The transportation sector leads U.S. greenhouse gas emissions, making electric vehicle (EV) adoption crucial for climate goals and air quality improvement. Public DC fast charging infrastructure is essential for widespread EV adoption, particularly for drivers without home charging access and to address range anxiety.

However, electricity costs, especially demand charges, present significant challenges for DC fast charging stations. These charges, based on peak electricity usage, can dominate operating costs and hinder infrastructure deployment.

Here are seven key principles for effective EV charging rate design:

1. Make alternative rates optional to accommodate various charging use cases and promote competitive pricing.

2. Replace demand charges with time-varying volumetric rates to reduce financial uncertainty and encourage beneficial charging patterns.

3. Extend existing low-load factor rates (used for agricultural activities and sports facilities) to EV charging operators.

4. Ensure rate availability for both new and existing customers to encourage infrastructure investment.

5. Design different rates for various charging scenarios (workplace, public, fleet) while maintaining universal access.

6. Implement long-term rates (10+ years) to provide investment certainty.

7. Minimize subscription charges that create entry barriers for charging operators.

Utilities nationwide are implementing commercial EV rates to accelerate transportation electrification. The Infrastructure Investment and Jobs Act (IIJA) requires states to consider measures promoting transportation electrification, including rates that encourage third-party charging investment.

As these rate design solutions gain traction, we can expect increased charging infrastructure deployment, driving EV adoption and supporting sustainable transportation.

1 https://www.cbo.gov/publication/58566.

2 Studies in states such as Arizona, New Mexico, Colorado, Florida, Minnesota, Nevada and Michigan have quantified the amount of bill savings that can be expected to accrue to electric utility customers due to transportation electrification.

3 https://www.evgo.com/white-papers/costs-ev-fast-charging-infrastructure-economic-benefits-rapid-scale-up/.

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