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Infrastructure Bill Boosts Alternative Fuels

New grant program raises EV charging ‘double-dipping’ concerns from retail groups
Photograph: Shutterstock

WASHINGTON —A bipartisan infrastructure bill would not only authorize billions for road and bridge improvements but also provide billions of dollars for alternative fueling infrastructure—including electric-vehicle (EV) charging stations. It’s the latter that some fuel retail groups are concerned about: They say utilities could engage in “double dipping” of EV charging infrastructure incentives and gain an unfair advantage over fuel retailers.

America’s Transportation Infrastructure Act of 2019 would authorize $287 billion from the Highway Trust Fund over five years to be invested in maintaining and improving roads and bridges. More than 90% of this amount would be distributed to the states. This five-year funding level marks a more than 27% increase above the FAST Act—the infrastructure funding bill that President Obama signed into law in 2015—and is the largest highway bill in history, according to its sponsors. They include Sens. Tom Carper (D-Del.); Ben Cardin (D-Md.); Shelley Moore Capito (R-W.Va.); and John Barrasso (R-Wyo.), chairman of the Committee on Environment and Public Works (EPW), where the bill is being marked up.

The bill includes $3 billion over five years in new funding for state projects that would lower highway-related carbon emissions. States can compete for an additional $500 million over five years of funding if they improve per capita carbon emission reductions. Also, to prepare for the growth in alternative-fuel vehicles, the bill establishes the Promoting Resilient Operations for Transformative, Efficient and Cost-saving Transportation (PROTECT) grant program. The $1 billion, five-year competitive grant program offers states and local communities funds to build EV charging and hydrogen and natural gas fueling infrastructure along designated highway corridors.

The fact that the bill is bipartisan and appears to have the support of the president makes the likelihood of its passing greater. After the bill was announced, President Donald Trump tweeted, “Senate is working hard on America’s Transportation Infrastructure Act. Will have BIG IMPACT on our highways and roads all across our Nation.”

Double-Dipping Concerns

It’s the new grant program for alternative fueling that NACS and SIGMA are concerned about—specifically, the potential for electric utilities to engage in “double dipping” on subsidies, which could blunt the development of EV charging in the private sector. 

The groups argue that the grant program “might be read to allow electric utilities to bill all their customers more money to pay for electric-vehicle charging infrastructure while also taking taxpayer money to subsidize the same projects,” NACS and SIGMA said in a statement.

“This double dipping by electric utilities would make it extremely unlikely that the private sector would invest in charging infrastructure, given the unfair playing field it would create,” said Paige Anderson, director of government relations for NACS. “The private sector is investing in electric charging infrastructure and wants to do more of that, but if double dipping by utilities were allowed, private sector investment would dry up.”

NACS and SIGMA argue that convenience stores are the most logical choice for EV charging stations because of their footprint: more than 153,000 in United States, including about 122,000 that sell fuel, or seven times the number of charging outlets.

“We’re pleased the alternative-fuel grants look to spur private-sector investment, but we want to be sure that it doesn’t allow abuses by electric utilities,” said Doug Kantor, parnter of Steptoe & Johnson LLP and counsel to NACS and SIGMA. “If utilities can charge all their customers more and get federal grants to pay for charging infrastructure, middle- and low-income utility customers will get hurt. We don’t think that is the committee’s intent and hope it will make clear that it does not want double dipping on subsidies by utilities.”

In May, industry associations including NACS, SIGMA, the Petroleum Marketers Association America and NATSO raised concerns that a separate piece of legislation could give public utilities an unfair advantage over the private sector. The Leading Infrastructure for Tomorrow’s (LIFT) America Act (H.R. 2741) would allow utilities to use rate-payer dollars to invest in EV charging infrastructure.

“We have no objection to utility companies investing in EV charging infrastructure provided they do so via their unregulated businesses,” said Anderson of NACS when the LIFT America Act was introduced. “This would result in a level playing field, where all parties are putting capital at risk and have similar incentives to respond to consumer demand and compete on quality and price.”

 

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