Government

Iowa State Board allows sale of electric vehicle energy by the kilowatt-hour

A marked parking spot for an electric vehicle next to a charger in the Convention Center Ramp in Cedar Rapids on Wednesday, Sept. 12, 2018. (The Gazette file photo)
A marked parking spot for an electric vehicle next to a charger in the Convention Center Ramp in Cedar Rapids on Wednesday, Sept. 12, 2018. (The Gazette file photo)
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Iowa utility regulators will allow retailers to sell energy for electric vehicle charging by the quantity — a move some advocates say marks a win for the state’s budding electric vehicle infrastructure.

Traditionally, energy for electric vehicle charging has been sold by an increment of time, but the Iowa Utilities Board earlier this month allowed for that energy to be sold by whatever format they wish, including kilowatt-hour.

Mark Schuling, Iowa’s consumer advocate, said charging stations can distribute energy at different speeds, meaning one hour at one station can provide a different amount of energy than an hour at the next station.

By allowing for the sale of energy by a quantity, consumers will better know what they’re purchasing, he said.

“It’s like a gallon of gas. You put 10 gallons of gas into your car, you know how far that’s going to get you,” Schuling said.

Last year, officials with the Iowa 80 Truckstop in Walcott requested the utilities board allow energy to be sold by the kilowatt-hour, which at the time was prohibited by state law.

Delia Meier, senior vice president of the Iowa 80 Truckstop, told The Gazette last year that the prohibition was holding up plans to install six fast-charging stations at the truck stop.

According to the law, only an operating utility was allowed to sell power by the kilowatt-hour.

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Most of Iowa’s electric vehicle charging takes place at the vehicle owners’ homes. External charging stations traditionally sell energy by an increment of time or provide power free with the cost of parking.

However, the Iowa Utilities Board last August opened an investigation to determine if retailers also could sell power by the kilowatt-hour.

The final ruling prohibits a rate-regulated utility from restricting the method of sale of energy for electric vehicle charging. That energy still is subject to the utility’s tariff, which is filed with the state board, according to the ruling.

“We see this as a positive, because it opens the market up and could increase the number of electric vehicle charging stations that are out there,” Schuling said.

A 2016 report by the Iowa Economic Development Authority titled “Advancing Iowa’s Electric Vehicle Market” notes that allowing owners of charging stations to bill directly for electricity opens the door to increased investment in Iowa’s fast-charging infrastructure.

“By implementing a model that sells electricity on a watt-for-watt basis, there is more transparency and a perception of fairness that will allow consumers to see exactly what they are paying for when using these charging stations, similarly to how the average consumer pays a per-gallon price at the pump to fill their cars,” the report notes.

In other electric vehicle news, Iowa lawmakers last week approved increased costs for the state’s electric vehicle owners.

House File 767 is heading to Gov. Kim Reynolds’ desk for a final signature and includes:

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• An excise tax of 0.026 cents per kilowatt-hour. It would not apply to home charging, which accounts for 80 percent to 90 percent of passenger electric vehicle charging.

• A $130 annual registration fee for battery electric vehicles, a $65 annual fee for plug-in hybrid electric vehicles, and a $9 annual fee for electric motorcycles.

Officials with the Iowa Department of Transportation have said the fees will generate about $150 a year per vehicle — comparable to what the owner of a fuel-powered vehicle contributes annually to the state’s Road Use Tax Fund.

Officials say there are about 800 battery electric vehicles in Iowa and about 1,900 plug-in hybrid electric vehicles.

Based on a few scenarios, the state predicts electric vehicles will reduce in Road Use Tax Fund revenue between $488,000 and $564,000 in 2020. By 2030 the tax revenue could be reduced between $7 million and $45 million, and by 2040 electric vehicles are expected to reduce fuel tax revenue by close to $40 million or up to more than $241 million.

l Comments: (319) 398-8309; mitchell.schmidt@thegazette.com

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