What utilities can do to secure the eMobility future — and their own

With investment in EV infrastructure, utilities could capture billions in additional revenue and prepare for the industry’s future.

In brief

• The Infrastructure Investment and Jobs Act includes $15 billion toward investment in electric vehicle (EV) infrastructure. 
• Utilities are in a position to drive a cost-effective and reliable eMobility system.
• Collaboration with the transportation industry is necessary for accessing government funds and building strong business relationships.

With the passing of the historic Infrastructure Investment and Jobs Act (IIJA) in November, the Biden Administration has launched its most significant action yet in response to the climate crisis. According to National Renewable Energy Laboratory research, clean electrification can get us three-quarters of the way to net-zero emissions by 2050, keeping global warming to 1.5° and averting the most severe consequences of climate change. The IIJA aims to help achieve this goal with huge sums for investment in eMobility, including:  

• $5.0 billion for building publicly accessible electric vehicle charging infrastructure over five years
• $2.5 billion to build public alternative fueling stations, including EV-charging and hydrogen fueling, along designated corridors over five years
• $7.5 billion for procuring electric and low-emissions ferries and school buses

In addition, the Build Back Better bill, which has passed the House, provides tax credits for consumers that could rise as high as $12,500 per electric vehicle.

If this hasn’t made electric utilities sit up and take notice yet, it should. This is a call to action — the disruptive wave of change that has swept through other industries over the last 20 years is poised to crash on the electric industry. Investment in EV infrastructure and widespread adoption hold potential for utilities to capture billions of dollars in additional revenue — if they act now to capitalize on the funding and prepare for the future of their industry. Otherwise, they risk being outflanked and ultimately left behind.

As the owners of electric generation and distribution, builders of the transmission system and keepers of the electric grid, utilities are in a distinctive position to lead the charge to a safe, effective, equitable, and efficient eMobility system — one built on tried-and-true principles for delivering the least-costly, most reliable electricity across the country.

But there are challenges. First and foremost, while any power engineer can estimate the amount of load that will be required for a given fleet of electric vehicles, the difficulty lies in planning where electrons need to go and what to do when things go wrong. For widespread adoption of electric vehicles to work, new infrastructure has to provide the same confidence and convenience as the combustion engine, allowing people to travel anywhere at any time. And that requires understanding and addressing the electric system tolerances, capacity and risks while building in contingencies for big storms or other emergencies that could lead to brownouts or blackouts that could strand EV fleets and owners.

Second, the rise of eMobility requires a potentially uneasy marriage of two powerhouse industries — transportation and electricity. No one knows better how to plan and build electric infrastructure than electric utilities. However, utilities are relative naïfs in the transportation industry, which has its own requirements, tolerances, regulations, and political wrangling. There are many parties to coordinate, including the federal government, local and state transportation authorities, the automotive industry, the Federal Energy Regulatory Commission (FERC), state utility commissions, school districts and others.

Third, utilities will not be able to access most of the federal dollars directly. Grants are coming from the Federal Highway Administration, Federal Transit Administration and the EPA and are going primarily to state and local transit and other public sector agencies. While utilities will be called on to build infrastructure, they will need to work with other stakeholders to gain a more substantial piece of the pie. 

eMobility actions utilities can take now

Utilities risk their dominance of the distribution system and the electric industry as a whole if they take a wait-and-see approach. Already, companies are forming their own load-serving entities, circumventing utilities altogether. More private sector companies are sure to do the same, spurred by a desire to capture IIJA funds to commercialize the electric infrastructure, both in terms of data center-like uptime guarantees and guaranteed low-cost clean energy.

The following actions are imperative: 

Cultivate a multi-stakeholder approach

eMobility infrastructure needs to be well-architected and well-conceived. That requires understanding and navigating a complicated multi-stakeholder environment. Start by prioritizing transportation, regulation and automotive industry groups, school districts, and other parties that may be applying for funds to begin building key relationships. Some utilities have had a history of unproductive relationships with government agencies. To form effective partnerships, these breaches need to be healed.

Create an overarching strategy for a nationwide electric highway

US utilities can facilitate and accelerate the electrification of transportation by creating a common, comprehensive and responsible approach towards building a nationwide electric highway. This highway will be national-critical infrastructure, designed to foster public confidence, with seamless charging for drivers traveling across the country and the reliability, resilience and affordability utility customers nationwide have relied on for decades. As this highway will be a core component in our nation’s decarbonization journey, the energy provided should be decarbonized to the maximum extent possible within the traditional context of reliability at least cost.

Submit development proposals and grant applications

As state and local agencies will be afforded the majority of the funding through the IIJA, utilities will need to find ways to partner with these agencies to access funds. Utilities can begin now to prepare and submit unsolicited development proposals. They can also bring ready-made grant applications to agencies, as competitive processes require detailed grant responses with shovel-ready projects. Utilities can be working to prepare these and site plan mockups for charging projects and portfolios. Finally, many of the grants require approximately a 20% non-federal funding share. Utilities could invest funds leveraged against the 80% federal grant share.