The Florida Public Service Commission approved a Florida Power & Light proposal that intends to bolster private sector deployment of electric vehicle fast chargers.Dory Larsen and Stan Cross | December 2, 2020
Consumers’ perceptions that there are not enough charging stations deployed to serve their mobility needs is widely cited as one of the top barriers to electric vehicle (EV) adoption. This is particularly the case with fast charging stations that support intercity and interstate travel. Fast chargers, often referred to as ‘direct current fast chargers’ or DCFC, rapidly charge EVs to support long-distance travel. DCFCs are costly to purchase and install, and because DCFCs consume large amounts of power in short periods of time, they trigger demand charges. These demand charges undermine charging infrastructure companies’ and station owners’ ability to recoup sunk costs and generate profits and, therefore, are barriers to private sector DCFC deployment.
Demand charge rate structures were not designed with EV charging in mind. Florida Power & Light’s (FPL) five-year pilot program seeks to address the demand charge barrier by implementing a demand charge limiter that limits the impact demand charges can have on charging infrastructure companies’ and station owners’ bottom lines. The pilot will address two questions:
- What is the appropriate rate to mitigate demand charge impacts on charging station business models?
- What is a fair, fast charging rate for consumers, charging infrastructure companies, utilities, and ratepayers?
SACE supported FPL’s Pilot filing as “a reasonable and necessary means to accelerate transportation electrification and deliver related values and benefits to ratepayers.” Additionally, SACE recommended considering the addition of an Evaluation, Verification, and Measurement (EM&V) process to maximize values and benefits further. EM&V is essential to ensuring Pilot learnings are captured and that ratepayer investments maximize long-term value and benefits for all. Sharing EM&V findings with regulators and industry stakeholders through a formal and transparent process further supports effective industry-wide growth and development.
The final result was that the program was approved in a unanimous vote, with annual reporting requirements included. A video of the Public Service Commission (PSC) conference and decision can be viewed here.
FPL’s demand charge limiter is the first-of-its-kind rate design to address this market barrier in the Southeast. Testing the commonly accepted theory that minimizing demand charge impacts on fast-charging stations will result in increased deployment of fast charging by the private sector is essential. If successful in spurring private sector investment, this Pilot will benefit EV drivers in FPL territories by ensuring adequate charging station deployment and will benefit ratepayers by leveraging private-sector charging station investment to grow the EV market and support downward pressure on rates.
SACE will continue to engage in the regulated utility process as utilities increasingly propose electric transportation programs for consideration by utility commissions across the Southeast. To learn more about other potential Florida utilities’ actions to advance electric transportation, read our blog: Transportation Electrification in Florida: Leveraging Utility Engagement (Part 2). To stay current with our work, please consider joining our Electrify the South network.