Counterpoint: Why EV drivers should gladly pay for public charging

This is a guest post brought to you by EV enthusiast and fellow electric motorcycle builder Ned Funnell. He’s an engineer-turned-missionary who appreciates the simplicity and efficiency of electric drive, and doesn’t mind cleaner air for his 9-month-old. 

Demystifying the Slow Growth of the Fast Charging Network- or, Why EV drivers should gladly pay for public charging

Requests and pleas for wider distribution of DC Fast Charging, also known as Level 3 charging, are common. So too, are complaints about the high costs of charging at many of these facilities. If the consumer demand is there, why aren’t businesses rushing to sell electricity to begging EV drivers? Let’s take a closer look into what this issue looks like from the inside.

The key concept in operating an EV fast charging station is Demand. It’s something that the average person doesn’t know about, since power companies typically bill residences simply for total usage. Demand is how much power a site such as an office, factory, school, or DC fast charger uses at its very peak moment of use. For small consumers like homes and small businesses, Demand is both comparatively small, and more or less predictable- the power company doesn’t try to measure and charge for it. At home, it doesn’t matter to us when we use power, only how much it adds up to in the end.

To understand the other end of the spectrum, let’s look at a worst-case scenario demand user: electric steel mills. These mills use (demand) thousands of kilowatts, but do it in spurts of several hours, then shut off. That’s a large fraction of an entire power plant, being turned on and off. Traditional power plants cannot instant start making much more or much less electricity to respond to these changes; they have to ramp up and down slowly. The steel mill suddenly demanding several megawatts and then suddenly shutting it off would cause mayhem at the power company, if not for the close communication between Demand-heavy sites and the power company. Managing and meeting Demand is the power company’s primary concern.

Utilities have to build big, expensive power plants to cover the maximum, worst-case demand for power – not just an average.Image credit: Shell.

 

Demand is also a matter of dollars- the steel mill (or any business larger than a Walgreens) pays not only for the amount of electricity they use, but also a Demand Charge. This is based on how much they use at once. The power company is essentially charging for the privilege of having large amounts of electricity available when needed, because it costs the utility more to provide. To balance things out, the business pays less per kilowatt-hour (kWh), which is the measure of how much electricity was used.

How does the demand charge work? Basically, sites using more than just a normal home get a special meter which measures and records how much is being used, and when. Say that a company needed to turn on every machine and appliance in the building for fifteen minutes- the power company would have to provide enough power for that huge load, even though it only happened for fifteen minutes, so that spike of maximum use, as short as 15 minutes, dictates the Demand Charge.

I live in Kentucky. Electricity is cheap here- really cheap. I pay 7.7 cents/kWh, all day and all night, summer and winter. Kentucky is about the best-case scenario, fiscally, for energy. It’s also one of the most coal-intensive states- no coincidence there. So, what if we wanted to build an L3 charger site here in Kentucky, which is cheap energy heaven? Let’s take a look.

A standard CHAdeMO charger puts out 50 kW (kilowatts). It takes in slightly more, though, because it’s not perfectly efficient -think of it as overhead. Let’s assume it wastes about a tenth, meaning it uses 55kW. I’ll also want to have a couple L2 chargers on site too, in case the L3 is occupied, and so users not in a rush can pay me to charge too. Let’s say those are 30A EVSEs, or about 6.2 kW[i]. So what will electric costs look like? Well, let’s figure out the Demand. If all three of those charging opportunities were used at once, then the Demand would total up to about 67 kW. Since we’re using so much electricity all at once, that means we have to subscribe to a rate with the power company that includes a Demand Charge. How much? My local utility, KU, charges $15.30 per kW in the summer, or $13.20 in the winter[ii]. That’s going to hurt!

The good news is that the price per kWh is lower- only 3.56 cents! More bad news, though- being on a commercial rate also means the service charge is higher. This is the fee a site pays just to be hooked up to the grid before a single kW or kWh is accounted for. It is usually something like $10 or $15 for homes, but for commercial service, KU charges $90.

So let’s open our charging station! Day 1: Three EVs all come in on opening day and start to charge for the cameras at the opening ceremony. The Demand is 67kW for a brief time while the EV using the CHAdeMo charges- and I’ll owe the charge for that whether I use it once, or every day. That EV pays $5 for the charging session, and the other EVs pay $0.49/kWh for their juice. Let’s take a look at the books for the month after day 1.

	Opening day
Income
Fast charging	$                     5.00
Level 2 charging	$                  17.64
Expenses
Power usage	$                     0.19
Connection fee	$                     3.00
Demand charge	$            1,025.00
Profit or Loss	$          -1,005.55

 

WOW! We lost a thousand bucks during the opening ceremony! I’m not paying a lot for the power, but I’m paying a lot for the privilege of having it when I need it. I’ll have to make up for these costs before the bills come. Let’s say during the month, I get nice brisk business: five fast charging sessions per day at $5 each, and ten level 2 charging sessions per day at $0.49/kWh, all taking in an average of 12kWh.

	Per month
Income
Fast charging	$                750.00
Level 2 charging	$            1,764.00
Expenses
Power usage	$                192.24
Connection fee	$                  90.00
Demand charge	$            1,025.00
Profit or Loss	$            1,206.76

 

Excellent! $1206 of profit per month! Why isn’t everyone doing this? Well, ignoring the wildly optimistic idea of 10 drivers consistently choosing to fill their cars with my outrageous $0.49c/kWh electricity, we need to figure in the over head. We need to pay for the maintenance- hooligans cutting off L2 cords for the copper, keeping the parking spaces plowed of snow, and, of course, technician visits to keep the L3 unit working. After all, fast charging stations have a terrible reputation for reliability. Those breakages takes a chunk out of revenue, too, in lost business. Let’s make a nice round (and also optimistic[iii]) number out of it and say that we’ll only have to pay an average of $500 per month for those things[iv]. That leaves us with $706- still a nice amount to take home, right?

Wait-I haven’t paid for any of the start-up costs yet! L3 chargers are VERY expensive. $50,000 is a common number for L3s, not to mention those two L2s. Commercial units with installation are about $5000 or more, to be realistic. So we paid $60000 to get up and running. Let’s say the land I built on was free from the local government, and the asphalt company for the parking donated their services, and the bank gave us an interest-free loan. The power company will actually often bring the power to a new site for free- they figure on making it back eventually. So I’ve got $60k to pay off with $706 per month. That comes to a mere… 85 months! Seven years pass before the first dollar of profit would come from this incredibly optimistic scenario.

Does this look cheap to install? Image credit: WA State DOT.

 

The heart of the matter becomes clear in comparison to home charging. Demand charges and maintenance are two things you don’t have to pay for at home, and that’s the golden halo that makes owning an EV as an individual so great. That cheap 7.7 ¢/kWh is available for the taking with zero additional cost, after an EV owner pays $400 – $1400 for an EVSE installation. Making that same electricity available outside your house, however- and through sophisticated quick-charge equipment – opens a Pandora’s box of costs that turn the proposition of opening a profitable quick charging station into a business nightmare.

Think of it as eating at home instead of eating in a restaurant. One can make their own meals at home, frugally and with equipment they already have access to, for $1-5 a meal. When I leave behind the asset of my kitchen, though, I expect to pay $10-25 for someone else to feed me from their kitchen. There are staff to pay, plates to clean, menus to print- a whole array of costs that go into a meal on the road. No one expects a restaurant to serve them a meal for the cost that that it could be had for at home.

So, please, EV owners, don’t call charging site owners usurious or greedy when they charge you several times what you pay for electricity at home. In all reality, they are probably not even covering their own actual costs. Dealerships don’t host L3s to make a buck on the power, they do it to make bucks selling cars. Fast charging operation is a good business case for just about nobody- at least as long as EV owners complain loudly about paying more when one the road than what they pay at home. EV owners have to brin g money into that business in some other way- and it takes a lot of sandwiches and coffee to make up for the gap shown above.

If you want to fill up for two dollars, charge at home. Don’t ask a company to bring electricity to you while away from home for essentially nothing. If you’re driving an EV to save money- understand the limitations. If you’re driving an EV to starve a terrorist- thank you. If you’re driving an EV to save the planet, cough it up- and don’t scorn those businesses trying to make EV infrastructure work in spite of the nigh-impossible business case. We all need public charging infrastructure to grow, so let’s not scoff at paying for what we use.

Tagged as: CHAdeMo, charging, Charging station, Level 3