors, specific to the act of charging. This is distinct from the act of electricity retailing, which provides a substitute for a service that a consumer would otherwise receive from another provider. Moreover, with standard supply electricity service, the customer can choose how to use the electricity, while in the case of EV charging, the service only permits the refueling of an EV," Shell said

CenterPoint Energy Houston Electric said that the operation of an electric vehicle charging station is not a retail sale of electricity

"The provision of a charging service to the public at electric vehicle charging stations is analogous to the provision of a charging service to the public at cell phone charging kiosks in airports, train stations, shopping mails and other public locations. The latter service is widespread but not considered or regulated as a retail sale of electricity. It would be incongruous to treat the former differently," CenterPoint Energy Houston Electric said

Oncor said that it does not believe that owning or operating an EV charging station should constitute the resale of electricity, and Oncor supports a Commission rule and/or a clarifying amendment to the Public Utility Regulatory Act (PURA) if needed to resolve any ambiguity on this point.

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