How do different states’ regulations affect public charging costs

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Different states’ regulations significantly influence public electric vehicle (EV) charging costs through how they classify and regulate EV charging stations, billing methods, and required payment structures.

Impact of State Regulations on Public Charging Costs

1. Classification of EV Chargers and Public Utility Status

• Some states define public EV charging station operators as public utilities if they resell electricity, which subjects them to state utility regulations and rate controls. This has historically prevented many operators from charging strictly based on the actual electricity consumed (kWh pricing). Instead, they have had to charge based on time (per-minute or hourly rates), which can be less fair and less efficient for the driver due to variations in charging speed and vehicle efficiency.
• To address this, by October 2023, nearly all US states except Michigan, Nebraska, Tennessee, and Wisconsin have passed legislation that excludes EV charging station hosts from being considered public utilities. This enables these hosts to implement more equitable kWh-based pricing where customers pay for the actual energy consumed rather than time spent charging. In states without such legislation, operators may be limited to duration-based fees, potentially leading to higher costs or unfair pricing for customers.

2. Pricing Models Allowed

• States that allow kWh pricing enable operators to offer rates typically between $0.20 to $0.60 per kWh, translating roughly into $8-$24 for a full charge depending on charger type (Level 2 vs. DC Fast Charging). This pricing closely aligns with actual energy costs and charging efficiency.
• In contrast, states or operators restricted to time-based billing may charge by the hour or per minute, often $1 to $5 per hour, which can increase the cost because charging slows as the battery fills, yet the timer keeps running. This can make public charging cost up to three times higher than home charging.

3. Requirements on Payment Options and Access

• Certain state laws or funding conditions require public chargers to accept multiple payment options and prohibit mandatory subscription or membership fees, which affects how operators structure their pricing and access. These rules aim to make charging more accessible and transparent but can impact the operational costs that translate into charging fees.

4. Geographic and Utility Differences

• States within certain utility territories may have additional rules. For example, in Tennessee, EV chargers dedicated exclusively to EVs are not considered public utilities within the Tennessee Valley Authority area, potentially affecting how pricing is regulated locally.

5. Transparency and Disclosure

• Regulations often mandate that operators disclose location, voltage, timing restrictions, and other characteristics. While this does not directly affect price, it can influence the availability and usage patterns, indirectly impacting cost efficiency for users.

Summary

State regulations shape public EV charging costs mainly by:

• Determining whether EV charging hosts can charge by kWh or must use time-based fees.
• Defining EV chargers’ public utility status, which dictates rate regulation.
• Requiring multiple payment options and forbidding mandatory fees, influencing pricing structures.
• Varying by region and utility territories that may have unique rules.

These factors result in significant variability in public charging costs across states, with kWh pricing generally leading to more equitable and potentially lower costs for EV drivers compared to duration-based pricing. States with regulatory frameworks supporting kWh billing facilitate more transparent and cost-reflective charging pricing, often translating to lower public charging expenses for consumers.