RESOLUTION OF THE BOARD OF TRUSTEES OF BLACK RIVER ELECTRIC COOPERATIVE, INC.
WHEREAS, on November 15, 2021, the Infrastructure Investment and Jobs Act of 2021 (“IIJA”) was enacted into law, amending the Public Utility Regulatory Policies Act 1978, as previously amended (“PURPA”), requiring both state-regulated electric utilities and certain non-regulated electric utilities (as defined under PURPA) to either consider or to establish a date to hold a hearing after public notice, within one year from the date of enactment (i.e., by November 15, 2022) thereof, following which the affected electric utilities are to consider the proposed standards as set forth in Exhibit “A” attached hereto (“Standards”);
WHEREAS, on or before November 15, 2022, Black River Electric Cooperative, Inc. (hereinafter “Cooperative”), a non-regulated utility, as that term is defined by PURPA, 16 U.S.C. §2602, initiated proceedings to make a determination whether or not it is appropriate for the Cooperative to implement either of the two new PURPA standards;
WHEREAS, the amendments to PURPA require the Cooperative to consider and make a final determination as to whether it is appropriate to implement the standards related to Demand-Response Practices and Electric Vehicle Charging Programs as more further detailed in Exhibit A to fulfill the purposes of PURPA, which are: to encourage the conservation of energy supplied by electric utilities; to optimize efficiency of electric utility facilities and resources; and to facilitate equitable rates for electric consumers; based on the evidence and comments submitted by Eligible Participants;
WHEREAS, as part of its consideration, the Cooperative is required to hold a public hearing process and issue a final determination, in writing, based upon the evidence presented at the hearing and upon findings specifically included in its written determination, and thereafter make that final determination available to the public;
WHEREAS, the Cooperative gave public notice by posting on its website the process to be followed to submit written comments on or before July 31, 2023;
WHEREAS, the only comments submitted were from J. Steven Shurbutt, P. E., GDS Associates, Inc. (“GDS”) on behalf of management and staff of Cooperative, which comments shall be made available to the public by posting it on the Cooperative’s website through and until December 31, 2023;
WHEREAS, the Board of Trustees is of the opinion that the public hearing process was conducted and notices provided in full compliance with PURPA;
WHEREAS, in considering each of the two new PURPA standards the Board of Trustees must make a determination “whether or not it is appropriate to implement such standard to carry out the purpose of this title” pursuant to 16 U.S.C.A. §2621(a)(2006);
WHEREAS, in making these determinations, the Board of Trustees has reviewed the written submittals and considered how implementation of these standards might affect the Cooperative and its Members in the areas of encouraging energy conservation by members, making efficient use of facilities and resources, and maintaining equitable rates to consumers, as well as conditions and circumstances specific to the Cooperative in reaching its conclusions;
WHEREAS, the current and planned demand-response and demand flexibility programs of the Cooperative, coupled with the Cooperative’s continued participation in the demand-response and demand flexibility programs of its generation and transmission provider, Central Electric Power Cooperative, Inc. (“Central”), are programs that promote demand-response and demand flexibility practices by commercial, residential, and industrial Members to reduce electricity consumption during periods of unusually high demand, to the extent that the Cooperative is reasonably able to do so based upon information available and circumstances specific to operation of the Cooperative; and
WHEREAS, the Cooperative, directly and indirectly through Central, has previously considered measures to promote greater electrification of the transportation sector in its service area and will continue to consider such measures, subject to such measures appropriately recovering the marginal costs of delivering electricity to electric vehicles and electric vehicle charging infrastructure; provided, however, none require specific action at this time.
NOW, THEREFORE, on this 23rd day of October 2023, the Board of Trustees hereby issues its final determinations on the implementation of the Demand-Response Practices standard and the Electric Vehicle Charging Programs standard as follows:
1. Demand–Response Practices: The Cooperative has implemented this standard, to the extent it is able to do so as an electric distribution utility, and has already adopted programs that promote demand-response and demand flexibility practices by commercial, residential, and industrial members to reduce electricity consumption during periods of unusually high demand.
2. Electric Vehicle Charging Programs: The Cooperative has implemented this standard, to the limited extent that Cooperative is able to do so as an electric distribution utility and Member of Central, and will continue to consider measures to promote greater electrification of the transportation sector as circumstances change and opportunities arise, subject to such measures appropriately recovering the marginal costs of delivering electricity to electric vehicles and electric vehicle charging infrastructure.
NOW, FURTHER THEREFORE, the Board of Trustees of the Cooperative, having completed the mandatory consideration of these two standards, shall cause this final determination to be made available to the public by posting it on the Cooperative’s website through and until December 31, 2023.
I, Caren Schwartz, Secretary of Black River Electric Cooperative, Inc., hereby certify that the above is a true and correct copy of a resolution adopted at the meeting of the Board of Trustees on October 23, 2023 at which a quorum was present and voted. I further certify that none of said resolution has been altered, modified, or rescinded. Done this 23rd day of October 2023.
Comments:
Black River Electric Cooperative, Inc. – Initial Comments
IIJA 2021 PURPA Standards – September 30, 2023
Table of Contents
Page
Introduction………………………………………………………………………………………3
PURPA Goals…………………………………………………………………………………….5
Black River Electric Cooperative, Inc………………………………….………………………5
Demand-Response Practices Standard…………………………………………………………7
Electric Vehicle Charging Programs Standard………………………………………………11
Conclusion………………………………………………………………………………………18
Appendices:
Appendix A – Excerpts from The Infrastructure Investment and Jobs Act of 2021
Appendix B – Central Electric Power Cooperative, Inc.’s Comments to Members
Regarding Their Determination of Implementing the PURPA Standards Under the
Infrastructure Investment and Jobs Act of 2021
Appendix C – GDS Associates, Inc. Qualifications and Experience
Introduction
The Infrastructure Investment and Jobs Act of 2021 (“IIJA 2021”) that was enacted
November 15, 2021, contains two new federal standards that must be considered for
implementation by all electric utilities with annual retail sales greater than 500 million kilowatthours during calendar years 2020 or 2021. Those new standards are in addition to the six standards
set forth in the Public Utility Regulatory Policies Act of 1978 (“PURPA”), the four standards
contained in the Energy Policy Act of 1992 (“EPAct 1992”), the five standards contained in the
Energy Policy Act of 2005 (“EPAct 2005”), and the four standards contained in the Energy
Independence and Security Act of 2007 (“EISA 2007”). The relevant sections of IIJA 2021 are
shown in Appendix A hereto. IIJA 2021 adds two new Federal standards to PURPA Section
111(d):
(1) Demand-Response Practices, 16 U.S.C. § 2621(d)(20),
(2) Electric Vehicle Charging Programs, 16 U.S.C. § 2621(d)(21).
The requirements of IIJA 2021 do not mandate that the affected electric utilities implement
those new standards; instead, PURPA states that “[e]ach state regulatory authority (with respect to
each electric utility for which it has ratemaking authority) and each nonregulated electric utility
shall consider each standard” and then “make a determination concerning whether or not it is
appropriate to implement such standard.” 16 U.S.C. 2621(a). Further, “[n]othing in this subsection
prohibits any State regulatory authority or nonregulated electric utility from making any
determination that it is not appropriate to implement any such standard.” Id.
The “baseline years” for the 500 million kilowatt-hour sales applicability threshold are the
one and two calendar years prior to calendar year 2022 during which the standards are being
considered. Black River Electric Cooperative, Inc. (the “Cooperative”) had annual retail sales of
approximately 676 million kilowatt-hours during calendar year 2020 and 684 million kilowatt hours during calendar year 2021, both well above the threshold of 500 million kilowatt-hours that
identifies which electric utilities must consider implementation of the PURPA standards.
The Cooperative is a nonregulated electric utility, which PURPA defines as “any electric
utility other than a State regulated electric utility.” 16 U.S.C. § 2602(9). Thus, it is the
responsibility of the Cooperative’s Board of Trustees (“Board”) to make its own independent
determination regarding whether to implement each of the new PURPA standards. That
determination must follow an appropriate consideration of the standards that includes evidence
presented during the course of a public hearing.
The purpose of these initial comments is to contribute to the body of evidence used by the
Board to make their determination on each of the two new standards based upon findings that are
appropriate for the members of the Cooperative. The federal legislation anticipates that state
regulatory authorities and nonregulated electric utilities would need to consider utility-specific
conditions and circumstances during their evaluation of the PURPA standards and determine the
ability of each utility to accomplish the goals of PURPA via the implementation of the two new
PURPA standards. For that reason, with respect to each of the two PURPA standards, the Board
may decide to implement the standard as stated in IIJA 2021, implement a modification of the
standard, or decline to implement the standard. Subject to the receipt and review of additional
evidence, if any, the following comments and recommendations address general considerations
regarding each of the two standards and specific issues and circumstances applicable to the
Cooperative that the Management and Staff of the Cooperative believe should be a part of the
Board’s deliberations.
PURPA Goals
The goals of PURPA continue to be the same as those stated in the original Public Utilities
Regulatory Policy Act of 1978, that is, to encourage (1) conservation of energy supplied by electric
utilities, (2) optimal efficiency of electric utility facilities and resources, and (3) equitable rates for
electric consumers. The first goal focuses on retail energy users and promotes conservation by
end-use consumers. The second goal applies to electric utilities, their use of energy, and the
facilities they utilize to deliver energy. The third goal recognizes the need for proper development
and administration of retail rates, providing a check and balance relative to the other two goals, so
that the programs, policies, and rates employed by electric utilities to achieve the first two goals
reflect their associated costs and are not arbitrary, unfair, or unduly discriminatory.
The Cooperative’s Board should make its determination regarding each PURPA standard
based on whether, given the Cooperative’s particular circumstances, that standard will accomplish
any one or more of those three goals, without harming the Cooperative’s ability to accomplish the
others(s). Thus, if implementation of a standard adversely impacts even one of the three goals, the
Cooperative’s Board may decline to implement that standard.
Black River Electric Cooperative, Inc.
The Cooperative has several organizational and operational characteristics that should
materially influence the Board’s consideration of the PURPA standards. First, the Cooperative is
member-owned and thus self-regulated. The Cooperative’s members elect the Board that
establishes and oversees the Cooperative’s policies, rates, service rules, and regulations. Unlike
investor-owned electric utilities, the Cooperative has no third-party investors to satisfy. Thus, there
is no conflict of interest between the utility’s owners and consumers regarding profitability. In
fact, the Cooperative is a not-for-profit organization. Revenues collected in excess of operating
expenses (such difference referred to as “margins”) are assigned back to the Cooperative’s
members as capital credits. Under this form of organization, all costs associated with the programs,
policies, and rates adopted to implement the PURPA standards will be borne in full by the
Cooperative’s members.
The Cooperative owns and operates an electric distribution utility. Unlike vertically
integrated electric utilities that also own and operate electric generation facilities and transmission
lines (together commonly called “bulk power systems”), the Cooperative does not make decisions
independently regarding the generation and transmission functions and the related costs incurred
to furnish electric energy to the Cooperative’s members. Instead, such bulk power system services
are planned and coordinated by the Cooperative and 19 other electric distribution cooperatives in
South Carolina through a generation and transmission electric cooperative, Central Electric Power
Cooperative, Inc. (“Central”). Central is governed by a Board of Trustees comprised of
representatives from each of those electric distribution cooperatives. It is through that participation
on Central’s Board of Trustees, as a “Member” and owner of Central, that the Cooperative has
direct input to and an active role in decisions made affecting generation and transmission issues.
Many years ago, the Cooperative and the other Members of Central executed a long-term
“all-requirements” wholesale power contract with Central. The term of that contract extends
through calendar year 2058. The Cooperative is required by contract to purchase from Central all
of the power that it distributes to its member-consumers. As later discussed herein, the
Cooperative’s status as a Member of Central and its wholesale power contract with Central are
significant contributing factors in the Cooperative’s consideration of the PURPA standards and
impact the Cooperative’s ability to implement the standards. Attached hereto in Appendix B are
comments prepared by Central that reflect Central’s input regarding the Cooperative’s
consideration of the two PURPA standards in IIJA 2021. Additional references to Central’s
comments contained in Appendix B are made herein, where appropriate.
Demand-Response Practices Standard
The first of the two new PURPA standards that the Cooperative’s Board must decide
whether to implement is the Demand-Response Practices standard, which states:
(A) In general. Each electric utility shall promote the use of demand-response and
demand flexibility practices by commercial, residential, and industrial consumers
to reduce electricity consumption during periods of unusually high demand.
(B) Rate recovery.
(i) In general. Each State regulatory authority shall consider establishing
rate mechanisms allowing an electric utility with respect to which the
State regulatory authority has ratemaking authority to timely recover the
costs of promoting demand-response and demand flexibility practices in
accordance with subparagraph (A).
(ii) Nonregulated electric utilities. A nonregulated electric utility may
establish rate mechanisms for the timely recovery of the costs of
promoting demand-response and demand flexibility practices in
accordance with subparagraph (A).
16 U.S.C. § 2621(d)(20).
The Board should view Part (A) of this PURPA standard in the context of the role it plays
in Central’s Integrated Resource Planning (“IRP”) activities. The IRP process consists of several
steps, starting with identification of basic objectives such as reliability of service, quality of
service, and meeting peak demand requirements. Next, historical and current data are collected to
examine the electric system’s load patterns and trends. Based on that information and other data
such as econometrics, demographics, and appliance saturation, a demand forecast is prepared to
determine the current and future power requirements. To meet those forecasted power
requirements, the IRP process considers and evaluates the utilization and management of two types
of resources generally categorized as supply-side and demand-side.
Supply-side resources for Central and its Members primarily consist of contracts to
purchase power from wholesale power suppliers, including renewable resources. Demand-side
resources for Central and its Members include active load management of customer appliances,
consumer and Member-owned distributed generation, passive load management via time-of-use
rates, and energy efficiency and conservation programs.
Demand-response and demand flexibility practices by consumers are facets of demand-side management. Electric utilities nationally and the Cooperative have promoted demand-response practices for many years, including the examples of both active and passive load
management of consumers’ electric loads just described. According to the US Department of
Energy, Office of Electricity, demand-response measures reduce or shift electricity usage during
peak periods in response to time-based pricing or other forms of financial incentives. By
comparison, demand flexibility practices are relatively new and, as described by the Alliance to
Save Energy, focus on “[t]he use of communication and control technologies to shift electricity
use across time of day while maintaining (in some cases improving) the quality and value of end-use services.” In that regard, according to The Brattle Group, demand flexibility includes demand-response, but “also more broadly includes new opportunities for managing load to provide a wider
range of grid services following the rapid emergence of consumer-oriented energy technologies
such as AMI, smart appliances, electric vehicles, behind-the-meter battery storage, behavioral
tools, and automated load control for large buildings.”
The PURPA standard specifies promoting practices by commercial, residential, and
industrial consumers to reduce electricity consumption during periods of unusually high demand,
which the Cooperative is considering or actively doing through several programs:
- A “Smart Thermostat” program is being promoted to residential consumers to help
them manage their energy use and reduce load on the electric grid at times of peak use.
Black River Electric Cooperative, Inc. Initial Comments
IIJA 2021 PURPA Standards September 30, 2023
GDS Associates, Inc. 9 - The “Water Heater Control” program pertains to residential consumers who install a
timer (load control switch) that turns off their electric water heater during periods of
system peak demand. - Under the Cooperative’s “Peak Alerts” program, consumers elect to receive notices of
peak load periods so they can voluntarily reduce their electricity consumption during
those periods. - Commercial and industrial consumers that meet certain load size criteria can receive
service under rate schedules containing demand-response price signals that include
coincident peak demand rates that promote and reward reductions in the consumer’s
capacity and energy consumption during periods when Central’s monthly system peaks
occur. - Rider LI applicable to consumers for irrigation service features a coincident peak
demand charge that promotes and rewards reductions in the consumer’s capacity and
energy consumption during periods when Central’s monthly system peaks occur.
These programs are some of the many demand response initiatives available to Central’s
Members that are described in Appendix B hereto.
Additionally, the Cooperative uses a wide range of ways to educate their members on the
benefits of energy efficiency, which, in turn, promotes reductions in energy consumption during
periods of unusually high demand. For example, the “Energy Smart” item under the “Beat The
Peak” link on the Cooperative’s website homepage includes “101 Ways to Save” regarding energy
efficient heating, cooling, cooking, and lighting.
Subpart (ii) is the portion of Part (B) of the Demand-Response Practices standard that
applies to the Cooperative. It permits the establishment of “rate mechanisms” that provide the
“timely recovery” of costs for promoting the practices described in Part (A). Rate mechanisms can
take many forms, including base rates, fees, surcharges, discounts, riders, cost adjustment factors,
and so on. The form of the rate mechanism for timely cost recovery will vary depending on the
practice being promoted. It should not unreasonably hinder the intended response from the
consumer, but it should reflect proper price signals that are aligned with costs, particularly
Central’s wholesale power costs. If these tenets are followed, along with the other generally
accepted principles of retail ratemaking, then demand-response and demand flexibility practices
can be promoted in a way that benefits the consumers participating in those practices, while not
adversely impacting (and perhaps even benefiting) the non-participants.
Impact on PURPA Goals
Regarding the three stated goals of PURPA, and in particular as to their application to the
Cooperative, Part (A) of the Demand-Response Practices standard is consistent with
accomplishing the first two goals of conservation of energy and efficient use of facilities and
resources, and Part (B) is consistent with accomplishing the third goal of equitable rates.
Furthermore, neither Part (A) nor Part (B) adversely impacts any of the three PURPA goals, and
there are no known inconsistencies between that standard and State law.
Summary
In light of the Cooperative’s current and planned demand-response and demand flexibility
programs, coupled with the Cooperative’s continued participation in Central’s demand-response
and demand flexibility programs, the Board should find in its determination of the Demand Response Practices standard that the Cooperative, to the extent it is able to do so as an electric
distribution utility and Member of Central, has already adopted programs that promote demand response and demand flexibility practices by commercial, residential, and industrial consumers to
reduce electricity consumption during periods of unusually high demand; and further, that the
Cooperative will continue to evaluate its current programs and opportunities for other programs in
the future to ensure that demand-response practices provide benefits to the Cooperative and its
members. The Board should adopt a finding to that effect.
Electric Vehicle Charging Programs Standard
The second of the two new PURPA standards that the Cooperative’s Board must decide
whether to implement is the Electric Vehicle Charging Programs standard, which states:
Each State shall consider measures to promote greater electrification of the
transportation sector, including the establishment of rates that—
(A) promote affordable and equitable electric vehicle charging options
for residential, commercial, and public electric vehicle charging
infrastructure;
(B) improve the customer experience associated with electric vehicle
charging, including by reducing charging times for light-, medium-, and
heavy-duty vehicles;
(C) accelerate third-party investment in electric vehicle charging for
light-, medium-, and heavy- duty vehicles; and
(D) appropriately recover the marginal costs of delivering electricity to
electric vehicles and electric vehicle charging infrastructure.
16 U.S.C. § 2621(d)(21).
Notwithstanding the specific wording that directs each “State” rather than each utility to
consider the standard, the Cooperative is including this standard in its IIJA 2021 PURPA
compliance process, with the caveat that the Cooperative’s ability to implement this standard is
limited to its own electric distribution system grid and service area.
To consider this standard, the Board must understand what is meant by “electrification of
the transportation sector.” “Electrification” in general is the switching (entirely or in part) from
technologies that use fossil fuels to those that use electricity with the primary goal of reducing
greenhouse gas (“GHG”) emissions. In regard to the transportation sector, electrification includes
replacing fossil fuels with electricity as the means of powering light-, medium-, and heavy-duty
vehicles. Electrification of the transportation sector may also provide benefits to electric utilities
by improving electric grid stability and providing opportunities for demand flexibility.
Unlike the first PURPA standard addressed in these Initial Comments that specifies action
(“shall promote”), this standard is more passive (“consider measures to promote”) in its
implementation. Perhaps the standard’s wording is intended to reflect the uncertain and fast-evolving nature of the electrification of the transportation sector, such that if adopted, this standard
could mean an ongoing, or periodic, effort to “consider measures.” In that regard, the
Cooperative’s Board could make a determination to implement the second PURPA standard an
then, after considering several measures to promote greater electrification of the transportation
sector, decide only certain of the measures are feasible at the present time.
There are many types of “measures” that could be considered, including consumer
education (website, presentations, demonstrations), participation in activities as a Member of
Central (programs, feasibility studies), partnerships with third parties (businesses, dealerships),
incentives (rebates, loans), and as identified in the standard, rates. Since Parts (A) through (D)
pertain specifically to the establishment of rates, the following comments will mostly address that
measure. It should be noted that the standard contains several broad terms that may lead to
conflicting, or at least competing, objectives. For example, the term “affordable” in Part (A)
implies a focus on consumers’ ability to pay regardless of the utility’s cost of service, whereas the
direction in Part (D) to “appropriately recover the marginal costs of delivering electricity”
recognizes the importance of the utility recovering the cost to provide service. Thus,
implementation of the standard might necessitate establishment of priorities for the various
objectives therein.
Part (A): Promote affordable and equitable electric vehicle charging options for
residential, commercial, and public electric vehicle charging infrastructure.
Part (A) contains the dual objectives of promoting affordable and equitable options for
electric vehicle charging. These objectives emphasize making electric vehicle charging available
throughout the Cooperative’s service area by employing rates that do not deter consumers from
acquiring and operating electric vehicles. Obviously, simply establishing lower rates will promote
affordability. To also be equitable, however, rates must still appropriately recover costs, as noted in Part (D) of this PURPA standard.
The dual objectives can be attained by establishing rates that encourage the use of electric
service for electric vehicle charging in a manner that is beneficial to both the consumer and the
Cooperative. Central’s wholesale rate structure that includes coincident peak billing demand
charges and time-differentiated energy charges provides opportunities to its Members for the
establishment of lower retail rates for energy sold to their consumers during off-peak periods. This time-of-use pricing is particularly applicable to residential consumers since most electric vehicle charging occurs at homes during the evening hours.
Although the Cooperative does not currently offer time-of-use pricing to its residential
consumers, the cost-based Facility Charge of $18.00 per month enables the Cooperative to employ a lower base rate Energy Charge that promotes affordable and equitable electric vehicle charging options for residential vehicle charging infrastructure.
The Cooperative’s Small Commercial Demand rate schedule employs a coincident peak
demand charge that provides opportunities for more affordable electric vehicle charging if that
charging can be managed. The Cooperative’s rate schedule applicable to large power consumers
does not contain time-based demand or energy charges, but nonetheless it does utilize a demand
charge based on the consumer’s monthly peak load. Since that demand charge recovers a portion
of the cost of service to the consumer, the energy charge is lower than it would be without the use
of demand charges. The lower energy charge promotes affordable and equitable electric vehicle
charging options for large power consumers able to charge their vehicles at times other than when
their own monthly peak load occurs.
Establishing affordable and equitable rates for public electric vehicle charging
infrastructure is more difficult because the power requirements are greater and the energy
consumption characteristics are difficult to predict. In particular, electric vehicle fast charging
stations typically have a high peak demand that requires a significant electric facilities investment
but a low energy consumption due to infrequent use. Further, that infrequent use might occur
during high cost peak periods. Those electric load characteristics create a high marginal cost of
electric service delivery that challenges the establishment of affordable rates for electric vehicle
fast charging stations that are also equitable in terms of cost recovery.
Part (B): Improve the customer experience associated with electric vehicle charging,
including by reducing charging times for light-, medium-, and heavy-duty vehicles.
Consideration of Part (B) of the standard must begin with recognizing some of the
significant aspects of the present customer experience associated with electric vehicle charging,
including the cost of charging, managing charging, range anxiety, and charging time. The
Cooperative’s role with respect to charging cost and management were addressed above in Part
(A).
The Cooperative has improved the customer experience associated with range anxiety and
charging time by installing and maintaining fifteen Level 2 charging stations in their service area.
The Cooperative is also currently improving the customer experience associated with
electric vehicle charging via the “Electric Vehicles” item on its website under the “Energy Smart”
link, which provides a wide range of information on electric vehicles, including potential savings
calculations, facts about electric vehicles, incentives and tax credits, and public charging station
locations and facilities.
Part (C): Accelerate third party investment in electric vehicle charging for light-,
medium-, and heavy-duty vehicles.
As previously stated, the Cooperative has installed numerous Level 2 charging stations in
its service area, but has not been contacted by third party investors regarding potential locations
public charging facilities. However, through its memberships in the Electric Cooperatives of South
Carolina, Inc. (“ECSC”) and Central, the Cooperative is participating in Docket No. 2023-121-E
before the Public Service Commission of South Carolina regarding the “Identification of
Regulatory Challenges and Opportunities Associated With Electrification of Transportation Sector
Pursuant to S.C. Code Ann. Section 58-27-265”. ECSC and Central submitted joint comments in
that proceeding earlier this year that mentioned the evolving and somewhat uncertain electric
vehicle landscape, the unique challenges from the electric vehicle sector faced by electric
cooperatives, the potential impact that the heavy demands of commercial electric vehicle charging
facilities can have on the utility’s infrastructure, and that electric cooperative consumers should
not be made to subsidize the cost of developing electric vehicle charging infrastructure.
Part (D): Appropriately recover the marginal costs of delivering electricity to electric
vehicles and electric vehicle charging infrastructure.
This final part of the standard provides a safeguard to ensure the rates established to meet
the objectives of the other three parts are sustainable and do not result in adverse financial impacts.
The marginal costs of delivering electricity to electric vehicles and electric vehicle charging
infrastructure might be higher or lower than the embedded costs that electric rates are typically
designed to recover. That is why any retail rates established by the Cooperative to promote greater
electrification should contain charges that are reasonably aligned with Central’s wholesale rates
and will recover distribution system costs based on the estimated load characteristics. It should be
acknowledged that in some cases appropriate recovery of marginal costs may result in rates that
lessen to some extent the affordability of electric vehicle charging and hamper the acceleration of
third-party investment in electric vehicle charging.
Impact on PURPA Goals
The Electric Vehicle Charging Programs standard that aims to “promote greater
electrification of the transportation sector” does not specifically meet the first stated goal of
PURPA, which is to encourage “conservation of energy supplied by electric utilities”. However,
“electrification” views energy conservation from a broader perspective than merely reduced
kilowatt-hours supplied by electric utilities. According to the Electric Power Research Institute,
“economy-wide electrification leads to a reduction in energy consumption, spurs steady growth in
the electric load, and reduces greenhouse gas (GHG) emissions — even in scenarios with no
assumed climate policy.” Thus, given the many benefits of electrification, the Board’s
consideration of this standard may include looking beyond the strict meaning of the first goal stated
in the original Public Utilities Regulatory Policy Act of 1978.
PURPA’s second goal of optimal efficiency of electric utility facilities and resources can
be achieved by the Electric Vehicle Charging Programs standard if the measures are considered
and implemented with that goal in mind, and not forsaking that goal when addressing specific
objectives stated in the standard such as improving the customer experience associated with
electric vehicle charging and accelerating third-party investment in electric vehicle charging.
Electric utilities have an opportunity to influence how the growing and evolving power
requirements of electric vehicles can be met in ways that make more efficient use of electric utility
facilities and resources. For example, the efficiency of existing facilities and resources can be
enhanced by measures promoting electric vehicle charging that is controlled during peak periods
or encouraged during off-peak periods.
The third PURPA goal of equitable rates for electric consumers is contemplated by Part
(D) of the standard that states the rates used to promote greater electrification of the transportation
sector should appropriately recover marginal costs. This facet of the standard is important in two
respects. First, rates that recover marginal costs provide reasonable and meaningful price signals
to influence consumer behavior in ways that support the first two PURPA goals. Secondly,
recovery of marginal costs precludes the measures implemented to promote greater electrification
of the transportation sector from being subsidized by utility consumers through rates that are
thereby inequitable.
Summary
The Cooperative has already considered and implemented measures to promote greater
electrification of the transportation sector in their service area. Going forward, adoption of the
Electric Vehicle Charging Programs standard does not require a specific action by the
Cooperative’s Board, other than to consider measures to promote greater electrification of the
transportation sector. Such potential measures as the Board deems worthy of consideration may
take many forms, including the application of rates that appropriately recover marginal costs. The
Cooperative will continue to evaluate its current programs and consider opportunities for future
electric vehicle charging programs that promote greater electrification of the transportation sector,
while implementing such measures subject to the recovery of the marginal costs of delivering
electricity to electric vehicles and electric vehicle infrastructure. The Board should adopt a finding
to that effect.
Conclusion
Based on the foregoing, the Cooperative’s Board should consider taking the following
action on the two new PURPA standards set forth in IIJA 2021:
Demand-Response Practices Standard—The Board should find in its determination of
the Demand-Response Practices standard that the Cooperative has implemented this standard, to the extent it is able to do so as an electric distribution utility and Member of Central, and has
already adopted programs that promote demand-response and demand flexibility practices by
commercial, residential, and industrial consumers to reduce electricity consumption during periods of unusually high demand.
Electric Vehicle Charging Programs Standard—The Board should find in its
determination of the Electric Vehicle Charging Programs standard that the Cooperative has
implemented this standard, to the extent it is able to do so as an electric distribution utility and
Member of Central, and that the Cooperative will continue to consider evaluating additional
measures regarding this PURPA standard, subject to such measures appropriately recovering the marginal costs of delivering electricity to electric vehicles and electric vehicle charging
infrastructure.
