The transportation sector is the largest greenhouse gas emitter in the U.S., making electric vehicle (EV) adoption crucial for climate goals and air quality improvement. Public DC fast charging infrastructure is essential for widespread EV adoption, particularly for drivers without home charging access.

However, electricity costs, especially demand charges, pose significant challenges for charging station operators. Based on extensive experience, here are seven key principles for effective EV charging rate design:

1. Make Alternative Rates Optional

• Accommodate different charging use cases
• Allow customers to choose from multiple rate options
• Promote healthy competition

2. Minimize Demand Charges

• Replace with time-varying volumetric rates
• Reduce financial uncertainty for operators
• Encourage charging during grid-beneficial times

3. Leverage Existing Low-Load Factor Rates

• Utilize rates designed for similar "spiky" loads
• Include rates used for agricultural, religious, and sports facilities
• Provide simple, effective solutions

4. Include All Customers

• Apply rates to both new and existing charging stations
• Encourage continued infrastructure investment
• Maintain fairness across the market

5. Differentiate Between Use Cases

• Consider workplace, public, and fleet charging scenarios
• Maintain access to base rates for all customers
• Develop specialized rates where appropriate

6. Ensure Long-Term Rate Certainty

• Implement 10-year rate horizons
• Enable informed investment decisions
• Support long-term planning

7. Avoid Subscription Charges

• Limit fixed-block demand payments
• Reduce barriers to market entry
• Maintain flexibility for operators

The Infrastructure Investment and Jobs Act (IIJA) requires states to consider measures promoting transportation electrification, including rate structures that encourage third-party charging investment. As utilities implement these principles, we'll see increased charging infrastructure deployment, accelerated EV adoption, and progress toward sustainable transportation.

Studies in states like Arizona, New Mexico, Colorado, Florida, Minnesota, Nevada, and Michigan demonstrate that transportation electrification can reduce electricity bills for all utility customers, while addressing environmental concerns.

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