COMMONWEALTH OF PENNSYLVANIA HOUSE OF REPRESENTATIVES
TRANSPORTATION COMMITTEE PUBLIC HEARING
STATE CAPITOL HARRISBURG, PA
MAIN CAPITOL BUILDING 14 0 MAJORITY CAUCUS ROOM
MONDAY, NOVEMBER 13, 2 017 11:00 A.M.
PRESENTATION ON HB 1446 (QUINN) PENNSYLVANIA CLEAN TRANSPORTATION INFRASTRUCTURE ACT
BEFORE: HONORABLE JOHN TAYLOR, MAJORITY CHAIRMAN HONORABLE KATE HARPER HONORABLE TIM HENNESSEY HONORABLE JOHN A. LAWRENCE HONORABLE MICHAEL PEIFER HONORABLE MARGUERITE QUINN HONORABLE GREG ROTHMAN HONORABLE WILLIAM F. KELLER, DEMOCRATIC CHAIRMAN HONORABLE MARIA P. DONATUCCI HONORABLE STEPHEN KINSEY HONORABLE WILLIAM C. KORTZ II HONORABLE MICHAEL H. SCHLOSSBERG HONORABLE PERRY S. WARREN
Debra B. Miller [email protected] 2
ALSO IN ATTENDANCE: HONORABLE STEPHEN McCARTER
COMMITTEE STAFF PRESENT: ERIC BUGAILE MAJORITY EXECUTIVE DIRECTOR
MEREDITH BIGGICA DEMOCRATIC EXECUTIVE DIRECTOR 3
I N D E X
TESTIFIERS
* * *
NAME PAGE
REPRESENTATIVE MARGUERITE QUINN PRIME SPONSOR OF HOUSE BILL 1446...... 6
ROGER J. COHEN POLICY DIRECTOR, PENNDOT...... 11
CRAIG R. SHUEY CHIEF OPERATING OFFICER, PA TURNPIKE COMMISSION...... 14
GLADYS M. BROWN CHAIRMAN, PA PUBLIC UTILITY COMMISSION...... 18
TANYA J. McCLOSKEY ACTING CONSUMER ADVOCATE, PA OFFICE OF CONSUMER ADVOCATE...... 25
JACK CHRISTENSEN, CFM DIRECTOR OF FACILITIES AND ENERGY MANAGEMENT OPERATIONS, PA TURNPIKE COMMISSION...... 46
TOM BONNER MANAGER OF STATE GOVERNMENT AFFAIRS, PECO...... 64
KEVIN GEORGE MILLER DIRECTOR OF PUBLIC POLICY, CHARGEPOINT...... 92
SCOTT FISHER VICE PRESIDENT OF MARKET DEVELOPMENT, GREENLOTS...... 101
ANDREW DAGA PRESIDENT/CEO, MOMENTUM DYNAMICS CORPORATION... 104
TONY CUSATI DIRECTOR OF REGULATORY AFFAIRS, IGS ENERGY; CHAIR, STATE GAS AND ELECTRIC CAUCUS, RETAIL ENERGY SUPPLY ASSOCIATION...... 128 4
TESTIFIERS (continued):
NAME PAGE
IAN WINNER RESEARCH AND BUSINESS ANALYST, OPTIMUS TECHNOLOGIES...... 132
KEVIN N. STEWART PRESIDENT/CEO, PA MOTOR TRUCK ASSOCIATION...... 135
SUBMITTED WRITTEN TESTIMONY
* * *
See submitted written testimony and handouts online under "Show:" at:
http://www.legis.State.pa.us/cfdocs/Legis/TR/Public/tr finder public action.cfm?tr doc typ=T&billBody=&billTyp=&b illNbr=&hearing month=&hearing day=&hearing year=&NewCommit tee=Transportation&subcommittee=&subj ect=&bill = &new Title=& new salutation=&new first name=&new middle name=&new last n ame=&new suffix=&hearing loc 5
1 P R O C E E D I N G S
2 * * *
3 MAJORITY CHAIRMAN TAYLOR: Good morning,
4 everyone.
5 Good morning, Mr. Chairman.
6 MINORITY CHAIRMAN KELLER: Good morning.
7 MAJORITY CHAIRMAN TAYLOR: I think I'm required
8 to warn everybody that you're being broadcast live on PCN,
9 and from an audio and visual perspective, you're being
10 recorded, and that applies to our Members and our guests
11 and our testifiers. So there must not be anything else
12 going on today, right? Although, this is a very important
13 topic.
14 We're here today to talk about the whole issue
15 of alternative energy for vehicles, and specifically
16 House Bill 1446, introduced by Representative Marguerite
17 Quinn. It is something that this Committee and our
18 Consumer Affairs Committee and the PUC and the driving
19 public in general ought to be concerned about in the very
20 near future. If not, it could be on top of us already.
21 So with that, Mr. Chairman, do you have any
22 comments?
23 MINORITY CHAIRMAN KELLER: No, none at this time,
24 Mr. Chairman. Just get involved in this very important
25 issue. 6
1 MAJORITY CHAIRMAN TAYLOR: I apologize for being
2 a few minutes late. Trying to get out of Philadelphia in
3 the rain is always a pleasure, speaking of transportation
4 modes.
5 But we're going to start out with Representative
6 Quinn. Representative Quinn, as I suggested, is the
7 prime sponsor of House Bill 1446. And Representative
8 Quinn, you can keep your position there as a Member of the
9 Committee or you can join us in the front, however you'd
10 like to do it.
11 REPRESENTATIVE QUINN: I like being able to look
12 at everyone, so I'm going to stay right here, okay?
13 MAJORITY CHAIRMAN TAYLOR: But you won't be able
14 to look at us.
15 REPRESENTATIVE QUINN: You're always in my
16 sights, Mr. Chairman.
17 It's that sideways look.
18 MAJORITY CHAIRMAN TAYLOR: Yeah; not for long.
19 Not for long.
20 REPRESENTATIVE QUINN: Not for long.
21 Well, thank you, Chairman Taylor, Chairman
22 Keller, and thanks, everyone, for being here today.
23 I was thinking of this yesterday as I was doing
24 some driving, and I thought, my gosh, if anyone ever told
25 me that I would be a Member of Pennsylvania's 7
1 Transportation Committee, the House Committee, and that as
2 a Member I would have had the opportunity to drive in an
3 autonomous car, that I would have the opportunity to be
4 part of public hearings and then watch sessions right
5 outside of the LiDAR, reading registration tags and having
6 instantaneous results as to whether or not someone is
7 registered or not, I would have found it hard to believe,
8 and yet here we are, sitting here trying to discuss
9 alternative fuel uses for our car.
10 I mean, I'm one that right now needs a new car,
11 and one of the things I'm taking into consideration is
12 what type of fuel source, you know, not just low mileage,
13 that I'll be looking for. And quite frankly, it's not
14 too appealing to me to look for an electric car or a
15 natural gas-fueled vehicle, because I don't need to be
16 tethered to a 200-mile radius, okay? And I only drive
17 about 20,000 miles a year.
18 So it made me think about, what about all our
19 transportation infrastructure, those people driving our
20 most precious products, our people around, but also
21 products that are coming from the ports, going through all
22 different parts of the Commonwealth to make it to other
23 parts more central in the U.S., and I thought, this is
24 something that we really need to be doing to start to build
25 this infrastructure. 8
1 You know, we are a hub of some really cool
2 technologies going on -- I mentioned a few -- but that's
3 the purpose of this bill right now, is to see what we can
4 do to start to build a clean infrastructure, bring down
5 emissions use, but also capitalize on some homegrown
6 energy.
7 So I appreciate all of you being here today, and
8 I look forward to hearing the testimony and to moving
9 forward as we help fuel Pennsylvania and our drivers in the
10 future.
11 Thank you.
12 MAJORITY CHAIRMAN TAYLOR: Thank you,
13 Representative Quinn.
14 I think at this point -- let me start with
15 Representative Lawrence -- if we could have all the Members
16 in attendance introduce themselves.
17 REPRESENTATIVE LAWRENCE: Thank you,
18 Mr. Chairman.
19 John Lawrence. I serve the 13th Legislative
20 District in southern Chester County and a part of Lancaster
21 County.
22 MAJORITY CHAIRMAN TAYLOR: Steve.
23 REPRESENTATIVE KINSEY: Good morning.
24 Representative Stephen Kinsey from Philadelphia
25 County. 9
1 REPRESENTATIVE ROTHMAN: Representative
2 Greg Rothman, 87th District, Cumberland County.
3 REPRESENTATIVE SCHLOSSBERG: Good morning.
4 Mike Schlossberg, the 132nd District, Lehigh
5 County.
6 REPRESENTATIVE KORTZ: Good morning, everyone.
7 My name is Bill Kortz. I'm from Allegheny
8 County, the 38th Legislative District.
9 REPRESENTATIVE DONATUCCI: Good morning.
10 Maria Donatucci, the 185th District, Philadelphia
11 and Delaware Counties.
12 REPRESENTATIVE HARPER: Kate Harper, Montgomery
13 County.
14 MINORITY CHAIRMAN KELLER: Bill Keller, the
15 184th District, South Philadelphia.
16 MAJORITY CHAIRMAN TAYLOR: And then for the
17 purposes of -- or Representative Warren.
18 REPRESENTATIVE WARREN: Perry Warren from Bucks
19 County.
20 MAJORITY CHAIRMAN TAYLOR: And then why don't
21 Meredith and Eric introduce themselves as well, in case
22 they engage.
23 MS. BIGGICA: Meredith Biggica, Executive
24 Director for Representative Bill Keller.
25 MR. BUGAILE: Eric Bugaile, the Executive 10
1 Director for the Republicans.
2 REPRESENTATIVE QUINN: Marguerite Quinn, the
3 143rd Legislative District, which is Central and Upper Bucks
4 County.
5 REPRESENTATIVE PEIFER: Good morning, Chairman.
6 Mike Peifer, the 139th House District, Pike and
7 Wayne Counties.
8 MAJORITY CHAIRMAN TAYLOR: Anyone else?
9 I'm sure we'll be joined by Members throughout
10 the morning.
11
12 PANEL I:
13 PA STATE AGENCIES
14
15 MAJORITY CHAIRMAN TAYLOR: All right. Our first
16 panel will be from PennDOT. It will be Roger Cohen, who
17 is our Director of Policy; from our Turnpike Commission,
18 Craig Shuey, the Chief Operations Officer; our Public
19 Utility Commissioner, Gladys Brown, who is the Chairperson
20 of that Commission; and the Pennsylvania Consumer Advocate,
21 Tanya McCloskey, who is the Acting Consumer Advocate.
22 Can everybody fit in these spots? Great.
23 And Roger, you're on our list first. We often
24 hear from you about self-driving vehicles, but I'm sure
25 that your testimony on this topic is important as well. 11
1 So if all the testifiers could bring the mic
2 close to them, and we'll go through everyone's testimony.
3 I think it's time-efficient for not only our Members but
4 for all of you as well. We'll go through the testimony,
5 and then we'll have a discussion with Members on the
6 testimony.
7 Roger.
8 MR. COHEN: Good morning, everyone.
9 Thank you, Chairman Taylor, Chairman Keller,
10 Representative Quinn, Members of the Committee.
11 PennDOT appreciates the opportunity to speak to
12 you about some very transformative developments that are
13 occurring in the transportation world, the efforts to bring
14 new fuel sources to propulsion of our vehicles.
15 It's something that PennDOT looks forward to and
16 supports and supports very much the spirit of the
17 legislation that Representative Quinn has authored and
18 sponsored. In particular, I'm going to confine my comments
19 to Section 3 concerning the requirements that PennDOT
20 provide for alternate fuel stations within the rest stops
21 and welcome centers along our interstates.
22 Again, as mentioned, we are very much in support
23 of the spirit of the bill. We have an issue with the
24 provisions of that section in that the Federal Highway
25 Code, Title 23, specifically Section 111, does and has 12
1 historically, since the beginning of the interstates,
2 prohibited the provision of automotive service stations
3 within the right-of-way.
4 Pennsylvania also prohibits the commercial
5 development of limited access right-of-way in Pennsylvania.
6 I'm not going to speak for my colleague from the Turnpike
7 Commission. Craig will explain perfectly well how the bill
8 will affect the Turnpike Commission and the grandfathering,
9 which allows them to proceed.
10 So we did consult with our colleagues at the
11 Federal Highway Administration and tried to see if they had
12 any scope for interpretive, creative interpretation of
13 those provisions, and it appears that they did not give us
14 an answer that would allow us to move forward with those
15 provisions.
16 I would say going forward that the law, as was
17 the spirit of the interstate law when it was first
18 developed, would allow for the provision of alternate fuel
19 stations at the interchanges off of the right-of-way and
20 within corridors, and to that end, PennDOT, with the
21 Department of Environmental Protection and some of our
22 sister agencies, has been working on promoting alternative
23 fuel stations and infrastructure along certain high-volume
24 designated corridors in the Commonwealth, notably Route 80,
25 Route 95, and we are seeking from U.S. DOT other 13
1 designations.
2 What we'll be able to do in those instances is
3 provide signage on the highways where stations can be
4 accessed immediately off of the exit ramps. I think the
5 provision is for a 5-mile range on either side of the
6 right-of-way in order to qualify for those designations,
7 and we have to have a certain number of stations within
8 every so many miles. I don't have the exact numbers. I
9 think it's somewhat in flux in terms of being able to
10 qualify for those designations. This is something that DEP
11 has taken the lead in with PennDOT's assistance and full
12 partnership, so we're excited about that.
13 And we do believe that our public, that Act 88 of
14 2012, our P3 Law, does enable for PennDOT to participate
15 with the private sector in the provision of these stations,
16 off of the right-of-way again, and in fact we have been
17 doing that with our CNG program in 29 transit authorities
18 and facilities around the Commonwealth in which we are
19 using the P3 Law to provide CNG fueling for our transit
20 buses around the Commonwealth and also outside-the-fence
21 fueling for CNG vehicles.
22 So while Federal law would seem to prohibit the
23 very specific provisions provided in Section 3 of the
24 legislation, we are optimistic that with a good bit of
25 creative tinkering, that we'll be able to get there and 14
1 work toward providing this important opportunity for
2 alternative fuel vehicles to move forward.
3 Thank you.
4 MAJORITY CHAIRMAN TAYLOR: Thank you, Roger. I
5 know there will be some questions for you about the Federal
6 situation.
7 But we'll go on to Craig Shuey, our Chief
8 Operations Officer from the Pennsylvania Turnpike
9 Commission.
10 MR. SHUEY: Thank you, Mr. Chairman.
11 Thank you, folks, for having us in today on
12 behalf of my Commission. I appreciate having the
13 opportunity to talk with you about our efforts regarding
14 alternative fuels.
15 Starting in 2011, the Turnpike Commission began
16 having a conversation about electrification along the
17 roadway in terms of being able to provide that service, and
18 we looked at the model that we use now. We don't provide
19 fuel to the customers along the turnpike. That's done by a
20 third party. In this case, in our case, it's Sunoco who
21 provides that fuel opportunity. And so we felt like we
22 didn't want to own equipment and own that opportunity but
23 wanted to help foster that opportunity.
24 So in conjunction with DEP, we began the process
25 of working with them on a grant, an AFIG grant, and the 15
1 AFIG grant was for about a million, or was for $1 million
2 that went to Car Charging Group, which is now Blink
3 Charging.
4 And we started on that endeavor across the system
5 and have -- we put in about, we put in 500,000, which was
6 just our feed, our seed money to provide the base, the
7 infrastructure getting up to the charging unit, which we
8 felt was our role. Similar to the service plazas
9 themselves, we provide the platform and we let the private
10 sector who works in this space maintain and operate those
11 facilities.
12 So we began working across the system to put
13 those charging facilities in locations, and we now have
14 them at Bowmansville, we have them at King of Prussia and
15 Peter J. Camiel, the facilities in the eastern part of the
16 State, as well as at Oakmont and New Stanton. In
17 New Stanton, we also have a CNG facility.
18 So we started that process. We got that far with
19 it. We have worked with Car Charging Group to continue.
20 They have run into some issues with being able to expand
21 the infrastructure. They are still maintaining and
22 operating those systems, but they're not able to commit to
23 putting in the additional infrastructure across the system.
24 So while we have those five that are operating,
25 we have six facilities at both North and South Somerset, 16
1 North and South Midway, Highspire, and Valley Forge that
2 are all infrastructure ready. So all of the cabling and
3 mechanisms that need to be put in place in order to start a
4 car-charging operation have been put in place.
5 Simultaneous to that, we embarked on
6 opportunities for CNG. A focus there was the fleet
7 operations. UPS and several other shippers have begun
8 making a significant investment in a CNG opportunity, so we
9 worked with them to try to determine where the best
10 locations were for us and then tried to match that up with
11 the availability of natural gas in a quantity that would be
12 useful to putting in a pumping station for that purpose.
13 We did achieve one location, at the New Stanton
14 Service Plaza, which is the only one we have yet operated.
15 We ran into some issues with King of Prussia that made it
16 difficult to continue on that avenue. But the beauty of
17 the New Stanton facility is it is one that has a
18 public-facing unit on the outside of the service plaza, so
19 somebody can come up and fuel from the outside without
20 having to come on the turnpike.
21 So that's where we have come. The issues that
22 surround the Car Charging Group, or Blink, and where
23 they're going to be able to take us from here are still
24 being evaluated, so we don't have any, at this point, solid
25 plans to roll out across the rest of the system. We're 17
1 going to continue to work on grant opportunities and other
2 assistance that might help make this possible, and we're
3 very willing to work with the Legislature in terms of
4 trying to find a way to achieve this.
5 Like I said at the beginning, we value the model
6 we use, which has a public-private partnership element to
7 it, which I think is helpful in that it doesn't deter us
8 from our core mission of running our roadway but still
9 provides that opportunity for the general public to begin
10 using alternative methods of fueling for their vehicles.
11 Just as a way of understanding the volumes, we
12 had 454 charges on the entire system last year. So that
13 means 454 people plugged in and used those facilities
14 across the system in the year. By comparison, we'll have
15 4,000 to 8,000 fuels of passenger gasoline vehicles in a
16 month at most of our locations. So there's a huge
17 difference in terms of the utilization, and obviously
18 that's reflective of the need to have more of this
19 infrastructure available to see more fuel, more EV-fueled
20 vehicles starting to sell and thus becoming a large part of
21 the fleet.
22 That's sort of the landscape from our point of
23 view. We don't have the restrictions that Roger mentioned
24 with regard to this because of the way our service plazas
25 were rolled into the interstate system prior to the 18
1 legislation that created it in the fifties. So we don't
2 have those same types of restrictions. We do have a good
3 platform for alternative fuels. The methodology and how we
4 get there and when we get there I think are things that we
5 want to continue to have a discussion on.
6 Thank you.
7 MAJORITY CHAIRMAN TAYLOR: Thank you, Craig.
8 We have been also joined by Representative
9 Steve McCarter, who is here to observe. And Chairman
10 Tim Hennessey has joined us as a Member of the Committee.
11 And next, Commissioner, how are you?
12 PUC CHAIRMAN BROWN: Good morning. How are you?
13 MAJORITY CHAIRMAN TAYLOR: We have the Chair of
14 our Public Utility Commission, Gladys Brown.
15 Chairman, thank you.
16 PUC CHAIRMAN BROWN: Chairman Taylor, Chairman
17 Keller, good morning, and thank you to also the Members of
18 the House Transportation Committee. We appreciate this
19 opportunity as a Commission to come and testify here today
20 to provide you our reading of the bill, House Bill 1446.
21 As you know, or as you may not know -- I believe
22 that we just submitted our copy of the testimony to you in
23 advance, so you do know that our position on this bill is a
24 neutral position, but we wanted to make sure that we just
25 provide you some technical background in terms of how we 19
1 read the bill and view it.
2 We believe it's valuable to consider policies
3 that can prudently foster the State's electric vehicle and
4 natural gas vehicle markets. Such endeavors are worthwhile
5 in the area of technological evolution. The rollout of
6 advanced meters by our electric distribution companies and
7 increased investment in distributed generation by end-use
8 electricity customers make EVs an appropriate and
9 complimentary consideration for policymakers. Likewise,
10 increasing production of competitively priced natural gas
11 in the Commonwealth makes natural gas vehicles a worthwhile
12 discussion for policymaker consideration as well.
13 So I really wanted to get into the gist of our
14 conversation that we wanted to provide to you today in
15 terms of House Bill 1446. So we broke it down to different
16 areas, the first being the development of a plan review
17 timeline. So we always look at any bill that would provide
18 a requirement under the PUC and the appropriate challenge
19 to be able to address everything, and we want to make sure
20 we have the appropriate timeline as a Commission to walk
21 through all the regulatory and administrative processes.
22 And so with the 180-day approval timeline for the
23 Commission approval, we do think it's appropriate. Any
24 shorter timeline risks challenging the Commission's ability
25 to thoroughly review and consider development plans while 20
1 also affording all interested stakeholders the proper due
2 process.
3 Another thing we looked at is the voluntary
4 deployment plans. So the Commission believes it is prudent
5 to permit our electric distribution companies who are not
6 otherwise required to file a development plan under this
7 bill to voluntarily file plans for Commission review. Such
8 provision in the bill will permit participation from
9 utilities who may choose to be proactive in this area in
10 terms of the electric vehicle landscape, even though they
11 do not service urban territories. And we know a lot of the
12 focus on the bill is focusing more on the urban areas as
13 well as some of the larger suburban areas.
14 Another thing we wanted to talk about is the
15 utilization of time-of-use rates, and as we get into the
16 deployment of our smart meters throughout the Commonwealth,
17 this is becoming something that is more and more available
18 to consumers. We commend you for including utilization of
19 time-of-use rates in an effort to appropriately incent
20 EV charging. This can help to reduce or offset peak demand
21 while also increasing distribution system capacity
22 utilization.
23 For distribution rates, time-of-use offerings can
24 be designed solely by an electric distribution company.
25 However, for generation rates, the electric distribution 21
1 company must contract with a third-party wholesale
2 generator or permit an electric generation supplier to
3 provide this component. This is the case since EDCs no
4 longer own generation because of our electric competition
5 act, consistent with Chapter 28 of our PUC Code.
6 Determining the appropriate design for
7 statutorily required time-of-use rates is a challenge for
8 the generation component of electric service. The General
9 Assembly may want to consider the utilization of electric
10 generation suppliers for this role as well, while having
11 EDCs provide this service if no electric generation
12 supplier is able to participate.
13 So what I'm really saying in this section here is
14 to make sure that you have either the EDCs or the EGSs be
15 able to provide time-of-use rates.
16 Ownership of electric vehicle charging
17 stations:
18 Presently, EDCs only own and operate charging
19 stations necessary for their own vehicle fleets. Some of
20 these stations are open to public access, but this access
21 is provided as an incidental benefit. House Bill 1446
22 would permit EDCs to own and operate public charging
23 stations as an exclusive business venture. So this
24 deviates from Pennsylvania's current marketplace design,
25 which leaves investment, ownership, and operation of public 22
1 EV charging in the hands of unregulated private enterprises
2 such as third-party charging stations.
3 The Commission does recognize that House Bill
4 1446's language also permits third-party charging station
5 owners. Nonetheless, the bill does not mandate this.
6 Therefore, it may be prudent to consider limiting the
7 number of stations or market shares an EDC may own and
8 operate in an effort to sustain continued investment from
9 unregulated private enterprises.
10 So in other areas, getting into the cost/benefit
11 test:
12 The bill permit EDCs to recover all reasonable
13 and prudent costs incurred for regional roadmap and
14 development plans, infrastructure, and education.
15 Requiring a reasonableness test is a positive customer
16 protection, particularly when it comes to the regional
17 roadmap, development plan, and education costs.
18 However, the Commission notes that a more
19 stringent cost/benefit test should be considered for
20 infrastructure investments, especially those made for a
21 charging station. A cost/benefit test such as the total
22 resource cost test may be prudent to utilize for these
23 development plans.
24 From a strictly economic view, such a test will
25 help to level the playing field between the EDC owned and 23
1 operated charging stations and the third-party owned and
2 operated stations. So further, this would help to protect
3 utility ratepayers from incurring uneconomic costs.
4 Finally, I just want to focus on ratepayer
5 equity:
6 So as written in the bill, the bill does not
7 detail if costs incurred are to be recovered from all
8 utility rate classes. For instance, are the costs only to
9 be borne by residential customers or are they to be borne
10 by all customers, including commercial and industrial
11 customers? So given the utilization of transportation by
12 individuals and businesses, the Commission believes that in
13 the interests of equity, it may be best served by
14 permitting recovery of costs from all rate classes that
15 receive a benefit from the development plan.
16 Further, there are geographic equity issues that
17 the Commission wishes to draw attention to. Utilities such
18 as PECO Energy and Duquesne Light serve predominantly urban
19 territories. Therefore, any costs rolled into rates by
20 these utilities under the bill also will provide all other
21 customers some form of value through increased access to
22 charging stations, education, and other potential deemed
23 benefits.
24 However, there may be a lack of equity if
25 traditional socialized rate design is used for utilities 24
1 which serve more territories that are qualifying under this
2 bill that do not necessarily have -- they're not larger in
3 terms of population.
4 For instance, PPL Electric Utilities and
5 Metropolitan Edison Company both serve urban areas, but
6 they also serve rural counties. Therefore, customers in
7 their rural county may receive minimal benefits of it, but
8 they're still going to be rolled into their costs. So
9 that's a concern to look at.
10 We believe that it would be prudent for the
11 General Assembly to consider novel ratemaking concepts to
12 avoid this type of inequity. For instance, permitting the
13 use of a rider based on customer locations in relation to
14 priority counties to be used or a subclass of distribution
15 rates could be considered as well.
16 So I wanted to focus on our concerns as we read
17 the bill, but as we stated before, we are neutral on the
18 bill. We just wanted to make sure that we provided you
19 with some of our observations as we move forward with the
20 legislation.
21 MAJORITY CHAIRMAN TAYLOR: Thank you,
22 Commissioner.
23 Next, we'll hear from our Pennsylvania Consumer
24 Advocate, or Acting Consumer Advocate, Tanya McCloskey.
25 Tanya. 25
1 ACTING CONSUMER ADVOCATE McCLOSKEY: Thank you,
2 Chairman Taylor, Chairman Keller, and Members of the
3 Committee.
4 Thank you for inviting me to give comments before
5 this Committee regarding House Bill 1446. I have provided
6 written testimony and will try to just hit a few key points
7 from that written testimony. This is a timely and
8 important topic, as the number of electric vehicles in
9 Pennsylvania has steadily increased.
10 Let me first briefly introduce the Members of the
11 Committee to the Pennsylvania Office of Consumer Advocate.
12 The OCA was established by the General Assembly in 1976 to
13 represent the interests of public utility consumers in
14 matters before the Pennsylvania Public Utility Commission,
15 similar Federal agencies, as well as State and Federal
16 courts.
17 The OCA also serves as a resource to the
18 Members of the General Assembly by responding to
19 constituent concerns and by providing our views on how
20 proposed legislation would affect the interests of
21 Pennsylvania consumers. We have worked with Members and
22 staff of various committees in addressing public utility
23 matters, and we look forward to working with you as you
24 address the complex and difficult utility issues that come
25 before you. 26
1 House Bill 1446 raises an important issue
2 regarding the approach to fostering the development of a
3 market for electric vehicle charging stations. As the
4 number of electric vehicles increases across Pennsylvania
5 and the country and EVs are used for more transportation
6 needs, the demand for EV charging stations will also
7 continue to grow.
8 There are two basic components associated with
9 EV charging stations. The first component is the
10 distribution system grid that brings the electricity to the
11 EV charging station location. This is a monopoly function
12 that generally must be provided by the utility that serves
13 the area in which the station is located.
14 The second component is the EV charging equipment
15 that provides the charging service. The EV charging
16 station equipment is not a monopoly function and need not
17 be provided by utilities.
18 As Chairman Brown noted, there is a third
19 component, which is the generation service that is the
20 electricity that powers the EV charging station equipment,
21 and that is subject to a retail competitive choice market
22 in Pennsylvania.
23 EV charging stations operate for the sole purpose
24 of providing electricity as a transportation fuel. A
25 public EV charging station provides transportation fuel to 27
1 the mobile transportation public, many of whom may be from
2 another State, another country, or another EDC service
3 territory.
4 EV charging stations may also be located in a
5 nonpublic manner to serve the needs of a limited group of
6 EV owners, such as in multi-unit residential buildings.
7 I support the development of infrastructure to
8 support EV charging stations, but I have concerns with the
9 structure of House Bill 1446, particularly with the
10 responsibility assigned to public utilities and the
11 resulting costs that will be borne by utilities'
12 ratepayers.
13 I'm also concerned that the approach in
14 House Bill 1446 that allows the public utility to enter the
15 transportation fueling business and receive monopoly
16 ratemaking treatment for the associated costs from
17 ratepayers could limit the development of a competitive
18 EV charging market.
19 As I read House Bill 1446, the responsibility for
20 developing a transportation infrastructure regional
21 framework as it concerns electric vehicle charging rests
22 with the electric distribution companies serving the
23 counties identified as priority alternative transportation
24 infrastructure. I agree that our electric distribution
25 utilities will need to participate in any study that is 28
1 conducted.
2 The development of a regional framework, however,
3 seems to be outside of the distribution utility's core
4 function of providing safe, adequate, and reliable electric
5 service to the customers in its service territory.
6 Also, requiring electric distribution companies
7 to complete such a comprehensive study will result in the
8 electric utility ratepayers bearing the cost of such
9 effort. It is not clear why the development of a study to
10 benefit EV owners and the EV charging market should be
11 borne by captive ratepayers of a utility.
12 The second major concern that I would like to
13 identify is allowing the regulated electric distribution
14 utility to own electric vehicle charging stations and
15 recover the costs of that ownership from captive
16 ratepayers, including a rate of return or a profit margin.
17 House Bill 1446 appears to assume that the utility will
18 have a role in the charging service. In my view, that is
19 not a foregone conclusion, and we should not sanction that
20 at this time.
21 The business of developing and siting EV charging
22 stations is a competitive business. Utility-owned charging
23 stations, subsidized by ratepayers, would be competing with
24 unregulated companies that must assume all of the risk of
25 the business and recover all of the costs through the 29
1 provision of the EV charging service. The risk of this
2 business can be significant, particularly with technology
3 that is rapidly changing and developing. The regulatory
4 model used in House Bill 1446 would place this risk on the
5 captive ratepayers of the utility rather than on the
6 unregulated businesses operating in a competitive market.
7 It will be difficult for a third-party provider
8 of an EV charging service to compete and bring innovation
9 under such a structure. At the same time, ratepayers will
10 be left to pay the costs of a program that will benefit
11 EV owners but seems to provide no direct benefit to the
12 ratepayers.
13 The final point that I would like to raise is a
14 concern with the potential for competing needs for utility
15 infrastructure dollars.
16 Our electric distribution companies and our
17 natural gas distribution companies are engaged in
18 significant infrastructure repair and replacement programs.
19 It will be important to the safety and reliability of our
20 utility systems that these efforts continue in the
21 accelerated fashion now approved by the Pennsylvania Public
22 Utility Commission. Involving our regulated utilities in
23 areas outside of the core mission of providing safe,
24 adequate, and reliable service to all customers, and
25 possibly redirecting ratepayer dollars to these other 30
1 efforts, should not be done at the expense of the quality
2 of service that utility ratepayers should receive.
3 Thank you again for inviting me to testify, and
4 I look forward to answering any questions you may have.
5 MAJORITY CHAIRMAN TAYLOR: Thank you, Tanya.
6 I'm just going to start by going back to Roger
7 and posing one question. Then I'll turn it over to
8 Chairman Keller and then to Representative Quinn and then
9 to every other Member, in that order.
10 But Roger, can you go back, I know we may be in
11 a position to ask for an exemption from the Federal
12 Government on that, but can you go into some definitions,
13 just for the sake of our audience as well, of "service
14 area" versus "rest area" versus, you know--
15 MR. COHEN: Okay.
16 MAJORITY CHAIRMAN TAYLOR: ---the actual
17 definitions of "right-of-way" and things and why that's
18 prohibited. Because I think many of us are thinking, at
19 least I was initially, of a rest area being a service
20 station. And we have all those services there; how could
21 that be prohibited? So if you could just distinguish that
22 for us.
23 MR. COHEN: Yeah. Our -- and thank you, Chairman
24 Taylor.
25 Our rest areas and welcome centers -- of which we 31
1 have, I believe, 35 rest areas in the Commonwealth;
2 12 welcome centers that are around the perimeter, near
3 State lines, obviously, gateways into the Commonwealth -
4 almost all of them are on the interstates. There are a few
5 that are on the national highways, such as U.S. 15 down in,
6 I believe, Cumberland County, and U.S. 6 up in the north.
7 So the definitions there are, you know, the
8 rest areas are generally without -- they are allowed to
9 provide for certain services such as vending machines,
10 other small-item commercial facilities, like media.
11 Communication sponsorships are allowed to be provided for
12 at those facilities. Obviously, restroom facilities are
13 there.
14 And to some extent, those have been -- that has
15 expanded over time, but very narrowly. We did inquire with
16 our colleagues at the Federal Highway Administration, the
17 Pennsylvania Administration down the street, whether there
18 was any opportunity to stretch the definition of "service
19 station," which is expressly prohibited, and regrettably
20 did not receive feedback which would indicate that we could
21 do so. And it is written into statute, so it would take an
22 act of Congress to amend that.
23 And it does date back to, as Craig had mentioned,
24 to the very earliest origins of the interstate highway
25 system when, as this dramatic expansion of our 32
1 infrastructure in the mid-fifties was being contemplated,
2 something of a hue and cry from the mom-and-pop providers
3 of certain roadside services up and down highway corridors
4 and towns throughout the nation really necessitated a
5 response in order to ensure that they weren't going to be
6 bypassed and wiped out commercially by the establishment of
7 this infrastructure. That's the origins of the
8 prohibition.
9 It has not changed efforts over the years to try
10 to loosen it. It has resulted in some minor opportunities,
11 as I have said, but not anything that appears at this time
12 would encompass the kinds of services that are contemplated
13 in 144 6.
14 And by "right-of-way," of course I'm talking
15 about limited access right-of-way. So those are the
16 properties, the corridor and the properties owned by and
17 operated by PennDOT across the Commonwealth.
18 MAJORITY CHAIRMAN TAYLOR: Craig, do you have
19 anything to add to that?
20 MR. SHUEY: No. I think he accurately described
21 what the situation is.
22 Our system we operate is different for that very
23 reason, as it was built before the interstate system and,
24 you know, at the time wasn't the biggest concern in terms
25 of rolling out the roadway. But afterwards, I think you 33
1 saw that concern by others who wanted to operate
2 commercially outside of the roadway, and, you know, that
3 has been a provision ever since, so.
4 MAJORITY CHAIRMAN TAYLOR: Chairman Keller.
5 MINORITY CHAIRMAN KELLER: Thank you,
6 Mr. Chairman.
7 Craig and Roger, it's my understanding that the
8 only reason this bill is before the Transportation
9 Committee is because that one section is a Title 74, what
10 we're talking about, and that's why it's here. But if I
11 understand correctly, you're saying that the Federal
12 Government, this is in opposition to what the Federal
13 Government tells us you must do, that you're not allowed to
14 do these things.
15 MR. SHUEY: Yeah. PennDOT is not allowed to do
16 them. The turnpike still is, so.
17 MR. COHEN: On the basis of their grandfathered
18 privilege.
19 MINORITY CHAIRMAN KELLER: Okay.
20 So, PennDOT. So if we had to remove that
21 section, Mr. Chairman, to make this conform with the
22 Federal Government, if we remove Title 74, this is all a
23 Title 66 bill, I believe, and you're saying that it would
24 take an act of Congress for you guys to get an exemption to
25 conform to this bill. 34
1 MR. COHEN: That's our understanding in
2 discussions with the Federal Highway Administration and the
3 view of our chief counsel.
4 MINORITY CHAIRMAN KELLER: Okay. So I think
5 that's a big problem in this bill, is that -- especially
6 the one section that concerns transportation.
7 Craig, one question about, you have electric
8 filling stations there now. How has that affected your
9 P3 agreement with Sunoco? Has it had any affect on it?
10 MR. SHUEY: We negotiated that with them, but it
11 was not -- it didn't change the agreement. We didn't pay
12 them more, they didn't pay us more in order to accomplish
13 that.
14 The agreement and the arrangement works by virtue
15 of parties coming to agreement on things, and---
16 MINORITY CHAIRMAN KELLER: But you had to go and
17 sit down with them and come to an agreement.
18 MR. SHUEY: We did.
19 Especially on the CNG facility, which ultimately
20 was operated by Sunoco.
21 MINORITY CHAIRMAN KELLER: Okay.
22 The one thing we have learned on this Committee
23 is we are very bad at collecting the electric charging
24 stations' taxes.
25 MR. SHUEY: Mm-hmm. Yes. 35
1 MINORITY CHAIRMAN KELLER: In fact, we have had
2 testimony that the Revenue Department has only collected a
3 thousand dollars last year. And I think all, if not most
4 of it, comes from Hersheypark. It seems to be they're the
5 only people that are paying their taxes when it comes to
6 electric fueling.
7 How is the tax -- because I'm not sure who is
8 responsible in this bill to collect and pay the tax. How
9 do you do it on the turnpike, Craig?
10 MR. SHUEY: That's a good question, one that I
11 hadn't anticipated, so I'll have to get back to you on that
12 one.
13 MINORITY CHAIRMAN KELLER: Thank you, Meredith.
14 All right. So you don't know if the
15 provider---
16 MAJORITY CHAIRMAN TAYLOR: You stumped the
17 testifier. You nailed it.
18 MINORITY CHAIRMAN KELLER: You don't know if the
19 provider or---
20 MR. SHUEY: I don't know offhand. There's
21 probably somebody in the room who does, but we'll---
22 MINORITY CHAIRMAN KELLER: All right. You'll get
23 back to the Chairman on that?
24 MR. SHUEY: We'll get back to you.
25 MINORITY CHAIRMAN KELLER: All right. 36
1 MR. COHEN: Chairman Keller, if I may, I know
2 that the Revenue Department has been working to try to
3 figure out some ways to improve collection on that tax, and
4 we have been in discussions with them about trying to
5 identify through registration, you know, which of our
6 electric vehicles are. And I think Revenue has been trying
7 to develop the appropriate proxy fee to ensure that, you
8 know, it approximates what the motor fuels tax would be for
9 those vehicles.
10 We are in the midst of upgrading our database for
11 vehicle registrations. That is expected to be completed, I
12 believe in 2021, and I think we'll have a better handle at
13 that point on being able to at least identify all the
14 electric vehicles in the Commonwealth and hopefully
15 ensuring that they are indeed paying that fee.
16 It's a very small number of vehicles. It's in
17 the thousands, with 12 million vehicles registered in the
18 Commonwealth.
19 MINORITY CHAIRMAN KELLER: I agree. It's a very
20 small number now---
21 MR. COHEN: It's growing.
22 MINORITY CHAIRMAN KELLER: ---but as we go into
23 the future.
24 And as everybody on this Committee knows, I stand
25 up every time I can and talk about the motor licensing 37
1 fund, how we have to protect it. And that's how we, that's
2 how we pay for our highways and bridges now, and if we're
3 going to lose revenue in that and not collect it on the
4 alternative fuels, we'll be in trouble.
5 And Gladys, that brings me to your question.
6 PUC CHAIRMAN BROWN: Okay. I almost thought I
7 was going to escape that.
8 MINORITY CHAIRMAN KELLER: No, no. You know I'm
9 always glad to see you.
10 The way we pay for the highways and bridges now,
11 which is, you know, our core function, is through the
12 Oil Company Franchise Tax, the registration fees, licensing
13 fees, and titling fees. That is all people who use our
14 highways, and they pay for it, the highways and bridges and
15 the maintenance of them, through these fees, and it's
16 people who use it. Is it my understanding that your
17 testimony is that the PUC thinks that all ratepayers should
18 pay for the electric charging stations for their
19 alternative fuels, not just the people who are using it?
20 PUC CHAIRMAN BROWN: Well, there's no designation
21 in the bill, as we read it, whether it's a particular
22 customer class. So we believe it should be across all
23 customer classes.
24 Many times you'll see something where it's just a
25 residential customer class or it's the commercial customer 38
1 class or the industrial customer class. We think it should
2 be across all the customer classes, but also limited to
3 those that are going to have more access to it -- when our
4 companies are coming in for the plans.
5 So as I gave the example for, you know, a company
6 such as PPL or First Energy that has -- in some other
7 distribution area, they'll have a bigger urban area, and
8 then in another part of it they'll have a rural area that
9 may not have the benefit or people may not want to use it
10 as much.
11 So if you're going to spread it across the
12 customer class, there we're asking for you to have some
13 type of ability where we can balance it so it's not where
14 only the urban-area customers are getting the benefit of it
15 but everyone has to pay for it.
16 MINORITY CHAIRMAN KELLER: But my point is,
17 that's a radical change on how we fund our highways and
18 bridges today.
19 Today, people pay through the Oil Company
20 Franchise Tax, through the fees. The people who are using
21 pay through their, you know, the purchasing of fuels, they
22 pay for the highways that they use. That would be a big
23 change on how we fund, how we fund our highways and
24 bridges. I just don't know if that's -- if regular people
25 would be happy, as the Consumer Advocate would say. 39
1 PUC CHAIRMAN BROWN: But I think that's
2 important, this is important why we're having this
3 discussion, so that you can understand how we at the
4 Commission approve tariff rates and plans where an electric
5 or utility company comes in to us. So it's important to
6 have this dialogue and understanding, because we're only
7 answering it based upon how we normally approve rates, and
8 you're coming from the point of view of the Transportation
9 Committee.
10 MINORITY CHAIRMAN KELLER: Which is my point.
11 PUC CHAIRMAN BROWN: Right?
12 MINORITY CHAIRMAN KELLER: This is really a
13 Title 66 bill.
14 PUC CHAIRMAN BROWN: Right.
15 MINORITY CHAIRMAN KELLER: Okay. Thank you.
16 Thank you to all the testifiers.
17 Thank you, Mr. Chairman.
18 MAJORITY CHAIRMAN TAYLOR: Are you trying to give
19 us less work or more?
20 But to add to Representative Keller's, or
21 Chairman Keller's discussion, I mean, we do have an
22 alternative fuels bill in our Committee that deals with
23 taxation of those alternatives, and it may be a prudent
24 time to have that discussion, along with this legislation
25 as well. 40
1 Representative Quinn.
2 REPRESENTATIVE QUINN: Thanks, Mr. Chairman.
3 Roger, we have just heard from you that it would
4 literally take an act of Congress to make these changes so
5 we could implement this bill as I had in mind.
6 It has been brought to my attention that just
7 last week, I think it was Friday, the Governor from Arizona
8 was petitioning the U.S. Department of Transportation in
9 trying to get some relief on some of the Federal
10 requirements. Are you familiar with that?
11 MR. COHEN: That's not -- I'm not aware of that,
12 Representative Quinn, but we certainly will, we will
13 explore it further and we will consult through AASHTO, the
14 national association of State Transportation Departments,
15 if there is any concerted effort to get that kind of
16 relief.
17 I think as Chairman Keller indicated, the growth
18 of the fleet of alternative fuel vehicles sort of warrants
19 some relook at these prohibitions. But, you know, if there
20 is that move on the State level from our peer States, we
21 would certainly explore joining something like that in
22 trying to advance it.
23 REPRESENTATIVE QUINN: Thank you, because it
24 would just seem to make common sense to me, as we have
25 seen, you know, this evolution come about, that other 41
1 States are going to be looking at the same thing, and, you
2 know, a concerted effort would be helpful down there.
3 MR. COHEN: Well, I'm happy to make an inquiry
4 through AASHTO and report back to you on that.
5 REPRESENTATIVE QUINN: Thank you very much.
6 And Craig, you listed some areas along the
7 turnpike where you have some charging stations.
8 MR. SHUEY: We did; yeah.
9 REPRESENTATIVE QUINN: Is it like a charging
10 station at one of these or several?
11 MR. SHUEY: Usually it's one location that the
12 vehicle can plug into at a time.
13 REPRESENTATIVE QUINN: How long do you see the
14 vehicle, what's the typical, for those 453 stops last
15 year---
16 MR. SHUEY: Right.
17 REPRESENTATIVE QUINN: ---how long is the car
18 typically there?
19 MR. SHUEY: So we have two levels of charging:
20 Level 2, which is, you know, it's a 4-hour-plus charge to
21 go from zero to a full charge. Level 3 we have at all the
22 facilities as well, and that's a fast charge, and that can
23 charge within about a half an hour.
24 But understand that when we rolled this out in
25 ' 11, there was still some level of, let's say disagreement 42
1 or confusion within the industry as to what types of
2 charging was going to work at each location, and so we were
3 required to put both types in.
4 There are also some adapters. Tesla vehicles use
5 a different piece of equipment than other charging systems
6 do, so we tried to prepare for that as well.
7 But it's about a half hour if you're going to go
8 from a Level 2 full charge, and, you know, that is what I
9 would assume someone is sitting there to get done.
10 REPRESENTATIVE QUINN: Assume you're going to go
11 continue with the build-out, does your data provide
12 information as to which level you're going to go with?
13 It would seem to me that, you know, not everyone
14 is bringing a book for the 4-hour charge, that they're
15 going to do that overnight at their own home. They're
16 going to go for the half an hour and get on their way.
17 MR. SHUEY: That's where we see the most need,
18 but I assume there are some reasons within the industry to
19 maintain that Level 2 as well.
20 REPRESENTATIVE QUINN: Do you have a price-point
21 difference for the 4 hour versus the half an hour?
22 MR. SHUEY: Not offhand, no. I can get you that
23 information.
24 REPRESENTATIVE QUINN: I'm just curious if you're
25 paying the premium to just get out of there in a half an 43
1 hour or how it's handled like that.
2 Assuming you're going to continue with the
3 build-out, do you have a timeframe for that?
4 MR. SHUEY: We don't have a timeframe at this
5 point, because the company we have been working with
6 doesn't have the financial wherewithal to continue forward.
7 So until a replacement becomes apparent, it's going to be
8 difficult to lay out a timeline for when that might occur.
9 We are, as I had said, we are pursuing,
10 continuing to pursue grant opportunities that might help
11 that. DEP has been a great partner with us in trying to
12 help line up, you know, companies to continue on that
13 space.
14 So I think it's a good possibility that that will
15 continue, but it has yet to be fully determined.
16 REPRESENTATIVE QUINN: And that was the
17 Car Charging Group?
18 MR. SHUEY: Um, yes. It's now Blink.
19 REPRESENTATIVE QUINN: Blink.
20 MR. SHUEY: Blink is who we are using right now.
21 REPRESENTATIVE QUINN: Okay.
22 MR. SHUEY: It's just like that.
23 REPRESENTATIVE QUINN: Just like that.
24 So it sounds to me that it's a combination of
25 just not having the demand right now as well as their 44
1 financial troubles, which could be tied into the lack of
2 demand as well.
3 MR. SHUEY: Yeah, I think that's part of it.
4 As we all know, this is all very chicken and egg
5 kind of stuff in terms of trying to figure out where, how
6 to make the investments, and as consumers, as you laid out
7 at the beginning of this, you know, trying to make that
8 decision as to whether you want to be, you know, on the
9 cutting edge of picking a vehicle that has limited fueling
10 opportunities.
11 So I think we'll start to see that move a little
12 bit faster. All the major manufacturers are putting out
13 vehicles in this space, and it is starting to grow. But as
14 you can imagine, the fleet takes quite a while to turn
15 over, and there will be a good bit of lag in terms of real
16 volume.
17 But again, we have done what we can in terms of
18 making an investment on our end to put the infrastructure
19 in place, and as time and opportunities become available,
20 we'll continue with it.
21 REPRESENTATIVE QUINN: Are any of the Turnpike's
22 vehicles electric charged---
23 MR. SHUEY: No.
24 REPRESENTATIVE QUINN: ---or natural gas charged
25 right now? 45
1 MR. SHUEY: They are not.
2 We did have a few natural gas vehicles in the
3 fleet. The initial ones that we had, we had one on a
4 long-term lease that we had to turn back in, and we had one
5 that was a dump truck that we had leased, and it had some
6 issues with the overall power and the ability to push snow
7 in a fully loaded classification. So we're still
8 reevaluating whether to make more investments in that
9 place.
10 REPRESENTATIVE QUINN: Were they early models?
11 MR. SHUEY: Of course. Yeah. I mean, everything
12 is right now pretty much an early model.
13 REPRESENTATIVE QUINN: Okay.
14 MR. SHUEY: But the EVs that we looked at just
15 didn't serve the linear corridor of the turnpike all that
16 terribly well. You know, our vehicles drive far distances
17 and, you know, sometimes aren't in the same location at the
18 end of the evening. So we didn't find a lot of fleet
19 vehicles that so far met the needs that we have.
20 REPRESENTATIVE QUINN: Thank you.
21 MR. SHUEY: Mm-hmm.
22 REPRESENTATIVE QUINN: That concludes my
23 questions.
24 MAJORITY CHAIRMAN TAYLOR: Representative Kortz.
25 REPRESENTATIVE KORTZ: Thank you, Mr. Chairman, 46
1 and thank you all for your testimony today.
2 Mr. Shuey, Blink Charging Company, you had
3 mentioned that is who put them in.
4 MR. SHUEY: Yeah.
5 REPRESENTATIVE KORTZ: Are there other companies
6 out there that can do this besides them?
7 MR. SHUEY: I am certain that there are, yes.
8 REPRESENTATIVE KORTZ: Have you reached out to
9 them to see if they can pursue this?
10 MR. SHUEY: That's part of that process that I
11 mentioned with DEP. We have been continuing to try to have
12 that conversation and line that up.
13 REPRESENTATIVE KORTZ: Okay.
14 I'm just curious: What's the cost associated
15 with trying to put one of these stations in? You had
16 mentioned there is no EV infrastructure at Sideling Hill,
17 Blue Mountain, Cumberland Valley, Lawn, and Allentown.
18 Anticipated costs of what it would be to put one of these
19 in?
20 MR. SHUEY: Jack, do you have a guess?
21 MR. CHRISTENSEN: The infrastructure side costs
22 us about 30,000, and the chargers that were installed
23 previously on the pike were about 55,000 to 60,000 apiece,
24 depending on the location and some infrastructure needs
25 associated with that. 47
1 MR. SHUEY: So probably all in for a single
2 location, a little over $100,000.
3 REPRESENTATIVE KORTZ: A little over 100,000.
4 MR. SHUEY: Yeah.
5 REPRESENTATIVE KORTZ: Okay. Very good.
6 Mr. Cohen, a question for you, sir.
7 In anticipation of this bill moving forward, have
8 you had any discussions -- obviously it makes sense to put
9 these at a current location. A filling station, private,
10 such as Flying J or Pilot, have you had any preliminary
11 discussions with these private folks? Would they be
12 interested in doing this? Have you reached out to them?
13 MR. COHEN: Well, we haven't reached out that I'm
14 aware of, especially with the aim of providing charging and
15 CNG facilities on their properties. But we do believe that
16 there is good opportunities that we could participate in,
17 again, off right-of-way in the P3, using the P3 Law as a
18 mechanism.
19 So we don't have a project underway in our
20 P3 program expressly for that, but, you know, the P3 Board,
21 I'm sure, would be very interested to hear those proposals
22 coming forward. And they have actually, this past month,
23 put out their annual solicitation for proposals from
24 outside prospective partners.
25 So, you know, if the market is there and alert, 48
1 this is actually a good opportunity for the market to make
2 it known that PennDOT stands ready to work with them on
3 that.
4 REPRESENTATIVE KORTZ: Thank you.
5 Thank you, Mr. Chairman.
6 MAJORITY CHAIRMAN TAYLOR: Thank you.
7 Representative Kinsey.
8 REPRESENTATIVE KINSEY: Thank you, Mr. Chairman.
9 Mr. Shuey, just a quick question.
10 MR. SHUEY: Yeah.
11 REPRESENTATIVE KINSEY: With the current charging
12 stations that we have set up, what type of complaints, if
13 there are any complaints, what type of complaints have come
14 about just from the current system that we utilize?
15 MR. SHUEY: I don't know that we have got any
16 significant complaints about the systems in place.
17 REPRESENTATIVE KINSEY: Okay. All right. Great.
18 Commissioner Brown, when you testified, you
19 mentioned that the Commission does not presently mandate or
20 regulate, I believe. As we look at this legislation, are
21 there any States that we can look towards where they have
22 similar legislation and there might be some regulation from
23 a similar piece and Commission?
24 PUC CHAIRMAN BROWN: I don't have an answer to
25 that off the top of my head, but we can get you some of 49
1 that information.
2 REPRESENTATIVE KINSEY: Okay. Great. Thank you.
3 PUC CHAIRMAN BROWN: Oh, yeah. We have had
4 conversations through our national organization about what
5 other States are doing. We know, especially in the
6 northeastern part, like Connecticut, Rhode Island, things
7 of that nature, they are really rolling out a lot of
8 electric vehicle charging stations. It's very helpful to
9 them.
10 We, as a State, are a State that has a lot of
11 natural gas. So there's always differences that you look
12 at for each of the States.
13 REPRESENTATIVE KINSEY: Okay.
14 PUC CHAIRMAN BROWN: But we can get you some more
15 information.
16 REPRESENTATIVE KINSEY: Great. Thank you.
17 And for Tanya, the question I asked Mr. -- I'm
18 sorry; Ms. McCloskey.
19 ACTING CONSUMER ADVOCATE McCLOSKEY: Yeah.
20 REPRESENTATIVE KINSEY: The question I asked
21 Mr. Shuey, have you or has your organization received any
22 type of complaints related to the charging stations or---
23 ACTING CONSUMER ADVOCATE McCLOSKEY: No, we
24 haven't received any complaints regarding EV charging
25 stations. 50
1 REPRESENTATIVE KINSEY: Great.
2 All right. Thank you all.
3 Thank you, Mr. Chairman.
4 MAJORITY CHAIRMAN TAYLOR: And if our testifiers
5 that are going to be testifying in a later part of this
6 hearing could keep note of Representative Kinsey's question
7 with regard to other State legislation. They might have
8 more to offer on that as we proceed.
9 Chairman Hennessey.
10 REPRESENTATIVE HENNESSEY: Thank you,
11 Mr. Chairman.
12 Good morning, everyone. Or good afternoon at
13 this point, I think. Thank you for your testimony.
14 I'm trying to get my mind around this process and
15 the ownership of these charging stations. If I understand
16 it, the charging stations are being funded by a P3, and I
17 heard somebody say that Blink couldn't afford to do it on
18 its own, so we put in half of the million-dollar grant,
19 $500,000, into funding, at least a partial funding of these
20 stations?
21 MR. SHUEY: Yeah. Well, that was a part of our
22 original agreement, is that the Turnpike Commission would
23 put in 500,000, DEP put up a million dollars in a grant,
24 and Blink was supposed to match that million dollars from
25 DEP. 51
1 So basically the Turnpike's role was only to help
2 get the infrastructure sort of to curbside where the
3 equipment could be built, built in by the third party. So
4 we managed that. We made our commitments. Blink, you
5 know, ran into some issues with regard to cash flow in
6 order to finalize that, and that's, again, where DEP is
7 working with us to try to solve that issue.
8 REPRESENTATIVE HENNESSEY: So the Turnpike
9 Commission put in $500,000, DEP puts in another million,
10 and Blink put up a million?
11 MR. SHUEY: That is what they were supposed to
12 put up. They have not completed that, and I believe--
13 REPRESENTATIVE HENNESSEY: Okay.
14 MR. SHUEY: We have not spent the 500,000, and
15 DEP hasn't spent the entire million, so.
16 REPRESENTATIVE HENNESSEY: Well, who paid for the
17 installation of these stations which exist now?
18 MR. SHUEY: Blink did. They got us so far. They
19 got us through these pieces.
20 REPRESENTATIVE HENNESSEY: All right. So they
21 own the five stations---
22 MR. SHUEY: They do. Yeah.
23 REPRESENTATIVE HENNESSEY: ---or however many
24 there are that are out there.
25 MR. SHUEY: They do. They own the five that are 52
1 u p .
2 REPRESENTATIVE HENNESSEY: Because they put up
3 their own money to do that?
4 MR. SHUEY: Yep. Mm-hmm.
5 REPRESENTATIVE HENNESSEY: Okay. Do I
6 understand, though, that as a result of this P3, when
7 it's all done, said and done, that we will put in a million
8 and a half dollars of taxpayers' money, and Blink, or
9 whoever their successor might be, ends up owning a
10 $2 ^ million system?
11 MR. SHUEY: No. I think that's what has to be
12 negotiated yet, because obviously they haven't fulfilled
13 that part of their role.
14 REPRESENTATIVE HENNESSEY: But if they put---
15 MR. SHUEY: So they're operating the stations we
16 have now.
17 Sorry, sir.
18 REPRESENTATIVE HENNESSEY: But if they put up
19 their money---
20 MR. SHUEY: Yeah.
21 REPRESENTATIVE HENNESSEY: ---they end up with a
22 $2 ^ million infrastructure or the cost of all these?
23 MR. SHUEY: Right now, they're continuing to
24 manage that. Where this thing shakes out when all of the,
25 all of the contract requirements and the grant requirements 53
1 are finished is yet to be determined.
2 So I'm not going to tell you that they're going
3 to own it, because if they don't complete the task that was
4 under contract, then they have not, then they have not
5 fulfilled that obligation.
6 REPRESENTATIVE HENNESSEY: Okay. But if they
7 don't and we get somebody else to do it, then is the
8 ultimate end of this process that the provider of the
9 electrical service ends up owning all these stations?
10 MR. SHUEY: That is the goal, yes.
11 REPRESENTATIVE HENNESSEY: Okay.
12 MR. SHUEY: So there is a — yeah?
13 REPRESENTATIVE HENNESSEY: Let me shift gears for
14 you. Let me talk about gasoline.
15 I stop at the Somerset rest area or something and
16 I fill up with Sunoco gas.
17 MR. SHUEY: Yep.
18 REPRESENTATIVE HENNESSEY: Does Sunoco own the
19 pumps and the tanks and the canopies above the---
20 MR. SHUEY: They do.
21 REPRESENTATIVE HENNESSEY: Okay. Don't we
22 periodically put that contract out to bid?
23 MR. SHUEY: We do.
24 REPRESENTATIVE HENNESSEY: Okay. And if, say,
25 Exxon is the successful bidder, do they then have to go out 54
1 and negotiate with Sunoco to buy all of that
2 infrastructure?
3 MR. SHUEY: That would be part of the RFP when we
4 go back out in 30 years.
5 REPRESENTATIVE HENNESSEY: I'm sorry. In
6 30 years, is that how long the Sunoco contract is?
7 MR. SHUEY: That's how long is remaining on that
8 lease.
9 REPRESENTATIVE HENNESSEY: And--
10 MR. SHUEY: So it would all be part of whatever
11 the next phase of that is.
12 REPRESENTATIVE HENNESSEY: But if Sunoco isn't
13 the high bidder, then they have the ability to say or to
14 sort of stymie Exxon's or Conoco's or somebody else's bid
15 by saying, we own the pumps and the stations and the
16 canopies above our stations, therefore the filling areas;
17 so therefore, we're not going to sell those to you. How do
18 you get -- how does Conoco or Exxon come in and replace
19 Sunoco?
20 MR. SHUEY: In terms of--
21 REPRESENTATIVE HENNESSEY: Am I asking a
22 confusing question?
23 MR. SHUEY: Well, you are, only in the sense that
24 there is a -- in order for Sunoco to be, for that product
25 to be rebid, there would be an RFP with all sorts of 55
1 requirements in it. They only own that -- I suppose I
2 didn't answer the question correctly. They only own it in
3 the terms within the lease. So let's say it this way:
4 They lease those facilities from us.
5 REPRESENTATIVE HENNESSEY: They lease the
6 facilities from the Turnpike Commission?
7 MR. SHUEY: Jack, am I way off on this?
8 This is Jack Christensen. He is our Director--
9 MAJORITY CHAIRMAN TAYLOR: Can I try to get it
10 back on track?
11 MR. SHUEY: Certainly.
12 MAJORITY CHAIRMAN TAYLOR: Because I think what
13 Chairman Hennessey is asking, and he can correct me if I'm
14 putting words in his mouth, is that there has to be a
15 reason that government---
16 MR. SHUEY: Right.
17 MAJORITY CHAIRMAN TAYLOR: ---meaning the
18 Turnpike Commission and DEP, put up the money with a
19 private entity.
20 MR. SHUEY: There is.
21 MAJORITY CHAIRMAN TAYLOR: The answer to that
22 question is?
23 MR. SHUEY: Is because we were attempting to seed
24 the market on this new technology that needed to be out
25 there in order for these vehicles to continue to use our 56
1 system. So--
2 MR. CHRISTENSEN: The grant we had was---
3 MAJORITY CHAIRMAN TAYLOR: Hold on a second.
4 MR. SHUEY: Hang on, Jack. Just let me
5 introduce--
6 MAJORITY CHAIRMAN TAYLOR: We're not going to get
7 it. We got all this to worry about.
8 MR. SHUEY: Yeah. Just let me introduce, this is
9 Jack Christensen. He's our Director of Facilities and
10 Energy Management. So--
11 MAJORITY CHAIRMAN TAYLOR: Jack, if you want
12 to add to that, please take a mic and then introduce
13 yourself.
14 MR. CHRISTENSEN: Good morning. Thank you.
15 My name is Jack Christensen, Director of
16 Facilities and Energy Management Operations at the
17 Pennsylvania Turnpike, and I was involved in the project
18 from its inception.
19 The project with Car Charging Group LLC, now
20 Blink, was a reimbursement grant. It was a million-dollar
21 seed money grant, alternative fuel investment grant money,
22 from the Department of Environmental Protection.
23 The Department of Environmental Protection
24 provided the million-dollar grant opportunity.
25 Car Charging was supposed to do matching funds, a million 57
1 dollars along with it. The Turnpike provided 500,000,
2 which was only for infrastructure that would be in the
3 ground permanently. So that would be moneys that were not
4 lost. I mean, it was conduit; it was wire; and it could be
5 used, it was a concrete pad that could be used; bollards to
6 protect any devices that were out there. It was all stuff
7 that could be reused if another vendor came in.
8 Car Charging Group LLC was not really financially
9 capable of finishing the project. It was thought in the
10 beginning they were. There was an evaluation process on
11 DEP's side that seemed to indicate that.
12 From a technical perspective and from a financial
13 perspective, I believe they overcommitted their funds on a
14 national level versus just the State level. They should
15 have, quite frankly, focused a little closer on the State
16 but focused their corporate sights a little larger on the
17 national level and were trying to do, quite frankly, too
18 many projects at one time. So they weren't really able to
19 maintain the timelines.
20 We worked several times, cooperatively with DEP,
21 several times to amend the schedule and the budgets to
22 allow them to be successful, but they weren't. So--
23 MR. SHUEY: Jack, can you just let us know where
24 the contract will stand if Blink ultimately doesn't fulfill
25 their obligation. 58
1 MR. CHRISTENSEN: The contract with Blink, quite
2 frankly, there are two contracts involved. There was a
3 contract with Blink Network and DEP. That contract has
4 been canceled because they could not perform. The moneys
5 that were not used on that contract were back in DEP's
6 coffers.
7 The contract was contingent with us. And the
8 contract with DEP and the Car Charging Group had a
9 contingency essentially with us as well. We had a contract
10 for installation, operation, and maintenance. DEP's
11 contract was for the reimbursement grant piece. Their
12 contract got canceled, hence our contract got canceled,
13 because it was a contingent thing there.
14 They are currently operating the stations that we
15 do have on our turnpike right now. There are five, as
16 Craig mentioned. They are currently operating and
17 maintaining them so that we don't have a lapse in customer
18 service, because customers have been utilizing them. We
19 have had 454 charges. So we didn't want to let customers
20 with nothing, so they're still operating them.
21 Currently, there is another alternative fuel
22 investment grant opportunity out there. It closes on
23 November 17th. That is a DEP grant as well, and that
24 provides additional funding, I believe up to $500,000 for
25 one project on FAST Act Corridor. It's not just the 59
1 turnpike but it's FAST Act Corridor locations.
2 So we're hoping that there will be a successful
3 bidder out there that will be able to come in and finalize
4 the installations that we contemplated originally.
5 MR. SHUEY: So I think the bottom line is that as
6 far as Blink goes, they didn't get anything -- they didn't
7 get something for nothing. You know, they put what they
8 put in, and there will be a renegotiating and all that, so.
9 REPRESENTATIVE HENNESSEY: Okay. But,
10 Mr. Christensen, do I understand from your testimony that
11 if Blink sort of fades into the limelight or in the sunset
12 and some other company comes in, we will allow them, the
13 Turnpike Commission will allow them to use the
14 infrastructure that's there?
15 MR. CHRISTENSEN: That would be correct.
16 REPRESENTATIVE HENNESSEY: And that sounds like
17 we own it---
18 MR. CHRISTENSEN: That's correct.
19 REPRESENTATIVE HENNESSEY: ---the State or the
20 Turnpike.
21 MR. CHRISTENSEN: The infrastructure that is in
22 the ground, we own. That is correct.
23 REPRESENTATIVE HENNESSEY: Okay. So I'm
24 confused, because I thought I heard testimony about how the
25 EDCs would be able to recover their costs through charging 60
1 the ratepayers?
2 MR. SHUEY: Well, that's an entirely--
3 REPRESENTATIVE HENNESSEY: If it's our system,
4 why are they getting their money back?
5 MR. SHUEY: Right. I think -- and I'm sure
6 Gladys knows this one better.
7 REPRESENTATIVE HENNESSEY: Okay. Well, go ahead.
8 MR. SHUEY: But what she's talking about and how
9 ours were set up, they're not on the same plane.
10 PUC CHAIRMAN BROWN: It's completely different.
11 MR. SHUEY: They're not on the same plane.
12 REPRESENTATIVE HENNESSEY: Okay. Well, I'm still
13 lost.
14 I won't belabor it---
15 PUC CHAIRMAN BROWN: Okay.
16 REPRESENTATIVE HENNESSEY: ---but it seems to me
17 that we own the infrastructure. We own -- Sunoco, after
18 30 years, if we want to get a different company in, Sunoco
19 doesn't take its stuff down---
20 MR. SHUEY: No.
21 REPRESENTATIVE HENNESSEY: ---and pull its pumps
22 and tanks out of the ground and then have somebody else
23 come in and start from scratch; they simply take over the
24 infrastructure that's there. That sounds like we own it
25 and we lease it. We are allowing Sunoco to use it while 61
1 they go through their 30 years of providing gasoline.
2 MR. CHRISTENSEN: That's essentially correct.
3 They do have operation and maintenance authority over that
4 equipment, and any kind of repairs or anything like that
5 they have to do as well, Sunoco would.
6 REPRESENTATIVE HENNESSEY: But that's part of the
7 lease.
8 MR. CHRISTENSEN: That's all part of the lease.
9 REPRESENTATIVE HENNESSEY: Okay. Thank you.
10 MR. CHRISTENSEN: What you would see change in
11 that scenario would be the logos on the canopies and
12 pumps.
13 REPRESENTATIVE HENNESSEY: Okay. Thank you.
14 Thanks, Mr. Chairman.
15 MAJORITY CHAIRMAN TAYLOR: Thank you, sir.
16 And Commissioner, for clarity, do you want to
17 distinguish what you were---
18 PUC CHAIRMAN BROWN: For clarity, we're merely
19 looking at the bill and the future rollout and the ability
20 for electric distribution companies to come and be able to
21 own the charging stations, and they would file plans before
22 us. So yes, they would own it. And my conversation, my
23 testimony, was based upon that, not about---
24 MAJORITY CHAIRMAN TAYLOR: Right. And this bill
25 is looking for the solution to that question. 62
1 PUC CHAIRMAN BROWN: Looking for the ability to
2 have that type of rollout and ownership of the EDCs of
3 charging stations.
4 MAJORITY CHAIRMAN TAYLOR: Right. So what
5 Chairman Hennessey was talking about in terms of Blink is
6 existing.
7 PUC CHAIRMAN BROWN: Correct.
8 MAJORITY CHAIRMAN TAYLOR: Everything else is
9 sort of our concept that we are developing.
10 PUC CHAIRMAN BROWN: Correct.
11 MAJORITY CHAIRMAN TAYLOR: Chairman Harper.
12 REPRESENTATIVE HARPER: Just briefly on the
13 drafting question that Chairman Keller raised.
14 I think that -- and I just want to see if this is
15 right. I'm looking at the two guys on the right end of the
16 table. I recognize that we have got a significant issue
17 with who pays for the infrastructure and how it is paid
18 for. I get that.
19 But on the issue of whether or not we should
20 include highways other than the turnpike, which is under a
21 different Federal regimen -- and the turnpike, by the way,
22 has different economic considerations. They may want to
23 put up charging stations to attract certain electric
24 vehicles or something. I mean, that -- which wouldn't work
25 for you, you know, because you don't actually get a toll 63
1 per vehicle.
2 So I guess what I'm saying is, wouldn't it make
3 sense to leave the bill inclusive of both PennDOT roads and
4 the turnpike so that if Congress catches up to
5 Pennsylvania, you know, you can go ahead with that. I
6 mean, assuming we can solve the other problems, wouldn't it
7 make sense not to take it out but to leave it in, and now
8 you can't take advantage of it as a P3 until the Federal
9 Highway Administration changes its rules.
10 But, you know, it's not easy to get a bill
11 passed, and it might make more sense to leave them in.
12 Would you have an objection to that?
13 MR. COHEN: I don't believe that we would find
14 that problematic, but with the understanding, the common
15 understanding, that we can't act on the provisions of
16 legislation which would include those requirements until,
17 unless and until, you know, the Federal law and the highway
18 code changes.
19 I guess it's a question for a lawyer, and I don't
20 want to practice law without a license in front of this
21 Committee.
22 REPRESENTATIVE HARPER: Everyone else does.
23 MR. COHEN: Whether or not we could do it.
24 REPRESENTATIVE HARPER: Everyone else does.
25 Thank you. 64
1 Thank you, Mr. Chairman.
2 MAJORITY CHAIRMAN TAYLOR: Well, to all our
3 testifiers on this panel, thank you very much.
4 And to our audience, you can see why we have
5 hearings. And, you know, these items, and particularly
6 with new technology, are complicated and we want to try to
7 get it right.
8 I always think back to my other chairmanships
9 when people would say, you folks are constantly trying to
10 deal with an industry you don't understand. My answer to
11 that question is, that's correct. That's what we do every
12 day here, and we'll continue to do the best we can with
13 that.
14 So thank you very much.
15 MR. COHEN: Thank you.
16 PUC CHAIRMAN BROWN: Thank you.
17
18 PANEL II:
19 ELECTRIC UTILITIES
20
21 MAJORITY CHAIRMAN TAYLOR: Our next witness is
22 Thomas Bonner, who is Manager of Government Affairs and
23 Policy and Planning of PECO.
24 MR. BONNER: Good afternoon, Chairman Taylor,
25 Chairman Keller, Representative Quinn, and Members of the 65
1 Committee.
2 My name is Tom Bonner. I am the Manager of
3 State Government Affairs at PECO, and in my role, I work on
4 developing innovative legislative and regulated solutions
5 to the emerging business needs of our customers. Thank you
6 very much for having this hearing today.
7 PECO believes that the time is right for the
8 State to adopt an approach that brings transportation
9 analysts, industry experts, utilities, and local
10 governments together to develop integrated transportation
11 plans that ensure public access to charging opportunities
12 and promote electrification in high-value public purpose
13 applications.
14 I'm going to depart from my written testimony and
15 just, you know, try to react to some of the conversation we
16 have had thus far.
17 And first of all I want to emphasize that we
18 believe, when we talk about public access, what we're
19 talking about is ensuring the chargers are located at
20 strategic locations to give consumers the confidence that
21 if they purchase one of these vehicles, they will have the
22 opportunity to charge and they will not be stranded without
23 a location to charge.
24 So when you see something like a private
25 developer contracting with Walmart or another commercial 66
1 company to put chargers in front of their buildings because
2 that host believes that's a good business opportunity,
3 that's great. That should continue going on. There
4 probably should not be any utility role in that. That's
5 the commercial marketplace.
6 What we're talking about is really a backbone
7 infrastructure and providing strategic geographic access,
8 and then also potentially in areas like dense urban areas
9 where it will be a real challenge to locate, especially
10 these fast chargers, to have the utility help facilitate
11 that.
12 I think this discussion that has been had on the
13 Turnpike contract is very illustrative. One of the
14 questions is, these fast chargers do have very high capital
15 requirements to put in the infrastructure, and at current
16 usage levels, it's going to take quite a while before that
17 is something that, on a normal commercial business
18 opportunity, either the charging company or the host will
19 have any opportunity to recoup that investment. That is
20 there more as a lifeline than as something that, you know,
21 would support itself as a business proposition. That's
22 what we believe the appropriate utility role is.
23 And one of the things that we very much like
24 about 1446 is it doesn't dictate how these investments will
25 happen. It authorizes a broad range of options and then 67
1 gives the PUC the ability to determine, on a case-by-case
2 basis, based on these independently developed third-party
3 regional plans, does this fit the needs of this particular
4 community and region.
5 In some cases, utility ownership in a fully
6 regulated environment may be a good solution. In the cases
7 of the shopping malls and the Walmarts, there is probably
8 not a role for the utility, and you have to sort that
9 through with the facts on the ground.
10 The reason we believe the regional assessments
11 make sense and we believe having the utility help fund that
12 is simply because no one else is filling that role. So
13 utilities operate regionally. We are regulated by the PUC,
14 so there is public oversight into how those contracts are
15 awarded, how they are developed, and then you turn it over
16 to an independent third party that has expertise in
17 transportation planning.
18 Once you identify the high-level need for
19 charging, then we can look at our utility distribution
20 system and see where's the most cost-effective place to put
21 in the charging infrastructure in that, you know, that
22 high-level plan. And again, you're trying to get access
23 for the customers.
24 Another issue that came up, I think there may be
25 a little bit of a misunderstanding. The expectation would 68
1 be the actual drivers of EVs are the only ones paying for
2 the electric that comes off the chargers. The issue of
3 utility support is just for the infrastructure going in.
4 And, you know, Representative Keller, I would
5 agree there is a problem with collection of those fees for
6 electric vehicle charging. Part of it is that there is an
7 electric GRT, and it probably makes sense when you have
8 incremental demand created by transportation
9 electrification to be shifting some of that over into the
10 Highway Trust Fund when it's new and it's a result of
11 transportation electrification.
12 And then I know there's the existing use tax.
13 Having the regional plan, having the utility at least in
14 some way involved, probably gives you greater visibility
15 into where the charging stations are going in and makes it
16 easier to collect those revenues that the State already
17 should be collecting. So we think that's a good thing in
18 terms of getting the revenues to help fund the highway
19 system.
20 You know, the things that we like about 1446 is,
21 we believe the State does have to set a goal. One thing we
22 found out in talking with auto manufacturers is, they
23 devote their resources. They do their marketing. They
24 send the vehicles to where they see a State commitment for
25 electrification. So having Pennsylvania just pass this law 69
1 in and of itself helps get some very good vehicles, things
2 that are extremely competitive, out to our consumers so
3 they can make that choice.
4 The second thing is, having the assessment done
5 by an independent third party really addresses a problem
6 you have had in a lot of other States where utilities have
7 just gone forward on their own and submitted infrastructure
8 investment plans. Without independent third-party
9 verification of what was being submitted ended up resulting
10 in very long, lengthy regulatory processes, highly
11 contentious, that really delayed getting solutions and
12 didn't facilitate them.
13 When the utility files the plan, again, the PUC
14 has full discretion, the way 1446 is written, to call balls
15 and strikes. If they believe the utility is proposing to
16 over-invest, if they believe in some cases that no utility
17 charging stations are appropriate, they have the full
18 authority to make that decision, and the bill in no way
19 prejudices that.
20 But it does leave the flexibility, again,
21 especially for that lifeline, you know, backbone charging
22 network, where if that is the best option. And in some
23 cases it may be, because you have a situation, you know
24 where we at PECO are. You know where to find us. Our
25 cities and our communities know where to find us. There is 70
1 probably a high level of confidence that if we put in that
2 infrastructure, it will be maintained and continue in use
3 for the public. So I think that is one of the potential
4 benefits of utility ownership of those strategic locations,
5 but it's not mandated by the bill.
6 The time-of-use rates we think can be very
7 valuable to the extent that, in the evenings when you have
8 very low usage, if you're encouraging consumers to charge
9 their vehicles at night. All the evidence we have from
10 California and other places where there are a lot of EVs
11 is, consumers will do exactly that, and the bill just
12 clearly authorizes that utilities can offer those types of
13 rates.
14 That has been a matter of some legal and
15 regulatory contention, very detailed stuff, so we think it
16 would make sense to just clearly authorize that for the
17 purpose of electric vehicle rates, utilities can offer
18 those specialized time-of-use rates.
19 There are a lot of different models for how
20 utilities can be involved. What we could do, we could
21 offer, like, lease arrangements, where if you have gas
22 stations in the urban environment, we put out a fixed price
23 to encourage someone to put in a charger, and then that
24 way, you have that access. You could do it so that the
25 price of the charging is regulated. 71
1 One concern that I think we have sometimes is if
2 you put a lot of ratepayer resources into getting the
3 infrastructure out there and then there is no regulation on
4 the price in terms of sale, that you could have some
5 opportunistic behavior out there. So that's another thing
6 to watch for and be careful of as you do this.
7 You know, we believe our regulators are very well
8 qualified to call these balls and strikes and really work
9 with the utilities to get good plans, to get that backbone
10 infrastructure in place, but also protect the consumers at
11 the same time.
12 With that, you know, and my statement, I'll be
13 happy to answer any questions.
14 MAJORITY CHAIRMAN TAYLOR: Thank you,
15 Mr. Bonner.
16 Representative Kortz.
17 REPRESENTATIVE KORTZ: Thank you, Mr. Chairman.
18 Thank you, Mr. Bonner, for your testimony.
19 Sir, you mention in your testimony that PECO
20 is collaborating with SEPTA on their EV bus pilot
21 program?
22 MR. BONNER: That's correct.
23 REPRESENTATIVE KORTZ: Do you know the number
24 of buses that are in service and how many charging
25 stations? 72
1 MR. BONNER: It's 25 buses, and they're going to
2 be charging them all at one depot down in South
3 Philadelphia.
4 And I'm a particular fan of that project, because
5 one of the buses runs along my old childhood home at 3rd and
6 Morris Streets. So I have been really pleased to work with
7 SEPTA on that project.
8 REPRESENTATIVE KORTZ: Any idea how long a charge
9 lasts on a bus?
10 MR. BONNER: I believe they do overnight slow
11 charging, so they have had to invest a fair amount of
12 dollars to upgrade the capital and to upgrade the
13 infrastructure at that depot to be able to charge the
14 25 buses overnight. But the original thought was to do
15 what they called en-route charging, and there was some
16 logistic challenges to that, and they changed the project
17 and decided to do the overnight charge.
18 And, you know, it does also point out another
19 potential place where we believe utilities could provide a
20 role in helping a customer like SEPTA that's a high value
21 public-purpose customer offset some of the infrastructure
22 costs, either through a customized rate or potentially what
23 they call a make-ready investment, where we would assume
24 more of the costs of them putting in that type of
25 infrastructure when you're doing something that benefits 73
1 the broad public.
2 REPRESENTATIVE KORTZ: Can the bus run 8 hours or
3 12 hours, 16 hours, without charging? Do you know that?
4 MR. BONNER: Yeah. It will run through the full
5 day, peak service, from 7 a.m. to 7 p.m.--
6 REPRESENTATIVE KORTZ: Okay.
7 MR. BONNER: ---come offline, and charge
8 overnight.
9 REPRESENTATIVE KORTZ: Okay. And one last
10 question, if I may, Mr. Chairman.
11 Has PECO installed an EV charging station at your
12 plants, and do you have some of your company vehicles
13 electrified?
14 MR. BONNER: Yes. We have, I believe the latest
15 number is 26 EV chargers in our employee lots, and we're
16 finding them getting increasing usage.
17 We have a hybrid electric bucket truck, so the
18 actual vehicle doesn't run off electric, but the boom that
19 goes up and repairs the line does. So it's very
20 beneficial, because you don't have to run the diesel engine
21 while you're doing work. You're operating off the electric
22 to do the repair on the lines and you're not, you know,
23 burning diesel and sending out, you know, emissions into
24 that local neighborhood there. Very popular both with our
25 customers and our employees. 74
1 REPRESENTATIVE KORTZ: Thank you.
2 Thank you, Mr. Chairman.
3 MAJORITY CHAIRMAN TAYLOR: And I should point out
4 that there is testimony in our packet from SEPTA, maybe the
5 last item. I don't know.
6 Is it in our packet? Yes. So everyone has that
7 if you need it.
8 Chairman Keller.
9 MINORITY CHAIRMAN KELLER: Thank you,
10 Mr. Chairman.
11 Just in full disclosure, I don't think I ever got
12 along with the guys from 3rd and Morris.
13 MR. BONNER: That was my big brothers.
14 MINORITY CHAIRMAN KELLER: I think from your
15 testimony what you're saying is like that Walmart and the
16 retailers, if they want to put in an electric charging
17 station, that's fine. A private industry will do that.
18 MR. BONNER: Absolutely.
19 MINORITY CHAIRMAN KELLER: And that I think what
20 you're saying is to get into a dense urban area like
21 Philadelphia, it creates a lot of problems.
22 MR. BONNER: Yeah. There are a lot of
23 challenges.
24 Wherever you're putting in the infrastructure,
25 it's likely to be costly at first, and the utilization is 75
1 going to be fairly low at first, so it's hard to find a
2 commercial party that is, you know, prepared to come in and
3 make that investment knowing it's maybe a 20-year return on
4 that investment. And that's where we believe, as the
5 utilities, we can help out there, because it would really
6 either be us or you, you know, either the State or the
7 utility that has that long-term, you know, horizon to
8 provide some of those investments.
9 MINORITY CHAIRMAN KELLER: I was driving down
10 20th Street the other day, and I seen, which caught my eye,
11 there were three electric charging stations right alongside
12 the curb on 20th Street. Was there a program that did that?
13 If it's so hard, how did they get there?
14 MR. BONNER: There is a program in the city of
15 Philadelphia where if someone buys an electric vehicle,
16 they can get a dedicated parking space in front of their -
17 it's not for electric -- it's not for that customer only,
18 but it is for electric, that ran into some community
19 opposition because people were concerned about somebody
20 getting the best parking space on the block.
21 So they put a moratorium in place on that this
22 spring, and we have been involved in conversations with the
23 city about, well, how do you move forward and how do you
24 provide public access to charging. We think the answer is,
25 there are probably a couple of options. One is, lease at 76
1 the gas station or the Wawa-type model.
2 The other one would be what they call
3 fast-charging pods, like are being experimented on in some
4 places out West, where you put in the fast-charging
5 infrastructure, and it's really like a neighborhood
6 amenity, you know, kind of like a dog park. So if somebody
7 is looking, oh, I'd be interested in moving into this
8 neighborhood but I have an EV; where can I charge, oh, at
9 the place at, you know, 6th and Fitzwater.
10 Or you look at bringing public facilities, like,
11 you know, neighborhood parks, city buildings, et cetera,
12 and that's where we're working with the city to help
13 identify what might be solutions in a pretty challenging
14 environment.
15 MINORITY CHAIRMAN KELLER: But if it's so
16 expensive it takes 20 years to get your investment back,
17 are you telling me the city paid for those?
18 MR. BONNER: No, because those are the Level 1.
19 They are the slow chargers that take all night to charge
20 the vehicle. So there, the cost of the charger is a few
21 hundred dollars, and then you have to do some digging by
22 the curb to put in the infrastructure. I think on average
23 it costs about $2,500.
24 Most people that do it, the big thing they want
25 is the parking space right in front of their home. 77
1 MINORITY CHAIRMAN KELLER: So if everybody in the
2 city wanted their own electric charging station, it would
3 only cost them $2,500?
4 MR. BONNER: Yeah, for an overnight charge. But
5 the problem is, then you're cannibalizing all of the
6 street-side parking, and that's the problem.
7 MINORITY CHAIRMAN KELLER: Believe me, I'm from
8 South Philly; I understand that. But I thought the reason
9 we had to do this, the government had to get involved, the
10 PUC, PECO, is because it's so expensive to put it in, it
11 takes 20 years to get it back.
12 MR. BONNER: For the faster charging.
13 MINORITY CHAIRMAN KELLER: How much difference is
14 it from 2,500 to what a fast charger costs?
15 MR. BONNER: I think the numbers you heard
16 earlier from the Turnpike were about right. You would just
17 be---
18 MINORITY CHAIRMAN KELLER: 100,000?
19 MR. BONNER: It probably has come down since
20 then. We'll, you know, check back with some of our
21 friends. And I know you have people from the charging
22 station manufacturers on the next panel.
23 The challenge is that that one space, that,
24 you know, pretty precious space, is being used for one car
25 versus--- 78
1 MINORITY CHAIRMAN KELLER: I get that. I'm
2 just---
3 MR. BONNER: ---something that everybody can
4 charge in. Yeah.
5 MINORITY CHAIRMAN KELLER: I'm just wanting to
6 know why, I mean, it's that much expense, the difference
7 between $2,500, what they're in now, that they're using in
8 the city now, and $100,000. That's the difference in the
9 expense for a fast-charging station and an overnight
10 charging station?
11 MR. BONNER: For a fast-charging station, yeah.
12 MINORITY CHAIRMAN KELLER: All right. Thank you.
13 One more question, Mr. Chairman.
14 Who will set the fee for the charging stations?
15 MR. BONNER: That's a great question.
16 So for that scenario where we talked about, you
17 know, Walmart believes it's in their business interests to
18 have a charger in front of it and they contract with a
19 third party, that's entirely unregulated, and it should be
20 entirely unregulated.
21 When you start looking at using public dollars,
22 either government dollars or utility dollars to facilitate
23 getting that infrastructure in the ground, then as the more
24 public dollars you put in, the stronger you need to be
25 looking at regulation of the price. And that's where, you 79
1 know, we think the best thing to do is move forward, have
2 the utilities put forward plans, and then let the PUC work
3 through those specific issues.
4 You could have incentives where you're just,
5 where a workplace wants to put in some chargers like we
6 have, and you want to call, you want to call it, you know,
7 they call it future proofing. You want to put it so that
8 today it might make sense to put in three, but long term it
9 might make sense to put in eight, where you have an
10 incentive for them to put in eight now, because building
11 for eight now is a lot cheaper than doing three today and
12 five tomorrow. So there's a whole lot of different
13 variations that you need to look at.
14 MINORITY CHAIRMAN KELLER: What was the cost when
15 you put the charging stations in the PECO facilities?
16 MR. BONNER: It was not very heavy. It is
17 something that we bore. I'll get you the number on that.
18 MINORITY CHAIRMAN KELLER: Send that to the
19 Chairman?
20 MR. BONNER: Absolutely.
21 MINORITY CHAIRMAN KELLER: And one more thing, I
22 guess your opinion of what Chairwoman Brown said. She
23 believes that everybody should, every ratepayer should bear
24 the cost of building this new infrastructure. What's your
25 opinion of that? 80
1 MR. BONNER: I actually thought Chairman Brown
2 laid that out very well.
3 For PECO, we're almost all in urban territory,
4 and everyone is within one region. It would probably make
5 sense to just keep that in one bucket. Whereas some of the
6 utilities that serve more dispersed territories -- maybe
7 some of them might be in these priority zones that the bill
8 spells out -- it would make sense for them to share the
9 costs. Others might be hundreds of miles away, and it
10 probably wouldn't make sense.
11 So potentially having some type of rider where
12 utilities can do a differentiation within their territory,
13 I thought that was very well stated.
14 MINORITY CHAIRMAN KELLER: So you think the
15 ratepayers in Philadelphia should share all the costs on
16 electric charging stations amongst all the ratepayers, but
17 if we go into a non-priority county, then they're different
18 than--
19 MR. BONNER: Yeah; I think that makes sense. I
20 thought she laid that out very well.
21 MINORITY CHAIRMAN KELLER: Okay.
22 Thank you, Mr. Chairman.
23 MAJORITY CHAIRMAN TAYLOR: All right.
24 Representative Quinn.
25 REPRESENTATIVE QUINN: Thank you. 81
1 Just as a follow-up for that, for Chairman
2 Keller's question.
3 When you just summarized that you think they
4 should, that all the ratepayers should share this cost---
5 MR. BONNER: Yeah.
6 REPRESENTATIVE QUINN: ---you mean for the
7 initial infrastructure?
8 MR. BONNER: That's correct; yes.
9 REPRESENTATIVE QUINN: Correct.
10 MR. BONNER: Yeah. And it's about providing
11 public access---
12 REPRESENTATIVE QUINN: Right.
13 MR. BONNER: -- so that, you know, anyone can buy
14 one of the vehicles and it not just be somebody who has,
15 you know, their own garage at home or works for a
16 particular employer who offers charging. You're trying to
17 broaden the network.
18 REPRESENTATIVE QUINN: Okay. Let me roll back
19 just for the -- did I---
20 MINORITY CHAIRMAN KELLER: The point I'm trying
21 to emphasize is, this is a drastic change of how we fund
22 roads and bridges today. Users pay for the roads and
23 bridges today. Now we're going to ask people who don't use
24 the roads and bridges to pay for the infrastructure for
25 people to charge their cars. That's the point I'm making. 82
1 REPRESENTATIVE QUINN: As we most likely do with
2 the rollout of Comcast, Verizon, all those other
3 infrastructures, I'm going to guess.
4 That's not in this Committee. I'm in over my
5 head with that, so I'm going to just ask for the benefit of
6 those people, including myself, who don't turn on an
7 electric car every day. We're talking about public access,
8 but can we take a step back for the private access?
9 Is PECO getting calls right now to say, hi, PECO;
10 I want to put something in my garage, and if so, is it a
11 220? Is it a 110? What do you put in for a private
12 ownership of this?
13 MR. BONNER: Well, we--
14 REPRESENTATIVE QUINN: Just so we're getting a
15 sense of what this means.
16 MR. BONNER: Yeah.
17 Well, we're not involved in that at all. We do
18 offer an incentive for customers that if they register the
19 car with us so we can track the usage pattern and know if
20 we're starting to get any clusters that we need to be
21 looking at for reliability purposes, we offer a $50
22 incentive just so we have that information. But the
23 customer usually does that on their own.
24 The auto dealers, when they sell the vehicles,
25 they usually have information on charging for those 83
1 customers. I don't think any of that is a proper role for
2 the utility.
3 I think it's about -- and some of the other folks
4 later on might be able to help. I think it's about a 50/50
5 split today between people just putting in the Level 1
6 chargers, which is really just a three-prong plug, and
7 people going---
8 REPRESENTATIVE QUINN: A dryer.
9 MR. BONNER: Yeah. -- and people going to the
10 Level 2 to get a faster charge at home.
11 REPRESENTATIVE QUINN: Okay.
12 We heard about, and I don't like using the
13 company's name again who just wasn't able to keep up with
14 their investment, but it seems to me that that would be, it
15 would be a good, quote, unquote, "selling point" for
16 utilities to get into this, because you're not as
17 potentially vulnerable for to not be able to fulfill your
18 end of the contract.
19 MR. BONNER: But I think that's one of the
20 reasons you want to leave that option open in the
21 legislation, because as you look at that, especially for
22 these areas that aren't going to be particularly
23 commercially viable, somebody has to be willing to, you
24 know, carry those costs for a while.
25 REPRESENTATIVE QUINN: Okay. Thank you. 84
1 MAJORITY CHAIRMAN TAYLOR: Chairman Harper.
2 REPRESENTATIVE HARPER: This follows up the same
3 line on a slightly different tack.
4 How would you respond to the criticism that
5 having all the ratepayers pay for the infrastructure is
6 unfair, because most of us don't have electric cars and
7 some of us run around turning lights off and all that jazz,
8 you know, to keep our electric bills a little bit lower.
9 How would you respond to that, along with the concept that
10 your ability to fund this with the rate base really is
11 unfair to the guys who would come along and do it
12 independently.
13 MR. BONNER: Well, two things.
14 I think, A, it would be very limited. All of it
15 would have to be approved by the PUC, and it would have to
16 fulfill this, you know, third-party developed plan. So
17 you're really making sure there is a good basis for making
18 these investments. Someone else has said, this is about
19 how much you need and this is about where it needs to go.
20 We would not be and should not be doing any of
21 that commercial, those commercially viable projects. It's
22 just having a backstop for the access, which potentially
23 everybody could use, even, you know, in the city where you
24 have, you know, the car-share arrangements and you have,
25 you know, taxis. We believe a high-value use like SEPTA, 85
1 supporting that project, is something that, you know,
2 really benefits everybody, either directly or indirectly,
3 and that's where the utility should be filling in.
4 In terms of unfair competition, again, the stuff
5 that is commercially viable we shouldn't be doing. What we
6 should be doing is those investments that, you know,
7 primarily are there to serve a public interest.
8 REPRESENTATIVE HARPER: So how do we write that
9 into the bill?
10 MR. BONNER: After talking to a lot of
11 stakeholders, we suggested to Representative Quinn, and
12 provided a copy to the Committee, a kind of statement of
13 purpose or statement of policy that we think would be a
14 good addition to the bill that tries to clarify that.
15 I don't think that is necessarily the last word
16 on exactly what those words have to say, but I think you
17 can include that without getting too restrictive into, you
18 know, starting to try to legislate future regulatory
19 decisions. I think you should preserve some flexibility.
20 But by maybe clarifying and adding that statement of
21 purpose, I think you can get, you know, you can get there.
22 REPRESENTATIVE HARPER: Good. Thank you very
23 much.
24 MAJORITY CHAIRMAN TAYLOR: Representative
25 John Lawrence. 86
1 REPRESENTATIVE LAWRENCE: Thank you,
2 Mr. Chairman.
3 Mr. Bonner, I appreciate your testimony today and
4 your insight.
5 The legislation before the Committee deals with
6 both electric vehicles and also natural gas, and I would be
7 interested to hear anything with regard to on the natural
8 gas side. This is not my area of expertise, but it just
9 does seem to me that we have natural gas lines that run all
10 over the place for consumer use, and I' m curious to hear,
11 is there anything afoot?
12 I know that there was a couple years ago the
13 PHILL system, I think was the name of it--
14 MR. BONNER: Mm-hmm.
15 REPRESENTATIVE LAWRENCE: ---that was being
16 promoted for in-house use. So you could buy a natural gas
17 vehicle and park it in your garage and fill it up at home,
18 and for whatever reason, that kind of seems to have gone
19 away, or maybe it wasn't viable. I don't know.
20 Could you comment a little bit on, you know, what
21 PECO is looking at with regard to at-home fueling for
22 natural gas and also rolling out with, you know, whether
23 it's a partnership with Wawa or local folks on a more
24 commercial scale?
25 MR. BONNER: Yeah. That's a great question. 87
1 Right now, one of the challenges with passenger
2 vehicles is there is only one model of, you know, kind of a
3 light-duty passenger natural gas vehicle that I'm aware of.
4 I believe it's a Honda. But you don't have that vehicle
5 choice that we see emerging in the electric area, and
6 that's one of the things that as we have talked to other
7 stakeholders on this, people have said, at least at this
8 time, natural gas really is a fleet application.
9 So this idea of the critical charging network
10 felt a little, maybe not perfectly targeted to the
11 natural gas area. So what the bill recommends, which we
12 are very strongly supportive of, is having the Governor
13 make specific recommendations to the Legislature and the
14 PUC on what can be done, especially on fleets, for natural
15 gas. We would also suggest doing the same thing for
16 hydrogen vehicles, which is another, you know, it's a far
17 less mature market.
18 But a lot of the problems we have talked about
19 on electric in this discussion we are seeing in gas. It
20 looked like a hot market 3, 4 years ago, and as the
21 difference in price between diesel and gas started to
22 shrink, some of those third-party operators who we worked
23 with to actually, you know, help get up new fueling
24 stations have retreated from the market, and you do have
25 some fleet owners who have made commitments to vehicles 88
1 who, you know, we have to make sure still have
2 opportunities to fuel.
3 So it's the same questions. It's just a little
4 bit different, because electric primarily feels like a,
5 you know, passenger vehicle application, and right now at
6 least, natural gas feels like a fleet application.
7 REPRESENTATIVE LAWRENCE: So I realize if I
8 bought an electric vehicle, or a natural gas vehicle for
9 that matter, and I wanted to have a charging station or a
10 gas station, whatever it would be, natural gas, at my
11 house, I would contract with a third-party electrician or
12 somebody to have that installed in my house. Does PECO
13 offer an incentive to the consumer for either electric or
14 natural gas at this time?
15 MR. BONNER: Not at this time. We just have the
16 $50 incentive on electric, just to register your vehicle so
17 we can track usage.
18 REPRESENTATIVE LAWRENCE: Okay. Thank you very
19 much, Mr. Bonner.
20 MR. BONNER: You're welcome.
21 REPRESENTATIVE LAWRENCE: Thank you,
22 Mr. Chairman.
23 MAJORITY CHAIRMAN TAYLOR: Representative
24 Donatucci.
25 REPRESENTATIVE DONATUCCI: Thank you, 89
1 Mr. Chairman.
2 Thank you for being here today.
3 Chairman Keller asked most of my questions, but
4 if I was one of the lucky people that got that space in
5 front of my house, when I plug in and I charge that car,
6 what does it cost? Do you know what that usage is or how
7 much?
8 MR. BONNER: Yeah. The best way to compare it is
9 the cost of filling your gas tank and the gallon of gas
10 versus the cost of the electric. The cost of the electric
11 is a little bit less than a dollar of gasoline equivalent.
12 So when I filled up yesterday, I think it was about, you
13 know, $2.79 a gallon. So the cost of fueling is much
14 lower.
15 And the other thing that, you know, down the
16 road, you know, as we start seeing more and more of the
17 affordable electric vehicles come on, your cost of
18 maintenance, I don't want to say they disappear, but it
19 drops dramatically, because instead of hundreds of moving
20 parts in the engine and the need to go in for an oil change
21 every, you know, 3, 4 months, all of that goes away. You
22 have a handful of moving parts. You don't have all of
23 those, you know, liquids and fluids that need to be, you
24 know, kept up.
25 So there are long-term cost savings in having the 90
1 EV, and a lot of it is getting past just the initial, you
2 know, cost to purchase, because the sticker is still higher
3 than the conventional vehicle.
4 REPRESENTATIVE DONATUCCI: Right.
5 Does it cost more for the fast charge?
6 MR. BONNER: For the fast charge? It all depends
7 on how you're doing the pricing.
8 And, you know, we don't own or operate any fast
9 chargers. I think the folks from Greenlots and ChargePoint
10 can answer that question better than I can. That's not
11 really, you know, our universe, at least not today.
12 REPRESENTATIVE DONATUCCI: Okay.
13 And I guess the big problem would be when you
14 pull up to a charging station and there are five cars ahead
15 of you?
16 MR. BONNER: Yeah. And I think what you're going
17 to see as you get more vehicles is like apps develop, where
18 you can know when the charging station is available and you
19 can drive there.
20 And, you know, if people had to wait 12 hours, A,
21 you're not going to be able to turn it over; and it's not
22 going to be, you know, available very often, and that's
23 going to be a disincentive. But if you start to get the
24 fast charging, you can get multiple people using that
25 charger, and it becomes more of a community, you know, 91
1 benefit.
2 REPRESENTATIVE DONATUCCI: Okay. Thank you.
3 MR. BONNER: You're welcome.
4 REPRESENTATIVE DONATUCCI: Thank you,
5 Mr. Chairman.
6 MAJORITY CHAIRMAN TAYLOR: And Mr. Bonner, the
7 $1. Is it $1 relative to a gallon of gas or $1 complete?
8 MR. BONNER: It's $1 relative to a gallon of gas.
9 MAJORITY CHAIRMAN TAYLOR: So that's like
10 one-third of the cost, roughly, somewhere around there.
11 MR. BONNER: Yes.
12 MAJORITY CHAIRMAN TAYLOR: All right. Thank you
13 very much for your testimony.
14 MR. BONNER: And thank you very much for the
15 opportunity to be here.
16 MAJORITY CHAIRMAN TAYLOR: I'm sure we'll be, you
17 know, if we need further clarification on things, we' ll ask
18 them.
19
20 PANEL III:
21 CHARGING STATION PROVIDERS
22
23 MAJORITY CHAIRMAN TAYLOR: Our next panel is
24 charging station providers, which will include
25 Kevin Miller, Director of Policy at ChargePoint; 92
1 Scott Fisher, Vice President of Market Development at
2 Greenlots; and Andrew Daga, President and CEO of Momentum
3 Dynamics Corporation.
4 Gentlemen, good afternoon. Thanks for your
5 patience. We're a little behind, but as you can see, this
6 is very important material and very important to our
7 Members.
8 Now, we're going to start out with Mr. Miller.
9 MR. MILLER: Thank you very much.
10 Thank you to Chairs Taylor and Keller and,
11 through you, to the Members of the House Transportation
12 Committee for the opportunity to testify on House Bill
13 1446.
14 While ChargePoint supports the overall intent of
15 the legislation, we must oppose it in its current form
16 without some amendments, which I'll identify briefly in a
17 moment.
18 In my role as Director of Public Policy for
19 ChargePoint, I work with Legislatures, city and State
20 agencies, and Public Utility Commissions throughout the
21 Northeast and the Midwest to develop and implement policies
22 that make it easier for riders and drivers to get access to
23 electric transportation.
24 I currently serve as Co-chair for Drive Electric
25 Pennsylvania's Infrastructure Committee, and I have been 93
1 providing support to the city of Philadelphia's EV Policy
2 Task Force.
3 ChargePoint is the world's largest network of
4 electric vehicle charging stations, with 42,000 commercial
5 charging spots, including 645 DC Fast charging locations,
6 and I'll briefly identify that terminology in a moment.
7 In Pennsylvania, ChargePoint has worked with
8 customer site hosts to deploy over 350 charging spots,
9 including single and multi-family residential stations,
10 workplace charging such as at Boeing or Google, at retail
11 locations such as at Tanger, Hershey, and Royal Farms,
12 national parks, airports, you name it.
13 Despite our California roots, all of
14 ChargePoint's electric vehicle charging stations, or
15 EV supply equipment, EVSE as it's known, all of our spots
16 in Pennsylvania are Pennsylvania owned and operated.
17 ChargePoint doesn't typically own the charging
18 stations on our network. We design and manufacture the
19 equipment, and we sell those to EV charging station site
20 hosts. And we also provide software and networking tools
21 to support the management, pricing, and the customer
22 interface for our smart networked stations.
23 Our EV charging site hosts themselves are
24 empowered to set pricing and access controls for the EV
25 charging equipment on their premises. 94
1 By initiating more than 30 million charging
2 sessions, drivers on the ChargePoint network have driven
3 more than 716 million electric miles.
4 So ChargePoint supports one of the bill's primary
5 goals, which is to increase equitable access to and support
6 the robust deployment of alternative fuel transportation
7 infrastructure.
8 We strongly agree that it's in the public
9 interest to promote the development of EV charging
10 infrastructure, which is a means to support the
11 Commonwealth's energy, transportation, environmental, a
12 whole host of policy goals. However, the bill as drafted
13 would not achieve those intended goals.
14 The proposed process to develop utility EV
15 charging investment plans completely omits a crucial step,
16 which is setting clear rules of the road for regulated
17 utilities to complement private companies in the
18 competitive EV charging market. Moreover, House Bill 1446
19 specifically preauthorizes utilities to recover costs from
20 ratepayers for those investments for utility ownership of
21 EV charging equipment and services.
22 So failing to design utility programs around a
23 consistent statewide set of guidelines, which were
24 established to determine what that appropriate role for
25 utilities in EV charging might be, would undermine some of 95
1 those higher level transportation electrification goals.
2 Doing so would slow down program implementation
3 by missing the opportunity to efficiently set criteria that
4 are applicable statewide. It would reduce the value to
5 ratepayers and the general public by failing to determine
6 what's the most appropriate use of ratepayer funds to
7 support greater and more equitable access to electrified
8 transportation. And it would also risk locking in
9 yesterday's charging solutions for tomorrow's
10 transportation problems.
11 So as drafted, we see some challenges, though
12 ultimately we do support the bill. Fortunately, the
13 solutions to align the process, as identified in the bill,
14 and the goals is fairly straightforward.
15 We recommend that the Public Utility Commission
16 be instructed to open a rulemaking that would determine
17 what that role for the electric distribution company would
18 be in the competitive EV charging market before those
19 electric distribution companies file electric vehicle
20 charging plans. This would make utility ownership of
21 EV chargers conditional on meeting guidelines established
22 in the course of that proceeding.
23 ChargePoint would also encourage the Committee to
24 consider amendments that would implement "open access"
25 requirements, as identified earlier by Mr. Bonner, for all 96
1 EV charging stations, not necessarily just those that are
2 funded potentially or proposed to be funded with utility
3 ratepayer dollars. Making sure that you have open access,
4 as has been adopted in statute in California, Connecticut,
5 and Massachusetts, for all publicly available charging
6 stations would make sure that you're minimizing the
7 barriers for drivers to get a charge whenever they need it.
8 This should apply statewide and not just to a subset of
9 publicly available stations.
10 We would also recommend expanding the scope of
11 the time-of-use rate design that is proposed, which is a
12 great first step, but just to make sure that we're
13 expanding that to look at the full range of different
14 electricity rate designs which are going to be necessary to
15 help propel electric vehicle charging forward.
16 Traditional electricity rate structures were not
17 designed with EV charging in mind. And EV charging
18 presents a use case in the utilization of electricity that
19 is misaligned with the way that rates are designed, which
20 is a significant barrier to deploying those fast-charging
21 stations that we talked about.
22 We also recommend that the proposed
23 transportation assessments include the broadest possible
24 participation of stakeholders, including private
25 companies. 97
1 So before I close, I would just like to provide a
2 little industry context about EVs, EV charging, and where
3 we see the market going to help inform the Committee's
4 deliberations.
5 So we're in the midst of a transportation
6 electrification revolution. Automakers are transitioning
7 to take advantage of this massive opportunity. We have
8 seen the introduction of the 238-mile-range Chevy Bolt,
9 and we have also identified 400,000-plus preorders of the
10 Tesla Model 3, and those are just the very tip of the
11 iceberg.
12 There is over 30 EV plug-in models currently
13 available, with many more hitting the streets in the next
14 calendar year. Not all of these have the same
15 capabilities. As you can see on the screen and in the
16 handouts, not all of those vehicles up there are capable of
17 accepting a fast charge. So the technology is still
18 shifting, and there are continuing to be innovations in the
19 industry to support those shifting auto changes.
20 Advances in battery technology is allowing for
21 significant cost reductions, and we're going to see these
22 adoptions continue to rise.
23 On the EV charging market itself, there's a real
24 paradigm shift here, where drivers are fueling their
25 vehicles when they arrive at a destination as opposed to 98
1 when they're on their way to a destination. So I have up
2 there a number of different charging products by
3 ChargePoint, all of which have an application for a
4 different type of charging solution, from our single-family
5 home product, which would support overnight charging and
6 can directly implement some of those time-of-use rates that
7 we talked about through smart features, as well as
8 commercial and municipal mixed-use charging, all the way to
9 our DC Fast chargers. On the far right is our Express Plus
10 platform, which at 400 kilowatts is able to deliver a full
11 charge in 10 minutes or less, which has different energy
12 needs and would have a different impact on the grid.
13 What's important to note is that through all of
14 this, notwithstanding the fact that you can get a charge
15 that quickly, over 64 percent of EV charging is taking
16 place at home, 30-some-odd percent is taking place at the
17 workplace, and a very small slice is taking place in
18 public.
19 Having that home charging is really critical. It
20 provides an opportunity to incentivize drivers to delay
21 their charging until off-peak hours, which would spread the
22 total cost of utility grid infrastructure across more
23 electricity use, which would put a downward pressure on
24 electricity rates for all ratepayers, regardless of whether
25 they own an EV or not. So having a flexible, shapeable 99
1 load taking place at home is very valuable. And the fact
2 that the greatest benefit to ratepayers is actually
3 potentially tied to residential charging supports our
4 recommendation that the Commission would be in the best
5 place to determine what elements of the utility program
6 would be necessary to generate benefits.
7 Workplace charging provides a real incentive to
8 drivers, and studies have shown that if workplace charging
9 is available at their work, drivers or potential drivers
10 are six times more likely to buy an EV.
11 In terms of the public charging, it's a smaller
12 slice, but it's extremely important. DC Fast charging on
13 highways and corridors can extend driving range for
14 long-distance travel, and fast-charging hubs in dense urban
15 areas can support home charging for folks that don't have
16 their own parking spot.
17 On the retail and destination sites, what we have
18 seen is that folks are adopting longer term charging and
19 even fast charging in a means to bolster their existing
20 business or operation models.
21 Site hosts would use price signals to incentivize
22 driver behavior. So a retail location might offer 2 hours
23 of free charging and then put in a price to incentivize
24 someone to turn over the asset. The return on the
25 investment that that site host is getting is from a new 100
1 customer coming in with increased dwell time at their
2 location. They're not getting the return off of the price
3 of charging alone.
4 Cars, buses, and trucks are really just the
5 beginning, because every form of transportation can be
6 electrified. As the Committee well knows, autonomous
7 vehicles and Mobility-as-a-Service is toppling existing
8 norms in transportation. Yesterday's technologies are
9 really ill equipped, potentially, to support some of those
10 cutting edge transportation and mobility innovations. And
11 so whatever process is put forward should be flexible to
12 foster and support innovation, competition, and customer
13 choice in Pennsylvania's EV charging market to ensure that
14 we can continue to adapt with the pace of technological
15 change.
16 I want to be mindful of the time, and, you know,
17 one last point to make is that the EV charging market is
18 thriving. I mean, the private funding that is going to
19 support some of these installations is growing at a rapid
20 clip. In the U.S. alone, revenue increased by 576 percent
21 over the years of 2011 to date, and we're seeing growth
22 continue.
23 Public investments are here and growing: the
24 Department of Environmental Protection's Alternative Fuels
25 Incentive Grant Program as well as the Volkswagen 101
1 Environmental Mitigation Trust Fund. Settlement funding
2 will also be on the way to supporting infrastructure.
3 So while we do support the primary goal of the
4 bill, we do note that we would oppose House Bill 1446
5 unless amended to ensure sufficient protection for and
6 encouragement of innovation in Pennsylvania, as I
7 identified before.
8 MAJORITY CHAIRMAN TAYLOR: Thank you.
9 Mr. Fisher.
10 MR. FISHER: Thank you, Chairman Taylor,
11 Chairman Keller, Representative Quinn, and Members of the
12 Committee for the opportunity to testify today in support
13 of House Bill 1446, the Clean Transportation Infrastructure
14 Act.
15 My name is Scott Fisher, and I'm Vice President
16 of Market Development at Greenlots. I'm also a board
17 member of ChargEVC, which is an electric vehicle coalition
18 made up of a number of stakeholders in New Jersey. I live
19 in the Princeton area.
20 As part of Greenlots, I worked in the EV charging
21 industry for EVgo, which is a subsidiary of NRG. Greenlots
22 is a leading provider of grid-focused electric vehicle
23 infrastructure, software, and services.
24 The Greenlots network right now supports 400 of
25 these fast-charging stations that we spoke about earlier 102
1 across North America, including deployments in
2 Pennsylvania. Greenlots' smart charging solutions are
3 built around an open standards focus on future proofing
4 investments, while helping site hosts, utilities, and grid
5 operators manage dynamic EV charging loads.
6 In my role at Greenlots, I help grow our business
7 with governments, utilities, and automakers. Greenlots
8 focuses on these clients and partners due to their
9 willingness and interest in growing the market for electric
10 vehicles and electric vehicle charging infrastructure.
11 As Mr. Bonner stated earlier and the Pennsylvania
12 Turnpike discussed, the business model for ownership,
13 especially non-utility ownership and operation of charging
14 stations, is very limited right now. Capital costs are
15 high, which we discussed, but also operating costs are
16 extremely high as well compared to the usage that we're
17 seeing. While we do think this will improve over time, in
18 the near term, the lack of infrastructure is the prevailing
19 cause of relatively slow adoption of electric vehicles.
20 Without adequate investment in infrastructure, electric
21 vehicle adoption will continue to grow more slowly than the
22 technology and the many benefits that would otherwise be
23 promised.
24 Transportation electrification can be a
25 challenging space for policy and decisionmakers. 103
1 Technology and behavior change are already occurring in
2 transportation, and the economics of charging can be
3 unexpected. Greenlots has had experience with a range of
4 policy efforts and enabling policies. Some of the most
5 successful strategies that we have seen thus far elsewhere
6 in this country are contained within this legislation; for
7 example, articulating a zero emission vehicle goal and
8 establishing enabling policy to encourage utility
9 investments in charging infrastructure.
10 I would respectfully disagree with my industry
11 colleague from ChargePoint in the need to amend this bill
12 at this point. One of the lessons we have learned from a
13 lot of other States is, you know, that sometimes you worry
14 about the perfect being the enemy of the good and sometimes
15 it's good to crawl first, and this bill provides a lot of,
16 as Mr. Bonner said earlier, a lot of flexibility for the
17 Commission and other public oversight agencies to play a
18 role in this space and isn't so prescriptive that we get
19 into a situation where we need to make a lot of changes to
20 this bill at this moment. I just think getting moving is a
21 positive step, and there's enough flexibility in that
22 legislation right now.
23 Greenlots is committed to growing the market for
24 electric vehicles and electric vehicle charging in
25 Pennsylvania and beyond. We think this legislation can 104
1 provide a framework to help grow the market to create
2 opportunities for all the market participants, lower costs
3 for ratepayers, and create jobs while keeping more local
4 dollars in the economy.
5 We look forward to the Legislature's engagement
6 on this important topic. Thank you.
7 MAJORITY CHAIRMAN TAYLOR: Thank you.
8 Andrew.
9 MR. DAGA: Thank you, Chairman Taylor, Chairman
10 Keller, and Representative Quinn and Members of the
11 Committee for the opportunity to testify today in support
12 of House Bill 1446, the Clean Transportation Infrastructure
13 Act.
14 My name is Andrew Daga. I am the Chief Executive
15 Officer of Momentum Dynamics Corporation. Our company is a
16 leader in the new technology field of inductive or wireless
17 power transmission for the use of charging electric
18 vehicles. Momentum Dynamics is a Pennsylvania company
19 headquartered in Malvern, PA, where we employ 25, and soon
20 to be 50, engineers, and we are growing very rapidly.
21 Our company is unique in that it produces
22 high power wireless charging equipment, not only for
23 electric cars but also for electric buses, trucks, and
24 industrial vehicles.
25 I'm going to pause in my remarks to make a point, 105
1 because I think it has been overlooked that there is
2 multiple levels of complexity to this issue. We have
3 talked about taxes to regain money for building and
4 maintaining bridges and highways. We've talked about the
5 cost of infrastructure. We've talked about the cost of
6 electricity to the people who buy it and use it and who
7 will pay for all of those things. These are different
8 dimensions of the same problem. We are really concentrated
9 here on who is paying for the cost of the infrastructure
10 that will supply the energy to these vehicles, but the
11 other issues are very closely related.
12 I actually support Chairwoman Brown's comments
13 about socializing the cost of the electricity and the cost
14 of the infrastructure installation for reasons that I will
15 go to in a minute.
16 But I would point out that yet another level of
17 complexity is the new technology that is coming afoot. I
18 have just told you that we can transfer electricity through
19 the air and wirelessly charge an electric vehicle, which
20 makes the system automatic.
21 Very closely related to that idea is the issue of
22 vehicle-to-grid charging capability, which means power can
23 flow in both directions, from the grid to the vehicle and
24 from the battery of the vehicle back into the grid. Now,
25 this is extremely important to the utility companies of our 106
1 nation, because as we move towards renewables such as solar
2 and wind, we need grid storage capability near the terminal
3 edge of the electric grid. That will save billions of
4 dollars in new generation costs that does not need to be
5 built. It will save enormous amounts of money in frequency
6 regulation, and it provides a source of revenue that falls
7 back to the people who installed the installation equipment
8 in the first place, and possibly even to the owners of the
9 vehicles.
10 All of these models are still being examined.
11 They are not well understood yet, and we are part of that
12 process. And I would urge the Committee to keep an open
13 mind about all of these possibilities.
14 As we go forward, Mr. Chairman, let me point out
15 that the world has embarked on a massive technology-driven
16 transformation of transportation. In fact, the scale of
17 transformation is likely to dwarf the combined economic
18 growth that we saw with the Internet and the personal
19 computer, and I say combined, and those were big. We are
20 experiencing the smartphone revolution now and what it has
21 done for our economy, and this is even bigger than that.
22 This transformation centers around electric and
23 autonomously driven vehicles, the Internet of Things and
24 connected vehicles, and the migration away from liquid
25 petroleum fuels to cleaner sources of domestically sourced 107
1 energy. The modality of that energy will be electricity.
2 The result will be a vast improvement in public health and
3 a vibrant sustainable economic growth.
4 The problem with air pollution from cars is
5 nitrous oxides, which cause disease; sulfur dioxides, which
6 cause disease. No internal combustion engine on the market
7 today can get rid of those two problems. Set aside the
8 issue of carbon dioxide for a moment and think about the
9 disease that will be prevented as we move to electric
10 vehicles. This is in the greater public good.
11 I am here today to voice my strong support for
12 HB 1446, because I regard it as essential to the wide scale
13 market adoption of all forms of electric vehicles. Current
14 estimations as most recently published by investment
15 banking houses such as Morgan Stanley, Goldman Sachs,
16 Bank of America, and others point to a geometric growth in
17 electric vehicles.
18 Estimates are tending to converge on a consensus
19 view of at least 80 percent market penetration by all
20 electric vehicles in the world in 30 years. That means
21 more than 1 billion electric vehicles on the road by 2050.
22 Others are forecasting an even more rapid
23 adoption. As we speak, factories are being built to
24 manufacture these vehicles and mines are being opened to
25 provide the necessary metals that the batteries that will 108
1 be used to power them require. Hundreds of billions of
2 dollars are being invested each year to move this market
3 forward as fast as possible.
4 However, what has been lacking is the provision
5 of an adequate electric fueling system. We have the
6 generation, we have the transmission lines, we have the
7 distribution network, but we do not have a system that
8 allows automated and routine recharging of this growing
9 population of vehicles. What we don't have is the last
10 meter of connectivity.
11 It is my view that our electric utility companies
12 are the best positioned organizations to build out this
13 connection network in a safe and cost-effective manner and,
14 as such, in a way that best protects the public interests.
15 We take our electric utilities for granted, but
16 without them, our society ceases to function. They provide
17 the most robust and knowledgeable skillset, natural
18 skillset, to provide the capital and the installation
19 system for this new paradigm of electric fueling.
20 Mr. Chairman, it is my view that the future of
21 electric vehicles will see fueling shift from today's
22 manual gasoline station model to one that is much more like
23 the way we normally practice charging our cell phones. In
24 the so-called smartphone charging model, people will charge
25 frequently and opportunistically. We should not be looking 109
1 to the past practices of the last few years, but we should
2 be looking to the future to see how people really will
3 charge when we have 10, 20, and 30 percent market
4 penetration into the 16 million vehicles that are sold
5 every year in the United States. When that happens, it
6 will no longer be an issue of first adopters charging at
7 home, and let me get into that in a moment.
8 Indeed, a simple review of the nation's
9 demographics shows that residential EV charging cannot
10 support a large population of EVs since less than
11 60 percent of Americans have access to a garage. Some of
12 you mentioned you live on streets that don't have parking
13 garages or garages for your own homes. That is a large
14 fraction of Americans. It is a larger fraction of people
15 who live around the world. And cars are designed for
16 everyone around the world, not just for Americans.
17 Those people that do have access to a garage do
18 not necessarily had adequate power available in their homes
19 or along their streets to support the added load of
20 charging. What HB 1446 supports is the installation of
21 publicly accessible charging points. I would like to see
22 this legislation leave open the possibility for a
23 hybridized or creative tariff structure that allows a
24 sharing of revenue or a leasing system that involves the
25 retail arm of the utility companies to make this happen 110
1 more quickly, because right now, there is no provision to
2 allow a charging infrastructure to be built out quickly
3 enough.
4 We also believe that electric fueling must follow
5 the example of electronic toll collection such as E-ZPass,
6 where fueling needs to become a carefree and unnoticed
7 background operation that is automatically performed. This
8 can only be accomplished through automated wireless
9 charging. Moreover, as the world moves to adopt
10 autonomously driven vehicles, the necessity for wireless
11 automatic fueling becomes obvious.
12 I would also urge the Committee to recognize that
13 the advent of electric trucks, industrial vehicles, and
14 municipal buses is already underway. This is wonderful
15 news for our community for the reasons that I mentioned
16 earlier. It is also important to understand that this is a
17 very fast moving worldwide movement. Entire countries, as
18 you may be aware, including Germany, the UK, France, and
19 China, have already moved to completely outlaw the sale of
20 internal combustion engine vehicles.
21 Think about Germany. Forty percent of their
22 gross domestic product depends on the production of cars,
23 outlawing internal combustion engines by 2030. That's how
24 fast this is going to move. This country is going to be
25 hit by a wave, and we need to be prepared for it. 111
1 HB 1446 will be looked upon as model legislation
2 by other States and by the nation. I am very proud of
3 Pennsylvania for taking this leading position. By
4 supporting 1446, you will be securing Pennsylvania's
5 position at the forefront of this clean technology
6 revolution.
7 I strongly agree that Pennsylvania should adopt
8 an approach that brings transportation analysts, industry
9 experts, utilities, and local governments together to
10 develop integrated transportation electrification plans
11 that ensure public access to charging opportunities for
12 drivers and promote electrification in high value
13 public-purpose applications, and I therefore urge you all
14 to support this bill.
15 Thank you.
16 MAJORITY CHAIRMAN TAYLOR: Thank you, Andrew.
17 I will ask that, I think you just answered the
18 question that was posed earlier about whether or not there
19 were other States that were far ahead of us in terms of
20 legislation that's sort of trying to stimulate the market.
21 So it sounds like you think that is not the case.
22 MR. DAGA: I would agree that Pennsylvania is in
23 the lead with respect to involving the utilities into a
24 discussion about what their role will be and to get it into
25 a codified form that everyone else can understand and 112
1 follow. You may be ahead of California on this.
2 MAJORITY CHAIRMAN TAYLOR: Thank you.
3 Chairman.
4 MINORITY CHAIRMAN KELLER: Thank you,
5 Mr. Chairman.
6 Andrew, I'm just -- you're talking about wireless
7 charging.
8 MR. DAGA: Mm-hmm.
9 MINORITY CHAIRMAN KELLER: Do you still need a
10 charging station?
11 MR. DAGA: It's a different kind of charging
12 station. You don't see it. It's buried in the ground.
13 You pull your car over it, and it just recognizes your car
14 and charges it. No credit card swiping. It works like
15 E-ZPass.
16 MINORITY CHAIRMAN KELLER: But up to that point,
17 you would still have the same infrastructure costs as
18 everyone else?
19 MR. DAGA: That's where the utilities become
20 extremely important. One of the most expensive aspects of
21 any form of charging, plug-in or wireless, is the
22 infrastructure backbone, the power supply from the utility
23 company. If we can normalize that somehow.
24 And one of the benefits here is the economy of
25 scale that comes with utility construction work. So if we 113
1 can put 10 charging units into a "name your location" and
2 have one utility company provide the construction support
3 services to put that in, the costs will go down.
4 MINORITY CHAIRMAN KELLER: Thank you. I can't
5 wait to see these technologies.
6 MR. DAGA: Well, let me offer an invitation to
7 the Committee to come and visit our offices in Malvern.
8 MINORITY CHAIRMAN KELLER: I will ask the
9 Chairman. I would love to go see this.
10 He said come see it in operation.
11 Kevin, two testifiers said that they are okay
12 with the bill. You said you would like to see some
13 amendments to the bill. Have you had any conversations
14 with PECO or PUC about those changes you would like to see
15 or the prime sponsor of the bill?
16 MR. MILLER: Thank you for the question.
17 We haven't been shy. We think that, again,
18 ultimately, it's not a question of whether the utilities
19 have a role. They're already involved, and this is a bill
20 to provide an expanded role. So it's really a question of
21 how.
22 I mean, ultimately we agree that the PUC should
23 be calling balls and strikes. But right now, we're talking
24 about who should be setting the strike zone, and we don't
25 know that it's in the best interests of ratepayers or the 114
1 Commonwealth in general for that to be done by the utility.
2 So we are suggesting having a separate proceeding time
3 banded to make sure that we efficiently set the rules for
4 the road.
5 And that's something that Pennsylvania is in a
6 great opportunity and a great place to do. It's not the
7 first around the block. There are some examples from
8 California, Massachusetts, New York, a number of other
9 places, where those rules of the road have been set, which
10 then allows for utility programs to be considered by a
11 range of different interests.
12 But we have shared our thoughts and look forward
13 to continue doing so to find that right balance of
14 language.
15 MINORITY CHAIRMAN KELLER: So you have had
16 conversations with both entities.
17 MR. MILLER: That is correct.
18 MINORITY CHAIRMAN KELLER: And not much progress?
19 Do they understand your concerns or does the prime sponsor
20 understand the concerns you have?
21 MR. MILLER: I believe there's always an
22 opportunity to more clearly address and explain our
23 suggestions. Ultimately, I think the end goal is the same,
24 but in terms of how we get to that final language, that's
25 something that we look forward to continuing to have robust 115
1 discussions around.
2 MINORITY CHAIRMAN KELLER: Okay. Thank you.
3 MAJORITY CHAIRMAN TAYLOR: And I would suggest
4 that you have a bill, there it is, and so now is the time,
5 right?
6 Representative Quinn.
7 REPRESENTATIVE QUINN: Thank you.
8 And I want to thank you, Andrew, for the
9 invitation to go to Malvern. I hope the Committee
10 considers that, but I also hope we consider a trip to
11 Germany to see what's happening over there with all the -
12 you know.
13 MINORITY CHAIRMAN KELLER: This is 1980, I think.
14 REPRESENTATIVE QUINN: 1980. Okay.
15 My questions were for ChargePoint, but I think
16 that Chairman Keller just really summed it all up. You
17 know, we are here to listen, to learn from you. I
18 understand that this does give an expanded role for the
19 utilities, but my impression also has been that nothing in
20 this legislation restricts the ability of non-utility
21 charging equipment and network companies to develop and
22 install your commercial applications.
23 And from the beginning of your testimony, you
24 touted the expanse of your work in many different States
25 and nationally, and nothing has stopped -- I mean, I don't 116
1 see this infringing upon an industry that you have already
2 established here in Pennsylvania.
3 MR. MILLER: I think, if I understand correctly,
4 the question is, how would this impact ChargePoint or the
5 competitive market in general? Is that fair?
6 REPRESENTATIVE QUINN: Okay. Well, answer that.
7 Yeah.
8 MR. MILLER: Okay.
9 So we believe that when we talk about potentially
10 socializing costs for projects among ratepayers, there can
11 be an impact to competitive market actors. ChargePoint has
12 dedicated salespeople who are going out to develop
13 projects. And when we potentially introduce ratepayer
14 dollars into a competitive space, it's difficult to compete
15 with free, ultimately.
16 And so we don't think that there's never going to
17 be a case -- all right? -- for the utility to play a role.
18 REPRESENTATIVE QUINN: Mm-hmm.
19 MR. MILLER: We agree that there can and should
20 be one, and in some instances where there are higher
21 barriers to entry, we could identify where that would make
22 the most sense. So that's why we're suggesting having that
23 process.
24 The example was given for, you know, a dense
25 urban environment would be great for a utility charging 117
1 hub. Urban environments sometimes have the highest
2 utilization, and that's also a great place for the
3 competitive market.
4 So before we pick and choose and allocate which
5 part of the market one stakeholder should get, we're just
6 suggesting to have that process take place at the
7 Commission.
8 REPRESENTATIVE QUINN: Well, it sounds to me that
9 you have amendments or you will have them developed and
10 present them to the Committee.
11 MR. MILLER: We'd be happy to turn those in, and
12 if those had not been socialized, you know, that's an error
13 that I take full responsibility for. But we'll make sure
14 that the Committee has those after the hearing.
15 REPRESENTATIVE QUINN: And we very well might.
16 I'm not familiar with them, but that could be a fault of my
17 own.
18 I feel like with the immediate testimony that we
19 just heard, that we are like staring into the future. But,
20 you know, the future is upon us.
21 And it seems to me that, you know, I understand
22 the term "socialization" of these costs. It wouldn't have
23 been my first choice for the word, for the process. But if
24 we have this wave coming at us, I think Pennsylvania has a
25 responsibility to do what we can to position ourselves to 118
1 be able to work with the changes coming our way.
2 So I think we have touched on an important topic
3 here, and I appreciate everyone who has come out to
4 testify. And I look forward to learning more from you,
5 because it's a fascinating topic.
6 MAJORITY CHAIRMAN TAYLOR: Thank you.
7 Representative Kortz.
8 REPRESENTATIVE KORTZ: Thank you, Mr. Chairman.
9 And gentlemen, thank you for your testimony
10 today.
11 Mr. Miller, on page 4 of your testimony, you show
12 three different plugs, if you will. You show a Level 1
13 with 110 to 120 volts; Level 2, 208/240; but Level 3, the
14 DC Fast, goes up to 480 volts, so obviously a lot of power,
15 a lot of juice, a lot of heat, a lot of big wire gauge, I
16 would assume, in the plugs.
17 MR. MILLER: There can be.
18 ChargePoint's new station has liquid-cooled
19 cables, which are industry leading, so that you can avoid
20 having a massive cable to plug into a car. But there are
21 at those levels, you know, really high energy issues that
22 you need to deal with.
23 REPRESENTATIVE KORTZ: Okay. So you're telling
24 me there are three different types of plugs, which leads me
25 into my basic question. 119
1 Every 2 years, I get one of these phones, and
2 every plug is different. So are you telling me that we're
3 going to have to have multiple, multiple plugs to carry
4 around in cars for your different machines?
5 MR. MILLER: I think the problem is actually
6 worse than you identify, Representative. There are more
7 than three different types of connectors for EV chargers.
8 In Level 2, there are three alone, three different types of
9 standards. So you have got VHS, Beta, and Tesla, the
10 equivalent.
11 REPRESENTATIVE KORTZ: Okay.
12 MR. MILLER: So there are a lot of different
13 issues that the market is working out. Ultimately,
14 efficiencies will likely arise, but for now, the auto
15 manufacturers are identifying what's the best connector for
16 their needs. There are a number of different international
17 organizations looking at that.
18 But I agree. It is challenging. I have so many
19 cords that don't work anymore, but ChargePoint on our
20 station has multiple plugs.
21 REPRESENTATIVE KORTZ: So how many are there?
22 MR. MILLER: There are, for Level 2 charging,
23 that is a standard connector for Level 2. There is a
24 specific proprietary Tesla charger. On the DC Fast
25 charging side, there is SAE, a CHAdeMO. Tesla has its own 120
1 connector as well. There are potential adapters for one to
2 the other.
3 On our stations, we have multiple connectors to
4 make sure that no matter what car you drive up in, you'll
5 have access to the charging equipment.
6 REPRESENTATIVE KORTZ: Oh, boy. It sounds like
7 there's more to come.
8 MR. MILLER: Yeah.
9 And what's important to note here is that, you
10 know -- Representative Quinn, as you mentioned also -
11 we're looking into the future, and so in trying to guess
12 what it's going to look like today, that's where, you know,
13 we see some of the challenges: remaining flexible and
14 innovative to see, how can we meet these different
15 connector needs; but then also autonomous needs, what are
16 the different charging technologies or wireless charging.
17 Making sure that we provide that flexibility for
18 any potential ratepayer investment would be critical.
19 REPRESENTATIVE KORTZ: Yeah.
20 Well, one last question, if I may, Mr. Chairman.
21 You show this DC Fast charge up to 480 volts,
22 125 amps. It takes 15 to 45 minutes. Can you plug it into
23 a Tesla car or a Volt? I mean, that's a lot of juice. Can
24 they handle that kind of power coming in there with that
25 much heat? 121
1 MR. MILLER: So not every vehicle is going to
2 draw the same amount of power. The amount of power that
3 gets transferred is determined partly by what the charger
4 can do and partly by what the car can accept.
5 So as we see battery sizes increase or as we see
6 heavier duty electrification like buses and trucks, we'll
7 start to see more power coming through the charging
8 equipment.
9 So when we talk about the maximum capacity for an
10 EV charging station, that's where we are building in some
11 of that future proof nature. Because today, we're not
12 going to see a 400-kilowatt charge come through, but in the
13 future, if we're able to build up to that, having that
14 capability now is invaluable and also allows us to
15 electrify heavier duty transportation.
16 But it is a reason, as you are pointing to,
17 Representative, for having a real comprehensive look at
18 what different rate structures might need to be for fast
19 charging, because we're going to need to make sure that
20 drivers can get access to the charging and that they can be
21 done at times and in a way that benefits the grid and
22 doesn't put undue burden.
23 REPRESENTATIVE KORTZ: Does Mr. Daga have the
24 answer with the wireless?
25 MR. DAGA: I was just about-- 122
1 REPRESENTATIVE KORTZ: Can you fast charge, sir?
2 MR. DAGA: I was just about to ask if I could
3 elaborate and if it would be out of line, but thank you for
4 asking m e .
5 The obvious answer with wireless is that there is
6 no plug and there is no mismatch capability, so it's a
7 software function. So we modify the software and
8 everything fits, and there is no physical plug mismatch or
9 match capability issue.
10 But more to the point is this: Not every car can
11 sustain a 400- or a 350-kilowatt charging sequence, and one
12 of the big problems that people don't appreciate is that
13 you can charge at too high a power level, and if you do,
14 you will degrade the lifetime of your battery much more
15 quickly. It causes heating of the battery, which destroys
16 the chemical nature of the battery.
17 There is in fact a sweet spot for charging. It's
18 not 5 or 10 kilowatts in your home garage. That is very
19 slow and takes too long. So it's not, on the Goldilocks
20 scale, it's not good. Too high, where Tesla superchargers
21 tend to operate at about 145 kilowatt levels and even
22 higher than that, up to 350, can be done occasionally in a
23 very fast, rare opportunity charge.
24 If you're traveling from Munich to Berlin and you
25 need to charge along the way, or if you are traveling from 123
1 Philadelphia to Chicago, along the way out, you'll do that.
2 But you won't do it every day, because if you do, you'll
3 ruin the battery of your vehicle.
4 But if you charge at 50 kilowatts, which is
5 available at every convenience market and can be found in
6 every retail location that you can find that has 483 phase
7 power, your battery will last twice as long and you'll get
8 50 miles of new range added in a 15-minute experience.
9 That's the smart phone charging experience.
10 REPRESENTATIVE KORTZ: Thank you.
11 Thank you, Mr. Chairman. Sorry to take so long.
12 MR. DAGA: I'm sorry I took so long.
13 MAJORITY CHAIRMAN TAYLOR: No; it's pretty
14 fascinating.
15 Chairman Hennessey.
16 There you are.
17 REPRESENTATIVE HENNESSEY: Yes; I moved. Thanks.
18 Actually, Representative Kortz already asked the
19 very interesting questions that I had in mind, so I'll just
20 waive off.
21 MAJORITY CHAIRMAN TAYLOR: Representative
22 Donatucci.
23 REPRESENTATIVE DONATUCCI: Thank you,
24 Mr. Chairman.
25 And thank you, gentlemen, for being here today. 124
1 My colleagues have touched on a lot of the
2 questions I wanted to ask, but earlier they had talked
3 about we probably will be doing a lot of this with apps,
4 finding the places, paying for it. Are we going to be able
5 to do it with 2 or 3 apps, or are we going to need 10 or
6 15 apps? I ask, please.
7 MR. DAGA: One.
8 REPRESENTATIVE DONATUCCI: Yes?
9 MR. DAGA: One app.
10 REPRESENTATIVE DONATUCCI: You're sure?
11 MR. DAGA: Yep.
12 REPRESENTATIVE DONATUCCI: Because, you know,
13 we're talking four and five plugs.
14 MR. DAGA: There's a study out that has nothing
15 to do specifically with your question, but it's about how
16 many apps people tend to use on their phones, and the
17 maximum number anyone ever uses is 13. You might download
18 50, but you use 13 or less.
19 REPRESENTATIVE DONATUCCI: Okay.
20 And then as the electric amps increase, I guess
21 the companies are going to have to -- the electric
22 suppliers are going to need new grids and new
23 infrastructure?
24 MR. DAGA: Eventually, but that's probably
25 decades down the road, and they need time to watch and 125
1 plan. That's important.
2 REPRESENTATIVE DONATUCCI: Okay.
3 And my last is just a comment, because we were
4 talking about this will now bring about cleaner air and
5 environmental pluses. But with every new industry or every
6 new change comes more problems, and my big concern is, what
7 do we do with all these batteries?
8 MR. DAGA: Oh; they're recyclable.
9 REPRESENTATIVE DONATUCCI: Okay. That's great.
10 Thank you.
11 MAJORITY CHAIRMAN TAYLOR: Do you have anything
12 to add?
13 MR. FISHER: Yeah. Thanks, Chairman Taylor.
14 I was just going to add that, I mean, like any
15 new industry, there are some questions about standards,
16 right? There are a couple of different plugs. I mean, I
17 have a Nissan LEAF, and I have never encountered a charging
18 station where I have had an issue or where I haven't been
19 able to charge.
20 There is right now a few different apps, as
21 Mr. Daga talks about. They probably will consolidate to
22 one app. Right now, there are a few apps. There are
23 questions about the technology going forward.
24 I just wouldn't want those questions -- these
25 questions are typical of any new industry that is emerging, 126
1 and I wouldn't want, I think, these questions, for people
2 to take away from these questions that there is some
3 problem in the industry that we're all not trying to solve
4 and, therefore, we should maybe not proceed with this
5 legislation. I think the problems you are hearing about
6 are ones that the industry, you know, we're working with
7 ChargePoint and others to resolve all of these issues.
8 And it shouldn't be a reason to, you know, throw
9 our hands up and say there are too many issues. There are
10 really not that many problems right now for existing
11 consumers. And what little issues, inconveniences, there
12 are, they are being worked out.
13 MR. DAGA: The real issue, if I may, with your
14 permission, Mr. Chairman, is not physical or plug related
15 or even the inability of all of us to talk to each other.
16 It's that we need to allocate a vast amount of capital over
17 the next few decades to build this new system out. We're
18 talking about replicating the equivalent of the gasoline
19 fueling system that fuels all of our vehicles today.
20 There are 253 million registered passenger-duty
21 and light-duty vehicles in the United States that will
22 eventually be replaced. The average life or age of each of
23 those vehicles is 11.5 years. The rate of replacement is
24 going to increase rapidly. We do not have a charging
25 infrastructure that can handle that change right now. 127
1 Where will the capital come from to pay for this?
2 It will not come from tax dollars. It may come partially
3 from tax dollars. It may have to come from bond raises
4 that utility companies need to go to the major banks, like
5 Goldman and Morgan for, to get the money they need to build
6 out the charging infrastructure. That's mostly the way
7 this is going to happen, plus private money.
8 MR. MILLER: I would just put a caveat to all of
9 that to say that while there can be a number of different
10 parties involved in the market, I think the way that it was
11 characterized is backwards.
12 Right now, this is a private market in which a
13 number of different private actors are engaging and
14 deploying EV charging equipment and services. So as we
15 think about how we might want to expand the role for
16 utilities, just ensuring that at the end of the day, if
17 we're going to do so, that we create a strike zone that is
18 one that works for the Commonwealth of Pennsylvania and so
19 that we're not calling balls and strikes that are putting
20 fingers on the scale to pick winners in a market that is
21 rapidly shifting.
22 MAJORITY CHAIRMAN TAYLOR: That's our goal.
23 MR. MILLER: Thank you.
24 MAJORITY CHAIRMAN TAYLOR: Thank you,
25 gentlemen. 128
1 MR. DAGA: Thank you.
2 MR. FISHER: Thank you.
3
4 PANELS IV AND V:
5 RETAIL ENERGY SUPPLIERS
6 PENNSYLVANIA MOTOR TRUCK ASSOCIATION
7
8 MAJORITY CHAIRMAN TAYLOR: Our next panel is the
9 retail energy suppliers.
10 I'm going to ask Tony Cusati, State Chair for
11 Gas and Electric, the Retail Energy Supply Association, and
12 Ian Winner from Optimus Technologies -- and if Kevin,
13 Kevin Stewart, is here. Where's Kevin? Why don't you just
14 join this panel, and we'll have all three testimonies
15 together. Then we'll ask some questions.
16 Tony, if you're ready.
17 MR. CUSATI: I am. Thank you, Mr. Chairman.
18 Good afternoon, Chairman Taylor and Chairman
19 Keller and Members and staff of this Committee. I
20 appreciate the opportunity to provide this testimony at
21 this hearing regarding HB 1446.
22 My name is Tony Cusati, and I am the Director of
23 Regulatory Affairs for IGS Energy and the Chairman of the
24 Pennsylvania State Electricity Caucus and Natural Gas
25 Caucus of the Retail Energy Supply Association. 129
1 IGS is a licensed electricity and natural gas
2 supplier in Pennsylvania, as is the case for many of the
3 23 members of the Retail Energy Supply Association, or
4 otherwise known as RESA.
5 RESA is a broad and diverse group of retail
6 energy suppliers who share the common vision that
7 competitive retail energy markets deliver a more effective
8 and efficient customer-minded outcome than traditional
9 monopoly-protected utility regulation. RESA members are
10 devoted to working with stakeholders to promote vibrant and
11 sustainable competitive retail energy markets for all
12 residential, commercial, and industrial customers.
13 In 1996, there was a bill signed into law
14 regarding the Electricity Generation Customer Choice and
15 Competition Act, which restructured the State's electricity
16 industry to provide for customer choice among competing
17 electricity suppliers.
18 As a result, consumers are no longer captive to a
19 single monopoly-protected utility company for their
20 electric supply. Scores of retail suppliers now compete to
21 provide energy products to households, churches, schools
22 and universities, small businesses, and manufacturers,
23 offering innovative products and services specifically
24 tailored to meet the customer's needs and individual energy
25 circumstances. 130
1 While RESA is supportive of the goals of this
2 legislation to expand transportation electrification
3 statewide, RESA has some concerns about how this bill is
4 being proposed. RESA members see firsthand how the energy
5 landscape is changing based on their daily interactions
6 with customers and look forward to partnering with
7 businesses, consumers, and communities to support their
8 demand for EV infrastructure.
9 While RESA supports the overall theme of the
10 legislation to expand infrastructure for electric and
11 natural gas vehicles according to customer demands, RESA
12 has identified an important point which should be
13 considered in the context of Pennsylvania being a
14 restructured State.
15 The bill encourages electric distribution
16 companies to develop a regional framework to deploy
17 electrification infrastructure. RESA suggests that due to
18 the restructured market of the Commonwealth, the regional
19 framework process should be required to include
20 representatives from the retail electric supplier
21 community. Suppliers are already engaged in these issues
22 in other States and have taken on similar efforts.
23 The legislation seeks to give the utilities
24 cost-recovery mechanisms and rates to support and fully
25 recover "all reasonable and prudent costs incurred in the 131
1 implementation of" transportation electrification
2 infrastructure through distribution rates. This means that
3 all customers will be paying for EV infrastructure, as we
4 understand the bill as it is written right now, resulting
5 in higher customer bills to achieve this deployment. In
6 addition, allowing for recovery of these costs puts other
7 stakeholders, which would include competitive suppliers, at
8 a disadvantage since such cost-recovery mechanisms are not
9 available to them.
10 RESA members and other third-party companies are
11 already investing their own capital in transportation
12 electrification infrastructure as well as natural gas
13 infrastructures. These companies regularly make decisions
14 on where and how to deploy capital based on market
15 conditions and demand but do not have the advantage of
16 recovering any costs from their customers.
17 When the utility gains the right to recover costs
18 for such projects from ratepayers through cost increases in
19 distribution rates at no risk, interested parties and other
20 stakeholders are at a disadvantage. This recovery by the
21 utility does not provide a level playing field or
22 transparency for all players in the market.
23 In addition, the legislation requires that EDCs
24 shall not be subject to penalties for failure to meet their
25 goals. What incentives do utilities have to ensure that 132
1 the dollars they invest in such projects are prudent and
2 that they come within or below budget projections, since
3 their costs and returns are guaranteed?
4 It is for this reason that RESA urges that the
5 legislation be amended to eliminate the language that
6 provides the authority to allow utilities to seek cost
7 recovery for a transportation electrification
8 infrastructure development plan.
9 This legislation also addresses a natural gas
10 transportation infrastructure assessment to be completed
11 within 1 year of the effective date of the legislation.
12 Although there is little detail behind this section of the
13 legislation, RESA would like to make clear that utility
14 cost-recovery mechanisms and rates to support and fully
15 recover all reasonable and prudent costs incurred in the
16 implementation of a natural gas transportation
17 infrastructure is also problematic and something that we
18 could not support.
19 Thank you very much for the opportunity to speak
20 with you this afternoon, and we would welcome any questions
21 from the Committee Members.
22 MAJORITY CHAIRMAN TAYLOR: Thank you, Tony.
23 Ian.
24 MR. WINNER: Good afternoon, Committee.
25 Chairman Taylor, Chairman Keller, Members of the 133
1 House Transportation Committee, thank you for giving me the
2 opportunity to speak today.
3 I would like to briefly talk about an alternative
4 fuel we actually have not spoken about today, and that is
5 biodiesel. So I am here representing my employer,
6 Optimus Technologies, and we are located in Pittsburgh. We
7 design and build low-cost fuel system technology for
8 medium- and heavy-duty diesel engines to allow them to
9 operate on 100 percent biodiesel.
10 A little bit about biodiesel. It's a renewable
11 fuel produced and consumed here in Pennsylvania and
12 primarily made from soybeans grown in this State. It
13 reduces lifecycle carbon dioxide emissions by 80 percent or
14 more over diesel, and it also costs about 10 percent less
15 than diesel. A typical trucking fleet of 100 trucks
16 running on 100 percent biodiesel can save up to a million
17 dollars a year on fuel costs.
18 Biodiesel may actually already be the most widely
19 used alternative fuel for medium- and heavy-duty vehicles
20 in Pennsylvania. This is because all diesel fuel sold in
21 this State must be blended with 2 percent biodiesel.
22 Out of the 1.8 billion gallons of diesel that
23 was sold in the State in 2016, 36 million gallons of that
24 was biodiesel. This is a reduction of 676 million pounds
25 of carbon dioxide, which is the equivalent of taking 134
1 65,000 passenger vehicles off of the road for 1 year.
2 The majority of biodiesel sold was produced in
3 Pennsylvania by the companies HERO BX and World Energy.
4 While 36 million gallons is a significant amount of fuel,
5 there is capacity to produce even more. HERO BX and
6 World Energy have a yearly production capacity of around
7 80 million gallons and support hundreds of jobs in the
8 farming, fuel production, and transportation industries.
9 Much of the biodiesel sold in this State is sold
10 at pumps which blend biodiesel with diesel as the fuel is
11 pumped. These stations allow the blend ratio to be
12 customized for each transaction. This means that any truck
13 on Pennsylvania's interstate highways can utilize these
14 blending stations.
15 Any diesel truck can pump up to B20, which is
16 20 percent biodiesel blended with 80 percent diesel, in
17 warmer months, and trucks equipped with systems like ours
18 can pump 100 percent biodiesel from the same exact station.
19 They are also relatively inexpensive, on par with the cost
20 of traditional diesel stations.
21 We applaud and support House Bill 1446 for
22 working to advance the uses of alternative fuels in our
23 State. However, we think the bill needs to be inclusive of
24 all alternative fuels, including biodiesel. We would
25 encourage an amendment that either includes biodiesel 135
1 blending stations and the section in Title 74 as a
2 requirement, or require a statewide assessment of all
3 alternative fuels for vehicles rather than just natural gas
4 as stated in Title 66.
5 In conclusion, we believe that creating a network
6 of biodiesel blending stations on our State' s interstates
7 would allow an increase in jobs, an increase potentially of
8 revenues for the State through a mechanism like a P3, and
9 would allow every diesel vehicle to utilize a lower cost,
10 renewable, and clean-burning fuel.
11 Thank you for your time and attention, and I' m
12 happy to answer any questions you may have.
13 MAJORITY CHAIRMAN TAYLOR: Thank you, Ian.
14 MR. WINNER: Mm-hmm.
15 MAJORITY CHAIRMAN TAYLOR: Kevin.
16 MR. STEWART: Mr. Chairman and Committee Members,
17 thank you for the opportunity for me to be here today and
18 provide testimony on the Pennsylvania Clean Transportation
19 Infrastructure Act.
20 My name is Kevin Stewart. I'm President and CEO
21 of the Pennsylvania Motor Truck Association located in
22 Camp Hill, Pennsylvania. PMTA is a statewide trucking
23 association representing approximately 1,400 members, from
24 for-hire and private motor carriers to truck dealers and
25 manufacturers. 136
1 PMTA was organized to promote the common business
2 interests of persons engaged in the motor transportation
3 industry and is dedicated to effectively representing the
4 concerns of the trucking industry to members, government,
5 and regulatory agencies, and I promise you I will keep my
6 comments very brief.
7 Development of infrastructure that supports the
8 continued growth of electric and natural gas-powered
9 vehicles is imperative to our industry. A network of
10 fueling stations that are truck friendly allows for the
11 continued use and expansion of these technologies by fleet
12 operators and will extend our range of operation.
13 Additionally, natural gas and electric-powered
14 vehicles provide an opportunity to reduce our reliance on
15 foreign energy sources and the highly volatile oil market,
16 and we'll also be available to answer any questions.
17 MAJORITY CHAIRMAN TAYLOR: Thank you, Kevin.
18 Mr. Chairman.
19 MINORITY CHAIRMAN KELLER: No thank you,
20 Mr. Chairman. Well, one question.
21 To do the biofuels, do you have to change the
22 engine? Is there some adjustments that have to be made?
23 MR. WINNER: Yeah, there's a small change, and I
24 believe in my written comments there's a diagram of what we
25 actually do. 137
1 It's about a 7- to 10-hour install time, and
2 basically we're adding an additional fuel tank. So the
3 system starts on diesel, runs for about 10 percent of the
4 time while it's warming up the biodiesel, because one of
5 the issues with biodiesel is it gels in colder months, like
6 today.
7 And basically we add the additional fuel system.
8 There's a valve in the engine. It's all automated, so it
9 automatically knows when to switch over. The driver,
10 there's no loss in power. The driver doesn't have to make
11 any operational changes. He just has to fuel a separate
12 tank using existing infrastructure.
13 MINORITY CHAIRMAN KELLER: Thank you.
14 Thank you, Mr. Chairman.
15 MAJORITY CHAIRMAN TAYLOR: Representative Kortz.
16 REPRESENTATIVE KORTZ: Thank you, Mr. Chairman.
17 Mr. Cusati, thank you. A question for you, sir.
18 On page 2 of your testimony, down at the bottom,
19 you talk about the RESA members and other third-party
20 companies who are investing their own capital in
21 transportation electrification infrastructure. Are you
22 working with our Turnpike and are you working with our
23 PennDOT? Because you heard earlier today that they are
24 kind of stumped right now, that the Turnpike is looking for
25 some people to finish that. 138
1 MR. CUSATI: Yeah.
2 REPRESENTATIVE KORTZ: Have they reached out to
3 you or have you reached out to them?
4 MR. CUSATI: Well, to my knowledge, we have not,
5 Representative, but that doesn't mean that some of the
6 companies that are part of the RESA organization haven't
7 already at this point in time. That's something I could
8 check into and get back to you on.
9 REPRESENTATIVE KORTZ: Yeah. Obviously they are
10 stumped right now on six of their locations, so I would
11 appreciate if you would have a conversation.
12 MR. CUSATI: We'll do that. Yes, sir.
13 REPRESENTATIVE KORTZ: Thank you, Mr. Chairman.
14 MAJORITY CHAIRMAN TAYLOR: Representative
15 Hennessey. Chairman Hennessey.
16 REPRESENTATIVE HENNESSEY: Thanks, Mr. Chairman.
17 Gentlemen, I don't know who to address this to.
18 You can figure that out and answer whenever you're
19 comfortable with it.
20 But it seems to me that, you know, to some
21 extent we're talking about using taxpayer money to either
22 provide grants or to incentivize different companies to
23 create different types of infrastructure. You know, we
24 have slow-charge electric, fast-charge electric,
25 extremely-fast-charge electric, compressed natural gas, 139
1 diesel, biodiesel, regular gasoline. At some point in
2 time, isn't it incumbent upon us to sort of hit the brakes
3 and slow down until we find out whether or not one or the
4 other of these, or maybe just a few of these, the
5 technologies, really outlast all the others?
6 I think back a generation ago when we had Beta
7 and VHS tape recorders out there, videotape recorders, and
8 eventually Beta just went by the wayside because everybody
9 was buying VHS. You know, if we had invested in a Beta
10 system at that point, it would probably be a disservice to
11 our citizens, having just spent money poorly.
12 And we don't want to be in a situation like
13 Representative Kortz was talking about, all the different
14 charging wires that you have that don't fit any of the
15 plugs that are out there on the market today. Actually,
16 the citizens would be rather upset with us if we wasted
17 money on technology that sort of failed, or is destined to
18 fail, I should say.
19 Shouldn't -- I mean, what would you think if we
20 hit the brakes and, you know, just tried to see whether or
21 not there are one or two or three of these technologies
22 that actually rise to the surface and, you know, become the
23 future of fuel.
24 MR. CUSATI: Well, the way I can respond to that,
25 Representative, is, you know, we react to what the 140
1 competitive marketplace is looking for, and if the
2 technologies are out there to provide the service that we
3 feel we can compete in, we'll certainly do that.
4 Hence the reason why we have developed compressed
5 natural gas filling stations. We saw a need out there to
6 develop those stations because there was a need for the
7 consumer to utilize those stations based on the
8 technologies that they were using at that time. They
9 wanted to be able to save money. They wanted to be able to
10 drive their trucks and their cars longer, so we developed
11 those filling stations in order to meet that demand.
12 So I guess it has to deal with the competitive
13 marketplace and what the demand is on that side of the
14 fence.
15 REPRESENTATIVE HENNESSEY: I guess what I'm
16 asking is, you know, all the testifiers today have
17 presented us with different choices from their own
18 perspectives as far as what kind of -- what the future
19 holds as far as fueling the vehicles that we drive. But it
20 just seems to me to be a little foolish for us to invest
21 lots of taxpayer money in different technologies when some
22 are destined to fail, you know, because the consumers are
23 out there driving each of them and saying, I don't like,
24 you know, type A or fuel A; I want to move to a different
25 type of car, a different type of fueling system. 141
1 MR. CUSATI: Yeah; I can't disagree with you. I
2 agree that, you know, we need to be careful in that regard.
3 But at the same time, you know, it's a matter of supply and
4 demand. What is it that the consumer wants and the
5 consumer needs in order to fulfill their obligations for
6 the day?
7 REPRESENTATIVE HENNESSEY: Okay.
8 MR. WINNER: I would just add, I think to help
9 answer that question, would be section (h), subsection (h)
10 of Title 66 where you have, looking at the comprehensive
11 assessment of what alternative -- you know, right now it's
12 just stated as natural gas, but I think you open that up to
13 all alternative fuels and do a comprehensive assessment as
14 to, okay, how does the marketplace look now; where do we
15 see it going in the future.
16 And like you said, stepping back to do that
17 assessment I think is important.
18 REPRESENTATIVE HENNESSEY: Just one final
19 comment.
20 If I travel overseas--
21 MR. WINNER: Mm-hmm.
22 REPRESENTATIVE HENNESSEY: -- 1 don't expect the
23 nation that I'm visiting to have, you know, to somehow
24 provide me with the kind of power that I have at home. I
25 buy a converter kit and I take it with me and I essentially 142
1 take what they have offered me and then find a way to adapt
2 it so that my, you know, power razor or something, or
3 telephone, can charge. I don't insist upon, you know, the
4 particular nation providing every different choice that
5 might be out there.
6 I mean, it would just seem to me to be an
7 impossible situation for the State to try to anticipate all
8 the different changes that are coming down the road and
9 then trying to provide for the citizens' needs
10 individually. It just seems to me that there is some
11 obligation on the citizens to bring that converter kit with
12 them so they can pull up to a conventional type of charging
13 station and adapt, you know, through their own devices,
14 adapt the power to their car or truck.
15 Okay. Thank you.
16 Thanks, Mr. Chairman.
17 MAJORITY CHAIRMAN TAYLOR: Ian, just one last
18 question.
19 In trying to draw a distinction between what you
20 are proposing and what 1446 holds, I mean, what is the
21 infrastructure costs or what would be the development of
22 biodiesel?
23 MR. WINNER: Sure.
24 MAJORITY CHAIRMAN TAYLOR: I mean, because it's
25 liquid, right? So it's going to come through pumps. Is 143
1 that similar to what we would have now, or what would you
2 have to do differently?
3 MR. WINNER: Yeah; it's very similar to current
4 pumps.
5 Actually, one example. We are working with
6 Sapp Brothers, which they are a travel center off of I-80
7 up in Clearfield, and they have an existing tank that they
8 are modifying. It's an old diesel tank. They're modifying
9 it to be a public biodiesel blending station.
10 So if you already have the infrastructure in
11 place for diesel, you know, it's probably under $100,000 to
12 modify it. And it's relatively inexpensive compared to
13 technologies like natural gas. My understanding is, it's
14 perhaps over a million dollars for one natural gas station,
15 so it's significantly cheaper than that.
16 MAJORITY CHAIRMAN TAYLOR: Thank you.
17 MR. WINNER: Mm-hmm.
18 MAJORITY CHAIRMAN TAYLOR: Anyone else?
19 Mr. Chairman?
20 MINORITY CHAIRMAN KELLER: Thank you,
21 Mr. Chairman.
22 Again, this has been a very informative and very
23 needed hearing. Thank you again for picking the right
24 subjects for this Committee. I'm sure we'll hear a lot
25 more on this subject. 144
1 MAJORITY CHAIRMAN TAYLOR: Yes. And thanks to
2 this particular panel and all the folks that testified.
3 I think, speaking for the Committee, 1446 is a
4 good framework from which to work. Just as we try to deal
5 with automated vehicles and new cameras, we have to balance
6 between what would be seen as interference by government as
7 opposed to making sure that we are protecting consumers and
8 everyone involved.
9 So, you know, we had this hearing because we are
10 ready to act on this legislation and get this moving, and
11 if Andrew Daga is right, we better hurry up. So we
12 appreciate the testimony. I think it was fascinating for
13 us.
14 A little bit, you know, on the utility end. It's
15 not usually what we deal with, but I think it was an
16 educational process for our Members as well. So thank you
17 to all, and this hearing is adjourned.
18
19 (At 1:53 p.m., the public hearing adjourned.) 145
1 I hereby certify that the foregoing proceedings
2 are a true and accurate transcription produced from audio
3 on the said proceedings and that this is a correct
4 transcript of the same.
5
6
7
—/ ------8 Debra B. Miller
9 Transcriptionist