State Plans for Funding EV Charging - a Closer Look

The Bipartisan Infrastructure Law (BIL) authorized more than $7.5 billion in grants for electric vehicle (EV) charging infrastructure, including $5 billion for the National Electric Vehicle Infrastructure (NEVI) Formula program. The NEVI grant provides states formula funding to support the installation of publicly accessible chargers, with the aim of building out a network of corridors with consistent highway access to EV charging.

All 50 states submitted their action plans for the NEVI grant program in August—clear evidence of broad interest in building out EV infrastructure. In September, the Biden administration announced that it had approved every state’s plan. States are starting to implement the programs, with some expecting to make funding available in the first half of 2023. This blog explores some of the different ways states are planning to use NEVI funding.

Contracting models

State governments are generally not planning to own or operate any EV chargers directly, instead setting up competitive grants to install and maintain chargers. Many of the contracting details will be decided during the implementation phase, but the state NEVI plans broadly outline some different models.

Some states already have significant experience contracting with multiple vendors to install and operate charging stations and plan to continue that model, coordinating new federal dollars with their existing programs:

• California already awarded over $1 billion in funding on a first-come, first-serve basis for eligible EV charging projects. Based on this experience, the state’s energy and transportation agencies plan to jointly develop a competitive grant, identifying gaps in the network where chargers are needed and allowing contractors to select installation sites that meet the state’s standards.
• Colorado, which also has experience administering EV charging grants, outlined a similar contracting model, awarding grants to private, public, and non-profit entities to build, own, operate, and maintain chargers, selecting grantees based on scoring criteria.
• Texas will invite vendors to identify installation sites within agency standards, building on its experience implementing EV charging infrastructure with settlement funds from Volkswagen. Vendors are then responsible for working with property owners, utilities, and municipalities to complete siting, permitting, environmental clearance, installation, and operation of chargers.

By contrast, Massachusetts plans to work with a single private partner to construct, maintain, and operate all of its charging infrastructure—though there are a range of options for this public-private partnership (P3) structure under consideration. It may include multiple subcontractors and site hosts for charging stations as well as a separate contracting approach to install a portion of its chargers on land owned by the state DOT.

Oregon is considering a similar P3 model. The state DOT has an office designated to developing P3s that plans to facilitate a partnership with one or multiple EV service providers—companies, such as ChargePoint, Blink, or EVgo, that develop, install, and operate chargers with various business models. While Nebraska outlined a primary contracting option of working with multiple vendors, it noted that a new state law allowing for transportation P3s could lead to an alternative process.

In its plan, Nevada laid out a different potential model involving a subgrant process with electric service providers, building on its Nevada Electric Highway program—a partnership between the Governor’s Office of Energy and two public utilities. In the previous program, electric utilities managed contractors and construction. Nevada will evaluate ways to allow new federal dollars to flow through existing programs managed by the utilities, with oversight from the state DOT.

Challenges for rural states

Federal standards require NEVI plans to locate charging stations every 50 miles along interstates and within one mile of an exit. However, several rural, western states requested exceptions, stating that federal guidelines do not fit with the reality of their state highway networks—which include long, remote stretches of highway without service or rest stops that are likely to have very low demand for charging.

For example, Wyoming’s plan claims that the federal requirements would not allow for a single station to be profitable until 2040 due to lack of use. Instead, the state seeks to deploy chargers near national parks, where it expects greater utilization. The state DOT requested 11 exceptions to requirements for station locations and was granted three. Wyoming’s plan also indicated it will not invest any state funds for charging infrastructure. Instead, matching funds will have to come from local and private entities—suggesting the state DOT believes that EV charging’s demand in Wyoming is uncertain.

State plans for Nevada and Arizona noted that their desert geographies, with underpopulated regions, pose challenges for fully building out alternative fuel corridors, with these areas at risk of hosting chargers that are stranded assets. North Carolina’s plan also emphasized the need for enhanced wireless service in remote locations—which charging stations need to set schedules, track data, and charge users.

Building capacity for the electric grid

States that still have low EV ownership raised concerns about a surge of new charging stations potentially overloading their electric grids. For example, after consulting the three utilities that make up its electric grid, Idaho’s DOT expressed concerns about the requirement that each charging station have 600 kW of power—estimating that almost all sites will necessitate system upgrades (installing transformers and new feeder lines).

Arizona’s DOT highlighted that peak hours of air-conditioning use could coincide with high volumes of electric charging use. The state DOT proposed using solar panels and battery backups for charging stations in case they cannot be supported during peak electricity hours. Several of Nevada’s highways have limited electric power, and it would be exceedingly expensive to expand the power supply in these areas.

Planning for resilience

For states prone to storms and other natural disasters, NEVI plans included special considerations for mass evacuations, as well measures to ensure that EV charging stations are durable and reliable in inclement weather.

States like Florida and Louisiana are preparing for tropical storms and flooding by implementing EV charging stations along major evacuation routes. Florida plans to waterproof chargers and elevate foundations to withstand storms and maintain operator safety. Alabama is also considering including portable, self-contained systems that will be able to temporarily provide power—such as solar power—to the electric grid in the case of an emergency.

The electric grid in California has sometimes been responsible for starting wildfires (and financially responsible for their impact). As such, in recent years, utilities have begun shutting off power without notice during high winds to prevent wildfires. The California NEVI plan highlights potential strategies to allow drivers to charge their EVs during scheduled and unscheduled outages, including grid-independent charging stations.

Conclusion

Transitioning the country’s entire vehicle fleet from gas to electric vehicles is a massive national undertaking, and each state faces unique challenges to facilitating that transition. With soaring demand for EVs, increased gas prices, and the Biden Administration’s desire to make progress on national climate goals, the stakes are high. Now that the federal government has approved all 50 state plans, states are in the driver’s seat to make sure that EV charging deployment is impactful, efficient, and equitable. Fortunately, the state NEVI plans make clear that a great deal of careful strategizing and consideration has gone into addressing challenges and seizing opportunities presented by new federal grant dollars.