Electric Vehicles

N.Y. unveils $31.6 million of incentives for EV charging stations

New York Gov. Andrew Cuomo recently announced that New York is making up to $31.6 million available to expand the number of electric vehicle fast-charging stations in the state.

The plan, which was approved by New York State Public Service Commission, is designed to complement existing New York State Energy Research and Development Authority and New York Power Authority funds to spur the development of fast-charging, direct current electric vehicle charging stations.

New York has set a goal of having 10,000 electric vehicle charging stations in place by the end of 2021 and 800,000 zero-emission vehicles operating in the state by 2025.

Under the just announced plan, the $31.6 million in funds will be available for nearly 1,075 new, publicly accessible stations that can charge an electric vehicle in 20 minutes instead of the four to eight hours required using a lower voltage, level-two charger.

The plan envisions the DC fast chargers being installed either by private sector developers or public entities such as municipalities, the New York Power Authority or the state’s Thruway Authority.

The $31.6 million program is being funded with uncommitted, unencumbered NYSERDA legacy funds, specifically from remaining System Benefits Charges, as well as a small surcharge for customer groups that did not contribute to the SBC.

Public Service Commission approval was necessary to authorize New York’s investor- owned utilities to utilize the funds.

The funds from the program will flow as incentive payments from the IOUs to the developers of the fast charging stations. The incentives will be made in the form of an annual payment from utility to developer that declines over time and ends in 2025.

The incentive is designed to reduce the impact of the demand charges the owners of the charging stations would otherwise have to pay.

“The challenge is how to price the charger so someone will actually use it with current electric rate structures and low utilization,” Nathan Markey, regulatory affairs manager at NYPA, said.

Without the incentive, the owners would have to pay utilities high demand charges because the charging stations would be used infrequently until electric vehicles become more widespread. Those costs would have to be passed on to the owners of electric vehicles, who pay only energy charges. The result would be prohibitively high charges for drivers and high operating costs for developers of charging stations, both of which would undermine the state’s goals for electric vehicle adoption.

Even if the charging equipment were free, the demand charge would be higher than what the owner of the charging station could charge customers, John Markowitz, lead engineer who heads up NYPA’s electric vehicle program, said. “And the problem only gets worse as EVs get better.” Electric vehicles with more powerful batteries and longer driving ranges pull power from the grid even more quickly, incurring even higher demand charges, Markowitz said. That is a risk the owners of charging stations are not eager to take. The incentive is designed to address that concern.

NYPA recently announced its own EV program that calls for the build-out of 200 chargers spread throughout the state. The utility has allocated $40 million in a first round of funding that “covers us through 2020,” Markowitz said.

Separately, PSEG-Long Island and the Long Island Power Authority are planning to implement a support program for fast-charging stations by mid-2019.