Senator David Woodsome, Chair
Representative Mark Dion, Chair
Joint Standing Committee on Energy, Utilities & Technology
My name is Dylan Voorhees and I am the Clean Energy Director for the Natural Resources Council of Maine (NRCM). Thank you for allowing us to present this testimony. NRCM strongly supports efforts to expand the use of electric vehicles (EVs) in Maine in order to increase energy independence, reduce the economic costs of petroleum consumption, and lower pollution levels to achieve our clean air and climate goals. Expanding the availability of EV charging stations is a very important step in the transition to greater EV penetration.
Background: EV technology & benefits
EV technology has changed rapidly over the last several years and continues to expand in surprising ways. As a matter of definition, “electric vehicle” refers to a vehicle than makes use of electricity that comes from plugging the vehicle in, including both all-electric and plug-in hybrid gasoline-electric vehicles.[1] Attached to this testimony is a list of some of the EVs available for purchase today. You have probably heard of the Nissan LEAF, which is an all-electric car with a 105-mile range. But you may not know Ford sells an all-electric Focus with a 115-mile range. After federal tax credits, both have manufacturer’s suggested retail prices between $20,000 – $25,000. Chevrolet has just released its all-electric Bolt, with a 240-mile range that will sell for less than $30,000 after tax credit.
EVs offer very significant benefits because they can substantially reduce the use of gasoline. That is good for consumers, for our larger economy, and for our environment. For consumers, EVs are significantly cheaper per mile to drive than gasoline vehicles. Here in Maine, it generally costs about 35% less per mile to “fuel” and EV compared to a gasoline vehicle, the equivalent of buying gasoline at $1.45/gallon. However reduced maintenance costs are also substantial, especially when you lose the combustion engine altogether—consider no more oil changes or repairs and replacements of fuel pumps, timing belts, spark plugs or exhaust pipes!
Spending less money on gasoline means keeping more of our hard earned money at home in the Maine economy. Transportation accounts for 2/3 of Maine’s consumption of petroleum, so the economic opportunity from reducing that is significant. That would be true even if most of electricity was imported (like our oil) because driving EVs simply means spending less for fuel. But, as you know, Maine produces large portions of our electricity locally, and that should increase as we transition more toward renewables. Therefore EVs, like other forms of electrification of traditional oil uses, are an opportunity to transition broadly from imported energy to local energy. This is an opportunity that did not exist a decade ago.
For some of the same reasons, EVs are also incredibly important for reducing air pollution and achieving our climate goals. In fact, we likely cannot achieve Maine’s medium and long-term carbon reduction goals (e.g. 40% by 2030 and 80% by 2050) without including significant vehicle electrification. For example, a study by Synapse Energy Economics about meeting the 40% goal across the Northeast found that EVs would likely be the largest and cheapest source of emission reductions (actually saving money per ton of carbon reduced.)[2]
Importance of public charging stations
In late 2014, NRCM sent a survey to every registered EV vehicle owner in Maine and received responses from a large portion. A summary of results is attached to this testimony. These EV owners could be called “early adopters”. Two thirds of them were motivated to go electric primarily by saving money on gasoline, but other values informed their vehicle choice, such as reducing pollution or dependence on foreign oil and interest in new technology.
These drivers overwhelmingly charge their vehicles at home, mostly at night. This makes sense for them and it will make sense for “mainstream” EV adopters, too. Most daily driving can be accomplished on one charge and it is extremely convenient to simply plug in when you get home and unplug when you leave the next day. (Even 75% of drivers with a one-way commute over 21 miles charged mostly overnight; imagine leaving the house each day with a full “tank of gas.”) Two and a half years ago, most Maine EV drivers had never used a public charging station. That’s not too surprising, because are somewhat uncommon today and were fewer then.
These drivers bought their vehicles knowing they would need to make use of them without many public charging stations, so it is a biased sample. Indeed, there is good evidence to suggest that limited availability of charging will slow the adoption by the next phase of would-be EV buyers. That’s not because of actual driving habits as much as perceptions about driving and anxiety about running out of “fuel”. Half of early Maine EV drivers reported “range anxiety” before they bought their vehicles, which dropped significantly after they had been driving for a while (although more than one quarter still experience this concern.)
Publically available charging stations help change perceptions about ease of charging, and also help normalize this important new technology. Charging stations which are particularly visible help even more. Charging stations are also important for other markets, too, including commuters to large employers, municipal and public sector uses, and tourism.
Every year, Maine sees a large influx of visitors that drive into Maine from the north and south. Both Quebec and southern New England have aggressive plans to accelerate EVs, and Maine inns, restaurants, and attractions will benefit from being able to play host to these EV-driving tourists. Governor LePage has recognized this opportunity and has begun to partner with Quebec for an EV corridor that includes capital-intensive fast-charging infrastructure. This bill would be an excellent complement to that effort, by accelerating deployment of more inexpensive charging stations throughout the state for tourism and other destinations, as well as the people of Maine.
Suggestions for EV charging station grants
The large settlement fund that Maine is eligible to receive from Volkswagen presents an important opportunity for Maine to advance in the area of electric vehicles. If Maine allocated $500,000 of the more than $20 million in state-designated funds for the grants proposed in this bill, it would leave substantial amounts for deployment of the Governor’s fast-charging EV corridor along the interstate and to Quebec, as well as other emission-reduction strategies, while substantially boosting charging stations across the state.
We recommend that this bill be structured to focus on “Level 2” chargers, which can be installed for a few thousand dollars each. These charging stations are appropriate for places where vehicles will be parked for several hours, such as a hotel, tourist destination or workplace. The VW settlement agreement provides some limits about grants for charging stations (e.g. grants should cover no more than 80% of the cost for publically-available charging stations) which can be incorporated by reference into the bill. There is a significant opportunity to leverage private funds (we would recommend more of a 50-50 cost share.) The additional grant requirements and priorities suggested in the concept draft are all constructive. The bill could be structured to include workplace charging station grants as well, which are not likely to meet the definition of publically-available, but which can play a major role in catalyzing adoption of EVs.
The bill does not designate an entity to administer charging-station grants, however we know that Efficiency Maine has been discussed, in part because each year they effectively administer thousands of incentives in the approximate range of $1,000 each. Efficiency Maine needs clear guidance about how to prioritize funds, which can include leveraging private investment. NRCM would support this designation, although we believe policymakers need to have a much larger conversation over the coming few years about vehicle electrification, including the role of Efficiency Maine and the utilities.
Broader policy considerations
Electric vehicles will play a substantial role in grid modernization efforts. That is because they will be a large source of electricity demand which can and should be managed for off-peak consumption, providing substantial ratepayer benefit by flattening load. For this reason, EVs are part of a larger group of “distributed energy resources”, like efficiency or solar, that offer considerable benefits but need to be managed with new regulations, policies, markets and utility roles. In fact, because each EV comes with a battery that can flow electricity in both directions, they are even potentially a dispatchable source of electricity at peak times.
Finally, we know the issue of gasoline tax revenue has been raised with regard to vehicles that use less or no gasoline. The reduced consumption of gasoline has enormous consumer and economic benefits and cannot become a reason to resist the movement toward much more fuel-efficient vehicles. At the same time, it is true that Maine, like nearly every other state, will need to explore alternative approaches for ensuring Maine has enough revenue to meet its transportation funding needs. That is not the task for this committee for today, but we wanted to acknowledge that task lies ahead.
We look forward to providing any additional information or recommendations as the committee works this bill.
Thank you.
[1] The industry terms for these two types, Battery Electric Vehicle (BEV) and Plug-in Hybrid Electric Vehicle (PHEV), are somewhat confusing because both types have batteries and both are plugged-in! However both types of EVs are distinguished from the ordinary “hybrid” cars we have become familiar with, which contain a battery that is charged internally to increase fuel economy but whose only source of energy is gasoline.
[2] Stanton, Elizabeth et al. “The RGGI Opportunity 2.0: RGGI as the Electric Sector Compliance Tool to Achieve 2030 State Climate Targets.” Synapse Energy Economics. March 2016.
