Utilities in Montana gain approval to sell power to EV charging stations

Jordan Smith
By Jordan Smith
For business

Lawmakers in Montana are pushing to expand the state’s use of electric vehicles (EVs). The Montana State House and Senate recently adopted legislation allowing utilities to sell power to EV charging stations, lifting a prior ban that supporters hope will promote the emergence of EV infrastructure across the state.

The first of two key provisions in the bill ends the practice of defining EV charging site operators as public utilities. This definition prevented utilities from selling power to the stations, as transferring power from one public utility to another could be seen as unfair competition.

The second important change permits power used at an EV station to be charged at a different cost than the price of electricity. This ensures that electric utilities and EV charging operators can both profit from new business opportunities. As the wording in the bill states, “Any rate for providing electric service to an electric vehicle charging station must be designed by the [Montana Public Service Commission] to fully recover from the electric charging station customer the full cost of providing the service without subsidization from other customers or customer classes.”

RELATED: How are electric vehicles changing state policies?

Montana is currently well behind the national average for EV use; just 0.47 percent of vehicles on state roads are battery-powered. By contrast, the median national EV rate is almost twice that figure. In California, where progressive policies have bolstered investment in renewable technologies, 7.8 percent of all vehicles are electric.

Northwestern, Montana’s largest utility, is a firm backer of the new measure. In a statement from Northwestern’s spokesperson Jo Dee Black, the company explains, “This is an energy trend Northwestern supports. We want to be part of the conversation and development as this market develops.”

Utilities seek to cash in on electric vehicle market

The law change in Montana is part of a broader trend during which utilities across the country are strengthening their presence in the EV market.

Duke Energy, the largest North Carolina utility, recently invested $76 million to encourage EV utilization in the state. The plan, which will be funded by ratepayers, includes a $1,000 subsidy for customers who set up a private EV charging station at their home. The investment will also cover the installation and operation of 800 charging stations across the state, as well as the purchase of 85 electric school buses and chargers. Rebates of up to $2,500 will be distributed to approximately 900 commercial and industrial customers to subsidize charging stations. Duke Energy has also launched a smaller EV investment program in South Carolina, and plans to install an additional 500 EV charging stations in Florida.

Overall, investor-owned utilities represented by the Edison Electric Institute are financing some $1 billion in electric vehicles and related infrastructure across the country. More major utility investments were unveiled earlier this year in Michigan and Maryland, while California, New Mexico, and Oregon have all introduced legislation that requires utilities to submit EV investment plans for approval.

Utilities view the EV sector as a growing market that could help offset losses caused by energy efficiency programs and the expansion of rooftop solar. Additionally, utilities could potentially use EVs as energy storage in the future.

Increased competition

Brett Smith of the Center for Automotive Research in Ann Arbor, Michigan, identifies another important factor driving utilities to focus more on EVs and charging infrastructure. “If the independent companies are in all the prime spots,“ says Smith, “what is left for the utilities?”

The independent companies Smith is referencing include automakers like Tesla and Volkswagen. Tesla, which is the current leader for EV sales in the United States. The company also owns and operates roughly 1,400 charging stations globally, with hundreds in the U.S. And Electrify America, a subsidiary of German automaker Volkswagen, intends to invest $2 billion in EV infrastructure and education over the coming decade.

Problems remain

Although there is growing interest in EV charging infrastructure, the investments will have to overcome several key challenges if EV usage is going to expand. For one, the overall lack of charging stations remains a problem and discourages potential customers from purchasing EVs. According to the latest figures, public EV charging stations are outnumbered by gas stations 7 to 1 across the U.S. EV advocates say this difficulty can be at least partially resolved by encouraging at-home or at-work charging stations.

Another complication is that the EV sector has no standardized charging system, making some charging stations inaccessible for certain electric vehicles. While Ford and GM use one type of plug, Tesla uses another. Fast chargers, which can provide an EV enough charge to travel up to 20 miles in a minute or two, require a different type of plug to those used for normal chargers, which can only charge a vehicle overnight. As Nick Sifuentes, executive director at the Tri-State Transportation Campaign, explains, “Charging stations are going to need to have two or three different types of plugs, and people will need to be able to charge at different speeds because their car might not have a supercharger.”

RELATED: Solar roads to pave the way for eco-friendly transportation

Jordan Smith is a freelance journalist and translator covering issues related to energy, the environment, and politics. His work has appeared on the independent news site Opposing Views, and at the Canadian Labour Institute.