There’s a hidden battle between electric utilities and gas pump owners that is going to change everything about the way we fuel up.
David reports on and coordinates coverage of the intersection of transportation and the electric grid for POLITICO's E&E News. He has written extensively on the trends and personalities that drive technologies like energy storage and solar power. He has also posted dispatches from India, Russia, Cuba and Puerto Rico, where he led coverage of the epic hurricane and blackout.
These pumps and plugs facing each other across the asphalt are also totems of an unseen battle. Two titans of the energy sector — electric companies and gas stations — have peacefully coexisted for a century but now find themselves vying for the right to serve electric vehicle owners. In just the last nine months, automakers have sold over 576,000 EVs, a 70-percent jump over the same period last year, according to auto-research firm Kelley Blue Book.
With Congress passing President Joe Biden’s bipartisan infrastructure bill — included $7.5 billion for electric-vehicle charging stations — the fight between gas stations and power companies for the growing EV charging market has gotten ugly. | Oliver Contreras/Sipa via AP Images The supply chain that underpins the gas station — starting in the oil fields of Saudi Arabia or Texas and flowing through intermediaries to that big price on the sign — becomes something else entirely in the EV age. What replaces it is a system of stupefying complexity. The price a station host pays for the new fuel is determined by which of America’s 3,000 electric utilities the plugs happen to be connected to.
The gas station arrived in the early 1900s, soon after the car itself, and quickly became a cutthroat game. Because the fuels they sold were nearly identical, sellers could differentiate themselves only by lowering prices. The only way to survive on those rock-bottom prices was to sell more gas. These imperatives drew fuelers to high-traffic intersections, where they broadcasted their prices from huge billboards.
Horse wagons full of goods under electrical utility poles in New York City in the 1880s. Unlike gasoline, high cost of wiring made utilities insulated from competition, with the electric grid deemed as an essential public service granted monopoly power and facing heavy regulations. | Sipley/ClassicStock/Getty Images
In a statement to POLITICO’s E&E News, Alliant said, “We are excited to be on the leading edge of electrification efforts and work hard to understand and meet our customers’ needs.” Angela Holland, president of the Georgia Association of Convenience Stores, explained it this way to Georgia lawmakers last year. Her 6,500 members “have to use the electricity from only one utility. If that same electricity provider is allowed to provide electric fueling stations …
“Honestly, I’m dreading it, but maybe there’s a silver lining,” said Bob Bajwa, the owner of a gas station in Ritzville, Wash., on the prospect of transitioning to EVs. He’s being somewhat optimistic given his personal experience. Bajwa already has one charging station — installed on his property in 2015 by charging provider EVgo — that gets only the occasional customer and produces almost no revenue.
One reason Kum & Go chose to put its station in Xcel’s territory, and not in Fort Collins or Poudre Valley, is the electricity bill. In particular, it comes down to one line item, a fee that homeowners know nothing about, but some businesses know only too well. A look at these power companies’ rates reveals why Kum & Go was motivated to put its EV chargers in Wellington. If four electric vehicles plug into Kum & Go’s four chargers at the same moment, they require the utility to summon 250 kilowatts. In Wellington, in the realm of power company Xcel, that kilowattage yields a monthly demand charge of $750. If the station moved south to Fort Collins, the charge rises to $2,672.
Profit isn’t yet an option. With expensive equipment and few users, the convenience store’s best outcome is to break even. “We’re trying to cover the cost of the electricity bill,” said Meier of Iowa 80, “and I think that’s all that anyone can expect at this point.” This multi-headed conflict has created lots of reasons for gas stations and utilities to confront each other. But no conflict has been as vicious as what happened in Washington, D.C., when billions of dollars were on the line.
In May, an ally of Kantor’s secured a spot to testify before the House Energy and Commerce Committee. A.J. Siccardi, the president of Metroplex Energy, the parent company of RaceTrac, one of the country’s biggest fueling chains, laid out a detailed agenda that would, at every turn, benefit gas stations at the expense of utilities.
The way the letter put gas stations at the center of electric fueling, while limiting the electric company’s role, made some in the utility industry furious. One person was particularly put out: Pedro Pizarro, the CEO of Edison International, the parent company of Southern California Edison, one of the state’s biggest utilities. Correa, the letter’s author, said he received a heated call from Pizarro.
“The c-stores and truck stops say sometimes that they’re uncomfortable” with the utilities’ regulated-monopoly model, said Phil Jones, a former utility regulator who heads a utility-heavy trade group, the Alliance for Transportation Electrification. “But we’ve told them that model is not going to change.”he gas station of the future might not have a single pump or even a whiff of gasoline. That’s because it might not be a gas station, but a Walgreens.
Meanwhile, Kum & Go is betting on a totally different scenario — one that it hopes will preserve the stature of the filling station in the roadside landscape. So it is possible that someday you will nip out to the gas station for a burrito bowl. Or maybe you won’t because the fueling station itself will have wandered off to Taco Bell, which just announced a new chain of charging stations in California. Or to Starbucks, which, as it happens, is creating a chain of its own between Seattle and Denver.
“The gravitational force of our position will require people to realize that without us, it won’t work,” said Fialkov of NATSO, the truck stop trade group.