Planning for a more electrified transportation future gained steam in Michigan this year with multiple spending plans totaling $85 million, as well as a series of in-depth policy discussions among a cross-section of stakeholders.
The challenge ahead is keeping that momentum moving with a new administration and batch of state lawmakers.
“That’s the most important question — we think there needs to be a roadmap for the new administration that lays out how we keep this momentum going,” said Liesl Eichler Clark, president of the Michigan Energy Innovation Business Council (MEIBC). “The urgency of this is really critical to keep Michigan as a mobility leader.”
After Consumers Energy withdrew the state’s first utility EV spending plan because of widespread criticism nearly two years ago, state regulators and advocacy groups led a flurry of work groups devoted to key questions around the sector.
Those questions included:
- Who should pay for EV infrastructure?
- How should it be built out to encourage EV purchases?
- How can those purchases be incentivized?
- How can charging be done that doesn’t strain the grid and disproportionately affect non-EV drivers?
Mike Alaimo, executive director of Clean Fuels Michigan, says developments over the past year are chipping away at those questions.
“I think there’s consensus around an electrified future,” Alaimo said. “Different companies are taking different business models, but at the end of the day, everyone agrees this is good for Michigan’s economy.”
His group also has met with political candidates about bringing separate “clean mobility” efforts into one coordinated campaign starting next year.
“When brought together, we can leverage these resources even further,” he said. “Clean mobility is the future of the auto industry. It’s coming, the rest of the world is moving there. We need to work on that to stay competitive.
“We’re seeing potentially more lawmakers coming to Lansing who are motivated to look at this as an opportunity to grow the state’s economy.”
Clean Fuels Michigan also backs legislation that was proposed this year offering partial sales tax and use tax exemptions for purchasing certain vehicles. If it fails to advance this year, Alaimo said it will likely be reintroduced in 2019.
“We see it as a strategic investment in this mobility technology,” he said.
In addition to policy planning, state and utility officials have put dollar amounts toward their initial investments. In rate cases pending before the Michigan Public Service Commission, Consumers and DTE Energy have proposed $7.5 million and $13 million for EV pilot plans, respectively. Most of the program costs are for rebates for customers who install chargers at home.
State officials also released a plan in late October to spend $64.8 million in settlement funds from the 2015 Volkswagen emissions scandal. States were awarded a total of $2.8 billion after the automaker admitted it had installed emissions control defeat devices to cheat emissions tests.
States were left to develop their own plans to mitigate harmful emissions from the transportation sector. Michigan’s will be done in four phases across a variety of sectors in the next decade.
The first phase will help pay to replace aging diesel school buses. Of the nearly $13 million designated for school buses, up to $3 million is carved out specifically for electric models while school districts are incentivized to purchase lower-emitting vehicles instead of new diesel models. Settlement funds also can be used to cover the costs of charging stations for school buses.
According to a September MEIBC report, the Volkswagen funds and utility pilot programs “are the most tangible drivers for action on EVs currently in Michigan. These initiatives and how they are deployed are crucial to deployment of EV infrastructure in the near term and are equally important in setting the stage for future, more widespread efforts.”
Consensus on policy
Groups across the Midwest spent the past year planning with stakeholders about EV policies. MEIBC hosted five sessions in Michigan on Volkswagen settlement spending, fast-charging stations, customer awareness, fleet electrification and rate design. Nearly 75 groups participated.
“It’s exciting to see how much excitement there is around mobility in Michigan,” Eichler Clark said. “We’re passionate about this work — it fits into the idea of electrifying everything. There’s still work to be done to knit together a vision for the future.”
MEIBC concluded in a report on the meetings that the two most pressing issues for the sector are including auto dealers as stakeholders “to provide insight into the economic drivers for that industry” and exploring potential business models for fast-charging station site hosts.
The Midcontinent Transportation Electrification Collaborative (MTEC) is convening stakeholders on a regional basis as most EV deployment takes place on the East and West coasts. While specific policies will vary by Midwestern states, the group offers a set of guiding principles that include designing programs that benefit all utility customers (not just EV drivers), the grid and a “competitive marketplace and consumer experience.”
Among the MTEC participants is General Motors, which last month made a controversial call for a national zero-emissions vehicle program. The company plans to have 20 new EV models by 2023.
Britta Gross, GM’s director of advanced vehicle commercialization policy, said in a call with reporters that the number of fast-charging stations will need to grow substantially to hit an anticipated 2 million EV penetration target by 2030 in MTEC states. Today, there are fewer than 66,000 EVs on the road in the Midcontinent region.
“We have a lot of work in front of us,” Gross said, adding that one of the major challenges is customer awareness.
“I can’t overstate the role of utilities enough, not only on education and awareness but preparing for what’s likely to be a large-scale deployment of EVs in the next two to four years,” Gross said.
One area where consensus also is growing: Utility programs should benefit all ratepayers, not just those who drive electric vehicles.
A key aspect in plans from Consumers and DTE is incentivizing EV drivers to charge during off-peak hours — when demand is lowest — to avoid the need for adding generation.
Doing so also puts downward pressure on rates. A 2017 report commissioned by clean energy groups showed cumulative benefits in Michigan alone could reduce electric bills by $800 million to $2.6 billion.
With policy and spending priorities taking shape around clean transportation in Michigan, advocates say 2019 will be a crucial year to put plans into action.
“This stuff is kind of coming together,” Alaimo said. “Put together, it does begin to put Michigan in a position where the state can lead in this really important space.”
MiBiz energy news coverage is supported by Consumers Energy, a public utility that provides natural gas and electricity to 6.6 million Michigan residents. For more information, visit consumersenergy.com. This sponsorship is advertising. It has no effect on editorial consideration in MiBiz.