California's charging stations deal has industry in an uproar

Apr 11 - San Jose Mercury News

A proposed $100 million settlement with the California Public Utilities Commission that requires NRG Energy to build a network of electric vehicle charging stations has caused an uproar within the electric vehicle community over concerns that NRG will become the default provider of charging stations throughout the state.

In late March, Gov. Jerry Brown announced a landmark agreement as part of a legal settlement stemming from the state's energy crisis in 2001. NRG will invest $100 million of its money to build a network of electric vehicle charging stations, mainly in the Bay Area, Los Angeles and San Diego.

NRG's electric vehicle charging subsidiary, known as eVgo, operates 11 electric vehicle charging stations in Houston and one in Dallas, but the company is eager to expand. Though everyone in the industry applauds the overall goal of quickly putting in charging stations, many fear the proposed settlement, which was largely crafted in private and caught many by surprise, gives eVgo a monopoly position in California.

"This is simply a privatized network that, with the blessing of the state, will likely cause more harm than good in the long run," said Chelsea Sexton, an electric vehicle marketing expert and consumer advocate.

The agreement with NRG settles years-old claims that Dynegy Energy overcharged California in a power contract signed in 2001, during the height of a costly electricity crisis that drove PG&E to bankruptcy and

plagued the state with rolling blackouts.

NRG acquired Dynegy's California assets in 2006 and became responsible for its debts. State regulators have been under pressure from the Federal Energy Regulatory Commission to reach an agreement.

The Bay Area EV Strategic Council, formed a year ago to accelerate the mass adoption of electric vehicles in the region, sent a letter last week to Brown outlining several concerns. Chief among them is that NRG's business model requires consumers to sign up for a subscription plan and pay a fixed monthly rate to charge their electric vehicle. Many on the council say charging stations should be open to any electric vehicle driver, in the same way that drivers of gasoline-powered cars can refuel at any gas station.

As part of the settlement, NRG agreed to allow the 200 fast chargers to be "pay per use" and open to any EV driver for the first five years; it's not clear what the model will be after the five year period sunsets.

Drivers will pay a minimum of $7 to charge their cars at the fast-charging stations, and a maximum of $10 during off-peak hours and $15 during on-peak hours.

"We feel like this rewards a bad actor in the energy field with another opportunity to dominate the market," Marin County Supervisor Steve Kinsey, co-chairman of the EV Strategic Council, said in an interview Tuesday.

NRG argues that the agreement, which is being finalized by legal teams before being filed with the federal commission, will jump-start a nascent industry.

"We are building an infrastructure that's designed to encourage EV adoption," said NRG spokesman David Knox. "As we have more electric vehicles on the road, it will benefit all EV companies. There's nothing in the agreement that prevents another company from making a similar investment."

Advocates note that the settlement triples the investment made in charging stations and should ease concerns about "range anxiety" among potential drivers. Some players have privately said the concerns are "sour grapes" from NRG's competitors in the relatively new charging market.

But even supporters of the deal agree that many details remain unknown, and they are eager for more information.

"We don't have any infrastructure right now, and this is a $100 million investment in infrastructure," said Jay Friedland of Plug-In America. "But there have to be very clear safeguards for consumers: You've got to be able to go to a charging station and charge, regardless of what club you're in, and I don't want price gouging. We're going to act as a consumer watchdog, and we plan to be very involved in the process as it unfolds."

The settlement requires NRG to build at least 200 fast-charging, 480-volt stations, which would allow electric car owners to "top off" their batteries in less than 30 minutes, along major highway arteries in the Bay Area, San Joaquin Valley, Los Angeles and San Diego. NRG will own the stations.

The settlement also requires NRG to build at least 10,000 individual charging stations -- probably in blocks of 10 at 1,000 separate locations -- at apartment complexes, office parks, schools and hospitals. NRG will have exclusive access to the customers at those locations for 18 months.

Brown's office remains supportive of the deal and says concerns should be addressed to the PUC.

"Governor Brown applauded the Public Utilities Commission's settlement with NRG because it will jump-start the construction of a $100 million electric vehicle superhighway and keep California ahead of the curve on electric vehicle technology," press secretary Gil Duran said Tuesday. "We trust that the PUC will consider any valid concerns that might be raised before the settlement is finalized."

Contact Dana Hull at 408-920-2706. Follow her at Twitter.com/danahull.

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