March 4, 2022
By Bill Andrews and Tom Hackney
On January 26, 2022, the BCUC rejected BC Hydro’s application for permanent approval of rates for Hydro’s public DC fast charging service. The main points:
- The BCUC rejected BC Hydro’s application for permanent approval of rates for its public fast charging service. BC Hydro must reapply for permanent rates by December 31, 2022.
- However, the existing approved interim rates for BC Hydro’s fast charging service remain in effect until the BCUC eventually approves permanent rates.
- BC Hydro must create a separate “class of service” for its EV fast charging service, to ensure that EV drivers using the charging service will, over time, pay for the entire capital and operating costs of the service.
- In addition, EV drivers using BC Hydro’s fast charging service will have to pay, over time, more that BC Hydro’s cost of service. The BCUC’s objective is to boost BC Hydro’s rates for public fast charging service so as to push EV drivers toward unregulated fast charging providers who have very high capacity charging stations (up to 350 kW) that cost more to buy electricity for than BC Hydro’s 50 kW charging stations.
The final argument of BCSEA and the Vancouver Electric Vehicle Association is here. BCSEA is disappointed with the BCUC’s decision. It’s a bit of a long story…
Four years ago, in December 2017, FortisBC-electric applied to the BCUC for approval of rates for FBC’s recently-installed public fast charging stations. The BCUC paused FBC’s application while it conducted a year and a half-long inquiry into the regulation of EV charging services. The first phase of the inquiry addressed EV charging services by any provider except regulated public utilities such as BC Hydro and FBC. Happily, the first phase resulted in substantially removing BCUC regulation of EV charging services (except by BC Hydro and FBC).
The second phase of the inquiry addressed public fast charging service provided by BC Hydro and FBC. Adopting a traditional position, the inquiry said BC Hydro and FBC should not be involved in providing public EV charging service. The inquiry took the position that a competitive market always produces the best outcomes (despite the evidence that there aren’t yet enough EVs on the road in BC to support profitable public fast charging service). The Commission effectively said to the Government: if you want BC Hydro and FBC to provide public fast charging service to help kickstart the adoption of EVs in BC then the Government will have to issue a regulation to force the BCUC to allow it.
In June 2020, the Government did just that. After public consultation, the Government issued a regulation requiring the BCUC to allow BC Hydro and FBC to implement public fast charging stations, subject to limitations on the number of charging stations in the same urban area. The legal regime also requires the BCUC to set rates that allow BC Hydro and FBC to recover their costs of providing public fast charging service.
Unfortunately, the legislation doesn’t spell out which customers will pay for the public fast charging service. BCSEA and many others thought the costs would be covered by a combination of EV drivers using the charging stations and general utility customers. This would keep the rates for public fast charging low enough to attract users and kick-start EV uptake while general customers benefit from the growing EV charging load. The BCUC said no. In the January 2022 decision, the BCUC said that BC Hydro’s costs of public fast charging must be recovered entirely from EV charging customers, with no cross-subsidy from other ratepayers.
To BCSEA, this strict ‘no cross-subsidization’ approach is contrary to Government’s intention to foster EV uptake in the Province by having BC Hydro and FBC roll out public fast charging stations funded in part by their general customers. After all, no provider of public fast charging in BC at the moment can recover its full cost of service from ongoing revenue from EV drivers because utilization of the charging stations is too low due to the small number of EVs on the road due in part to the paucity of public fast charging stations.
As mentioned above, BC Hydro’s current rates for public fast charging remain in effect — 21 cents/minute for 50 kW chargers — until the permanent rates are approved. BC Hydro will file a new application by December 2022, and the saga will continue.