Utility trade groups press EPA to embrace EVs in fuel standard rewrite

Source: By Gavin Bade, Utility Dive • Posted: Thursday, May 24, 2018

  • Major utility trade groups joined with automakers on Tuesday to press the Environmental Protection Agency to include electric vehicles as a compliance option for fuel economy standards under review by the agency.
  • Any changes to fuel standards should “extend and improve the current regulatory mechanisms that provide critical support for EVs and advanced vehicles,” groups representing investor-owned utilities, co-ops and municipal utilities wrote to the agency. EPA last month opened the Obama-era fuel rules for review.
  • The letter is the latest indication electric utilities are leaning into public policy fights over electric vehicles. A group of utilities joined with Tesla to sue the EPA over its fuel standard review earlier this month, and in April, utility interests blocked an anti-EV resolution at a conservative public policy forum in Michigan.
Electric vehicles could be a key source of power demand for electric utilities, but only this year have large companies and trade groups stepped up public lobbying efforts to support their growth.
In a Tuesday letter to EPA Administrator Scott Pruitt, the three major U.S. utility trade groups said allowing EVs to count as a compliance option toward revised fuel efficiency standards could help automakers comply and further cut carbon emissions.

“[W]e continue to support standards that provide important flexibilities and recognize the role of EVs as a compliance solution,” the Edison Electric Institute, National Rural Electric Cooperative Association and American Public Power Association wrote. “Increasing the effectiveness of these flexibilities will further encourage manufacturers to continue investment in innovative technologies that have experienced broad market adoption headwinds.”

Under the Obama-era fuel standards, new light duty vehicles would need to get over 50 miles per gallon by 2025. The White House found those standards to be “technologically feasible” before Obama left office, but Pruitt’s EPA withdrew that determination in April, saying past analyses were “optimistic” with respect to EV growth and technology advancement.

The administration is now reportedly circulating a proposal that would freeze fuel standards after 2020, likely prompting a fight with California, which has a legal waiver under the Clean Air Act to set stricter fuel standards.

The letter, also signed by the Alliance of Automobile Manufacturers and Global Automakers Association, stresses that the groups support stricter fuel economy standards that “incorporate policies from California” and other states with stricter rules. Allowing EVs as a compliance option, they wrote, could help provide automakers flexibility to meet those standards.

“[A]vanced technologies, such as EVs, can provide key flexibilities to automakers in a way that maintains a single national program for fuel economy and GHG standards,” they wrote. “Further, the [EPA] should consider reforming and improving the off-cycle credits process in a manner that allows manufacturers to efficiently access such credits.”

The utility letter to EPA is the latest in sector efforts to support EVs. Earlier this month, a dozen utilities and Tesla sued the EPA, asking the D.C. Circuit Court to review the agency’s decision to reopen the fuel standards.

In April, EEI and Duke Energy also blocked a policy resolution from oil-backed groups that would have prevented utilities from building out EV charging stations and discouraged states from subsidizing non-gas vehicles. The proposal came during a meeting of the American Legislative Exchange Council, a secretive group that convenes policymakers and businesses to design model legislation for state governments.

‘We are extremely disappointed in these efforts to limit our ability to serve our customers,” EEI spokesperson Brian Reil said at the time. “As the operators of the energy grid, electric companies play an important role in developing charging infrastructure and expanding access to electric transportation for our customers and the communities we serve.”