Consumers Energy Leads Again on EV Advancement

Co-authored by Charles Griffith and Scott Hardin

Jackson-based utility Consumers Energy has made a new infrastructure proposal to state regulators that will tackle one of the primary obstacles to electric vehicle adoption in Michigan. We’ve long argued that stakeholders in Michigan must work together to establish a robust charging infrastructure in order to make consumers comfortable with, and capable of, driving EVs all across the state. The new plan proposed by Consumers, dubbed PowerMiDrive, will help accomplish exactly that.

Consumers is proposing a $7.5 million, three-year pilot program with multiple components to support the growing EV market. The company proposes to offer rebates for installation of residential charging stations, for public level 2 charging stations, and for DC fast chargers along state highways. This would be a huge win not only for current and potential EV drivers but for all electricity customers as well. Consumers estimates that the program will generate revenues that more than offset the costs of the investments proposed, which would then help drive down rates.  This kind of investment is a bit of a no-brainer, as long as implemented in a smart and effective manner.

Primarily, this program will address Michigan’s current EV charging infrastructure gap. As noted in Executive Director for Corporate Strategy Michael Delaney’s testimony to the Michigan Public Service Commission, Michigan has far fewer charging stations than it needs to support the 15,000 EVs currently on the road. As that number continues to increase, that gap continues to widen.  According to a study by the National Renewable Energy Laboratory, the state needs at least 1,095 public chargers and 60 DC fast chargers to support the projected number of EV’s in 3 years. Some studies suggest even more may be needed. As of now, the state only has 467 public chargers and 16 DC fast chargers leaving a significant gap.

And given that the number of EVs in the state is expected to grow to anywhere between 150,000 and 800,000 by 2030, the infrastructure gap will only get worse without action from utilities, regulators, and automakers.

Fortunately, Consumers’ PowerMiDrive is a great example of what that action should look like.

If approved, participants in the residential rebate program will receive up to $500 for installing a charger and participating in a new time-of-use rate structure that will give discounted rates for EVs that are charged during off-peak hours (7 PM-11 PM, 6 AM-2 PM), and super off-peak hours (11 PM-6 AM). By incentivizing off-peak charging, most EV charging would primarily occur at night when demand is typically low, limiting the need for more costly energy generation resources.  The number of residential rebates proposed is uncapped.

To encourage the installation of public level 2 chargers, Consumers proposes to offer rebates of up to $5,000 per charger to potential site hosts, with four chargers available per site and a cap of 200 rebates. The public DC fast charging component of the program would offer up to $70,000 rebates to site hosts with a cap of 20, and Consumers plans to take a holistic approach to site selection.

Additional components to the program include a public education initiative that will teach potential EV customers about the benefits of EVs and how to realistically measure their own driving needs, as well as reach out to current drivers and potential site hosts. Consumers plans to build out an IT system to support the whole initiative.

The company showed a full understanding of, and commitment to, the benefits of electrification in Delaney’s testimony to the MPSC.

Delaney told the MPSC that EVs can “(i) offer operational savings to EV drivers resulting primarily from fuel savings; (ii) support local industries in the state by increasing spending and creating jobs; (iii) reduce dependency on foreign oil; and (iv) provide significant environmental benefits to all Michigan residents through reduced emissions.” He also spelled out the benefits to Michigan electric customers. “Additionally, from a regulatory perspective, increased EV adoption puts downward pressure on electric rates by spreading fixed costs over increased electric load which would ultimately reduce electric rates for all customers.”

In further support of customers, Consumers is working on technology that will allow the company to bill residences separate rates for EV charging without having to install a second meter. If they succeed, this feature will be included with the program launch in 2019.

The company plans on using this pilot as a learning opportunity to prepare themselves for a coming influx of EVs in the state, while simultaneously encouraging the EV boom to happen a bit sooner.

The Ecology Center will be working over the coming months with its partners in ChargeUp Midwest and other stakeholders to fine-tune the proposal and help to ensure its approval by the Michigan Public Service Commission.  The Commission has already led the way in preparing for this proposal with its series of Technical conferences over the past year, and a similar proposal from DTE Energy is expected in the coming days as well.  Now is the time for Michigan to become a leader not only in producing world-class electric vehicles but in ramping up the transition to EVs on Michigan’s roads as well.  Let Michigan’s EV Revolution begin!

Read Crain's Detroit Business Interview with Charles Griffith, Ecology Center's Climate & Energy Director

Published on June 27, 2018