Thursday, April 25, 2013

How To Make A Dollar In the EV Charging Industry

Ok, so the title might be a bit misleading, but on my post about a State-sponsored fee-based quick charge network, I solicited responses on reader thoughts. Got some great suggestions and questions came up and some require a pretty lengthy response which has filled up a few pages on Facebook so thought I would repeat some of that information here.

1) Why should we pay an annual subscription plus a charging fee?

2) What about non-profits like "Adopt A Charger" ?

3) Why do I think the State is the best option to run these chargers since they screw up on these kinds of things all the time?

1) Why should we pay an annual subscription plus a charging fee?

First of all, this network wont cost that much to install. On state property so the land is already paid for in a sense. They will be installed on existing sites and will have some traffic already from state workers coming and going about their business so a small level of security will be in place and because many will be on DOT sites, most already have easy highway access.  But the ongoing costs will need to be partially funded to get past the legislature and there needs to be some way to pay for expansion and future upgrades.  The subscription fees will only pay a portion of installation, maintenance and upkeep. But the per session fees should be earmarked for a portion of the  expansion costs.  This prevents an "open ended" expense report and allows expansion based on demand.

Now getting money from the State is not an easy thing to do especially if the benefits are not easy to quantify and EV charging really isn't. Yes, it will help WA tremendously but how much?  Maybe looking at our neighbors would help.  In a Green Car Reports article by Antony Ingram about the revenues attributed to EV adoption in Oregon
The state has the most charging stations per capita of anywhere in the country, with around 800 total charging stations. That's more than enough for the state's 2,500 registered electric vehicles, and it's good for the economy too. Oregon's electric vehicle industry is responsible for more than 1,600 jobs, over $260 million in economic activity and over $22 million annually in federal taxes.
Naturally no info on how those numbers came about but WA could encourage tourism and spending in depressed areas of the state like Grays Harbor for example by just putting in a few more charging stations in the area.  Even if just passing thru, people will be there for 30 minutes getting a boost which could allow a local store or restaurant to get business that gas powered cars would simply drive by.

Finally, fees for charging helps with a bit of exclusivity. Remember part of the network like along I-5 will be side by side with free chargers (for now...) . Paying a fee will hopefully mean a better chance of being able to charge right away instead of waiting for the 1-2 ahead of you at the free stations. Also many will choose not to subscribe or at least not participate robustly.  There was an incident in Vacaville CA where an RV was literally camping at the charging station for weeks there plugged in sucking up free juice 24/7 until the city finally got around to passing ordinances to stop it.  Lets not be subject to that kind of stuff. Remember, WA does have cheapskates like me and I am pretty sure the temptation would be too great for me to resist.

 2) What about non-profits like "Adopt A Charger" ?

Hey, the more the merrier and  Jack Anderson has a great project going installing high capacity AC L2's capable of providing up to 80 KW but for me and my lowly 3.8 KW charger, it is of limited help. They are a lot cheaper than Chademo and Jack says they are more reliable than DCFCs (which aint saying a lot...)  Also he is in Douglas County which as we all know is famous for being just this side of  "giving it away" (they reputedly have the lowest electricity rates in the country) This project is great because like Gray's Harbor and the Olympic Peninsula, it covers areas that business interests will ignore due to insufficient traffic levels but still provides access to places we do want to see! So for destination charging, it will be appreciated.   If you are interested in supporting this idea and having a great time doing it.  Sign up for the EV Wine tour! 

3) Why do I think the State is the best option to run these chargers since they screw up on these kinds of things all the time?

The biggest reason is because the State will benefit a lot more than we will.


One key point is simply familiarity which hopefully means "learning from past mistakes"  in that the State already runs several programs using the same model I suggested.  Like the Ferries, Bridge Tolls or even the Fishing and Game Depts; several levels of access controlled by regions would allow the user to pick what suits them best.  This gives the user more of a sense of "value" and control.

One scenario (used for clarification only. Probably a ton of better ways to do it I am not aware of ) is access by zones.  Say its $50 per zone annual fee and you could pick any combination of zones.  Naturally there would also be limited time passes available if a single trip outside your zone is planned or for out of state tourists.

Zone 1 would cover I-5
Zone 2  covers I-90, Highway 2 and the area Between Puget Sound and the Cascades
Zone 3 covers the Olympic Peninsula
Zone 4 covers the Coast including SW WA and Greys Harbor
Zone 5 Cascades going East
Zone 6 Eastern WA.

Get more than 2 zones, get a discount and so on.

But the main reason why the State should do it is because driving EV is right on so many levels but mostly indirectly.  "Collateral benefits" is something a for profit business cannot survive on but the State can.  The State lives on people within its boundaries spending money.  Whether we spend it on gas or we spend it on electricity, a dollar is still a dollar but how much of that "gas dollar" will stay in the state to be re spent verses an "electrical dollar?"  I don t have any proof of this but guessing revenue from buying something produced in state will go farther than having to pay for something that has to be imported from out of state.

Now the actual cash transactions from buying electricity is not what the State will thrive on. Its the money spent on local businesses that was NOT spent on imported oil based products.  Hey, maybe there is a buck to be made after all!

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