MECO agrees to rework rates to own EVohana chargers

This story appeared in the The Maui News on Thursday, April 4, 2019

Maui Electric Co. agreed Friday to assume ownership of eight electric vehicle fast-charging EVohana sites across the island under a utility-ratepayer cost-sharing condition set by the state Public Utilities Commission.

On March 22, the PUC conditionally approved MECO’s proposal to take over the EV charging infrastructure at eight sites on Maui, operated by the Maui Economic Development Board. The decision and order, however, rejected MECO’s proposed rate schedule for EV charging, which would have left ratepayers with all the cost of capital improvements, about $1.2 million, and operations and maintenance costs of $180,000 annually, minus the revenues.

The impact on ratepayers was estimated at 19 cents a month and 14 cents with offsetting revenues, MECO said in its PUC filings.

In denying the rate schedule, the PUC asked MECO to return with a new schedule reflecting cost sharing, transitioning from ratepayers assuming 100 percent of cost in the first year to MECO assuming 100 percent by the fifth year.

MECO was given until last Friday to determine whether to come up with a new rate schedule or to drop the ownership effort as another deadline loomed. MEDB had partnered with Hitachi to create EVohana. Hitachi operated and maintained the assets through Sunday.

MEDB currently owns the existing fast-charging network that supports more than 300 of the approximately 1,000 EV owners on the island through its EVohana membership program, which was established through the JUMPSmartMaui demonstration project. The project — a cooperative venture between Japan, the state, county, MEDB, Hitachi and MECO — operated from 2011 to 2017 to exhibit smart-grid technologies that could enable the efficient use of renewable energy on an island grid.

At the conclusion of the project, ownership of the charging assets was transferred to MEDB at no charge to continue providing fast-charging options to EV owners, MECO said. MEDB and Hitachi partnered to form EVohana.

MEDB searched for new operators as the deadline approached. On Oct. 15, MEDB offered to transfer ownership of the stations to MECO at no cost.

The sites that MECO wants to take over are located at the Lahaina Aquatic Center, Maui Tropical Plantation, the county building on High Street, Queen Ka’ahumanu Center, Piilani Village Shopping Center, Haiku Community Center, Pukalani Terrace Center and Kulamalu Town Center.

MECO chose the sites because they are used often and are located in places with the largest driving range and numbers of EV owners.

The utility also planned to replace the existing systems with “dual port” chargers that can serve both domestic and international vehicles and expand maximum charging options from eight to 16.

At the five remaining sites that MECO will not take over, MEDB has said that it plans to offer site owners the option to operate the chargers independently or to remove them.

MECO told the PUC that it planned to begin taking over ownership of the first charger in July 2020 and the rest within six months. MECO would have no financial obligations until it takes over ownership of each charger.

In the interim, MECO said in its filing that MEDB would continue to own and operate the eight chargers with financial support from the Ulupono Initiative and Maui County. Ulupono would put in $200,000 and the county, $100,000.

On Monday, MECO said a community consortium involving the county, MEDB, Ulupono Initiative, Hitachi and Blue Planet Foundation was formed to develop a new long-term management model with the utility.

“Without a new owner and operator, the charging infrastructure and program would have been discontinued,” the MECO news release said. “The consortium agreed that having Maui Electric sustain the charging network would be most beneficial to current and future users and play an important role in integrating more renewable energy.”

In its PUC filing, MECO said its proposed rate structure was aimed at getting EV drivers to charge when solar power was most abundant in the daytime and not during peak-use evening hours. Charging during 5 p.m. to 10 p.m. would be 62 cents a kilowatt hour; 9 a.m. to 5 p.m., 49 cents a kWh, and 10 p.m. to 9 a.m., 60 cents a kWh.

While expressing support for the benefits of MECO’s involvement in maintaining the EVohana project and its role in the transition to renewable energy, the PUC said it “does not find MECO’s proposal to be fair to its customers.”

The PUC cited the lack of a market assessment and cost-benefit analysis by MECO and said that it “is unconvinced that MECO’s proposal to replace existing chargers with 16 ‘dual port’ chargers is the most cost-effective option or that such action is necessarily a prudent use of ratepayer funds.”

The commission also said that “it is not clear” that the charging rates “adequately incentivizes daytime charging.” MECO said it set proposed EVohana rates under the Commercial Public Electric Charging Service Pilot program.

The PUC instructed MECO to create a separate rate schedule for EVohana that “better aligns with MECO’s costs during the daytime period,” which would provide better incentives for EV owners to charge during midday hours.

When reviewing the new rate submittal, the PUC said it will consider whether it is appropriate to approve a new rate schedule for the EVohana chargers or to adjust the rates under the EV pilot program.

MECO said in its PUC filing Friday that it intends to refile the rate schedule after the “Electric Vehicle Network: Critical Backbone Study” has been completed. MECO expected the study to be completed in the second or third quarter of this year.

“With the high rate of EV adoption on Maui, we recognized that maintaining a publicly available fast-charging network was important,” said Sharon Suzuki, president of Maui County and Hawaii Island Utilities. “Having an established charging network helps to reduce range anxiety, provides charging options for EV drivers who don’t have the ability to install a charger at home and encourages more people to make the switch to EVs.”

The PUC said that it, too, views electrical transportation as an important component in the state’s energy goals, and “in general” agrees that MECO assuming ownership of the chargers will further state goals and “send a strong signal to the community that there is value in providing EV charging resources.”

But the PUC also “emphasizes the importance of appropriately allocating risk and reward between MECO and MECO’s ratepayers.”