Electric Vehicle Infrastructure in Maryland; And it’s Effects on the Transportation Trust Fund

Embed Size (px)

Citation preview

  • 7/28/2019 Electric Vehicle Infrastructure in Maryland; And its Effects on the Transportation Trust Fund

    1/16

    Electric Vehicle Infrastructure in Maryland;

    And its Effects on the Transportation Trust Fund

    Jason M Boothe

    Towson University

    GEOG 393

    Fall 2011

  • 7/28/2019 Electric Vehicle Infrastructure in Maryland; And its Effects on the Transportation Trust Fund

    2/16

    1Electric Vehicle Infrastructure in Maryland

    December 17, 2011

    Introduction

    In recent years a new sector in the

    automotive industry has started to expand, that

    being the sector of electric vehicles (EV). This push

    towards greater usage of these vehicles is in part is

    to lessen the impact on the environment from

    traditional gasoline powered vehicles and to lessenthe influence of petroleum as a source for fuel for

    the transportation sector. Currently these vehicles

    are in limited quantities and available in select

    markets through the United States. But as the

    number of manufactures increases and the number

    of consumers adopting these vehicles as their

    mode of transportation increases, the demand and necessity for charging stations located

    outside of the home will also increase. With the current limited availability of charging stations

    to support these vehicles, an infrastructure will need to be built out. This includes not only the

    stations themselves, but also possible changes to the power grid to supply these stations.

    There is a question as to what level should the government be involved in the build out

    of this infrastructure and more particularly should funds from the Transportation Trust Fund

    (TTF), on the state level, be used to finance the build out of this infrastructure. If not the state

    then that will be the supplier and financer of this infrastructure build out and power supply. Also

    with the fuel of choice being electricity it removes a significant portion of the vehicles operation

    from the fuel tax, being that gasoline is not involved, so is their a way that this class of vehicles

    can still adequately fund the TTF?

  • 7/28/2019 Electric Vehicle Infrastructure in Maryland; And its Effects on the Transportation Trust Fund

    3/16

    2Electric Vehicle Infrastructure in Maryland

    December 17, 2011

    Contents

    Introduction .................................................................... 1

    Contents ......................................................................... 2

    EV Infrastructure ............................................................ 3

    Electric Vehicles ................................................. 3

    Electric Power Grid ............................................ 3

    Charging Stations .............................................. 4

    Funding and Taxation ..................................................... 6

    Infrastructure Costs and Funding ...................... 6

    Taxation and the Trust Fund ............................. 7

    No Change ........................................................... 7

    Capture at the Pump ........................................... 7

    Tolls ..................................................................... 8

    Fees and Taxes ..................................................... 8

    Vehicle Miles Traveled/Road Usage Tax .............. 8

    State Initiatives ............................................................. 10

    Maryland ......................................................... 10

    Connecticut ...................................................... 10

    Virginia ............................................................ 11

    Indiana ............................................................. 11

    Conclusions ................................................................... 13

    Bibliography .................................................................. 15

  • 7/28/2019 Electric Vehicle Infrastructure in Maryland; And its Effects on the Transportation Trust Fund

    4/16

    3Electric Vehicle Infrastructure in Maryland

    December 17, 2011

    EV Infrastructure

    As stated in the introduction, an infrastructure is required to make possible the charging of

    Electric fueled vehicles. This infrastructure can be broken down into three parts; the first part is

    the vehicles themselves, the second part is electric power grid, and the third are the charging

    stations.

    To understand the requirements of the build out a basic knowledge of its parts are required, inthis section we will review these parts.

    Electric Vehicles

    Electric Vehicles or EVs are general put into two classifications. The first is the Battery Electric

    Vehicles (BEV). BEVs are vehicles that run exclusively on electric powered and do not include a

    gas combustion engine. During operation, a battery pack in the vehicle provides the fuel to the

    drivetrain, which is an electric motor. As the car is used the amount of fuel stored in the

    batteries decreases and refuel in the form of a recharge is required. A common issue with this

    class of EV is the range that one can operate the vehicle, and the time it takes to recharge the

    batteries. BEVs are refueled by way plugging in the vehicle into a Vehicle Charging unit.

    Charging time is dependent on the type of battery in the vehicle, the charging unit being used,

    Generally speaking BEVs have a range of about 100 miles, but this can vary depending on the

    performance of the driver, driving conditions, and the car its self. Cars in this class are the

    Nissan Leaf, Mitsubishi iMiEV, and Tesla Roadster.

    The second type of EV is the Plug-in Hybrid Electric Vehicle (PHEV). Like the BEV, this class of

    vehicle has an electrical socket and battery pack that allows for charging and operation of the

    vehicle. While the battery packs on these vehicles are typically smaller then in BEVs, and thus

    would have a corresponding shorter range, this class of vehicles come equipped with a gasoline

    power engine that acts as an on board generator, providing additional energy while driving to

    the electric drivetrain. Because of this on-board generation setup, a PHEV can theoretically

    travel at a range similar to if not greater then a traditional gasoline powered vehicle, depending

    on conditions. Vehicles in this class would include the Chevrolet Volt

    Electric Power Grid

    The electric power grid in terms of EVs refers to the generation of electricity and transmission

    of that electricity to the charging stations. Without going into the specifics of how electricity is

    generated, the process to get power to charging stations, involves generation stations, the

    transmission of energy to the grid, and then the distribution of the energy from the grid to the

    stations. In May of 2011 consulting firm M.J. Bradley and Associates prepared a study

    highlighting the relationship and issues present for the Electric Utility sector in regards to EV

    infrastructure.

    The report generally gave a positive slant for the industries involvement, citing that a return on

    investment would be expected. It stated that the cost to upgrading existing distribution

    networks to handle the increased usage of the networks would be offset by an increase in

    consumption revenue, concluding that infrastructure was not a barrier. However the study, as

  • 7/28/2019 Electric Vehicle Infrastructure in Maryland; And its Effects on the Transportation Trust Fund

    5/16

    4Electric Vehicle Infrastructure in Maryland

    December 17, 2011

    well as several of the state studies, did point to some existing concerns with the electric

    infrastructure. The primary point of concern is an increase in the load factor, depending on

    equipment, and time of year (summer/daytime). All of the studies however point to this issue as

    being addressable in time to meet the demand of increased EV usage, and propose two ways to

    solve it. The first way is an upgrade to the grid network from what is being in use now to a Smart

    Grid. While some of this happing already, with the slow roll out of EVs the industry believes that

    there is time to make the required Smart Grid upgrades for when demand increases. Anothersolution proposed by the Utility industry would be to charge varying rates depending on the

    load factor and the time of day, for example a higher charging rate charge during the daytime as

    opposed to at night. It is speculate that this could help in reduce load on the grid by incentivizing

    EV owners to charge their vehicles at times when the load on the gird is low. It has also been

    suggested, and in some cases applied, that alternative energy solutions be used, such as solar

    and wind, as a way to power EV charging stations to not only reduce the influence of fossil fuels

    in the EV charging process, but also as a way to reduce the load that would be attributed to the

    charging stations on the grid.

    While there are some other minor issues with some utilities present, the overall sense is that

    the Electric Utilities would be on board with the expansion of the EV infrastructure as long as

    there is a potential for a return on investment. Case in point, in a study done by the State of

    Connecticut, several utilities in the state were cited in the report for initiatives that they have

    already undertaken in regards to EV infrastructure.

    Charging Stations

    Charging Stations are the designated places in which EVs will refuel their batteries. These

    charging stations can be located at residences, parking structures, places of business (in the

    designated parking area), as well as street level public parking areas. Existing zoning laws as well

    as other ordnances and regulations may regulate, depending on the jurisdiction, the location

    and set up of these charging stations. In the United States there are three classifications of

    charging stations. The first two classes are low voltage, low wattage, and AC trickle charge

    systems. Currently these are the most prominent of the existing charging network. These

    chargers also the longest time, measure in hours, to fully recharge an EV. The third class is the

    so called quick charge system, named such because of the fact that it recharge a vehicle in less

    then half the time of the other two classes of chargers, around 30 minuets on average. These

    chargers use a high voltage and a higher kilowatt load then the other two classes, as well class

    three chargers are DC current as opposed to AC current in the other two classes. The chart

    following shows a break down of the three classes of chargers.

  • 7/28/2019 Electric Vehicle Infrastructure in Maryland; And its Effects on the Transportation Trust Fund

    6/16

    5Electric Vehicle Infrastructure in Maryland

    December 17, 2011

    Several studies examined have shown some issues with these various charging stations beyond

    permitting and instillation issues. For level one and two stations, it is the time involved in the

    recharging of the vehicle battery, only making it convenient for overnight charging. Level three

    though poses a far more ranging sent of issues. The Bradley Utility Study pointed out that level

    three stations would represent a risk to the return on investment of Utility companies, due to

    the high cost of the units ($2000 on average for a level two compared to $5000 on average for a

    level three) and the low per kilowatt charge rate. Another issue for the class three units is

    standardization and usability. While there is a standard adapter for the class one a two charging

    systems, there has yet to be an approved standard for the class three units. This lack of

    standardization has led to class three plugs not being available on all vehicles, for example the

    Nissan Leaf does have a class three input where as the Chevrolet Volt does not (it should be

    noted due to the class three using DC and the other two classes using AC the same input can not

    be used because of technological difference in the way the car is charged using the two different

    current types). One other issue that has been raised with class three chargers is a safety issue,

    due to the use of DC current. However this issue has not been fully explored or explained.

  • 7/28/2019 Electric Vehicle Infrastructure in Maryland; And its Effects on the Transportation Trust Fund

    7/16

    6Electric Vehicle Infrastructure in Maryland

    December 17, 2011

    Funding and Taxation

    Infrastructure Costs and Funding

    The investment in EV charging infrastructure requires some substantial up front costs. These

    upfront costs come in the form of land acquisition for stations, construction of the stations, cost

    of the charging equipment, permits, and other miscellaneous expenses.

    Studies done by the State of Connecticut and Virginia Clean Cities, the estimate coast of a class 2

    public charging stations is from $7,500 to $8,030 per charging unit, this includes the unit,

    installation, and other associated fees. This makes for charging stations being a significant

    infrastructure expense. In the initial roll out of charging stations significant grant monies was

    distributed from both State and Federal, as well as some local sources, to help finance these

    stations. However due to the costs associated with these charging stations, the continued full

    financial support of government may be seen as unfeasible, particularly in a time of austerity.

    In general though however, many charging stations have been built out on private land by

    private developers. It is becoming more and more common to see charging stations in parking

    lots, parking structures, multi-unit residential communities, et al. Developers see the instillation

    of these units as a potential incitement to owners of EVs to visit their communities. However in

    general the developers do not own the charging units, the property on which they sit is leased

    out to another company that builds the charging station, maintains it, and charges (when one is

    assessed) for its use.

    When it comes to charging stations on public lands, states have general taken hands off

    approach. For the most part it has been local governments that have been leaders in the

    expansion of EV charging stations, by making zoning changes and simplifying the permitting

    process. Several municipalities, including Baltimore, have teamed with EV charging companies

    such as ChargePoint to lease space for EV charging station in public parking facilities own by thecity. 1

    This is not to say that the state are not involved. States have allowed similar insulations of

    charging stations at their own parking facilities. However states have played the more significant

    role as a financial facilitator for the build out of charging stations. States have provided both

    grant money as well as low interest loans as a direct investment in EV infrastructure. States have

    also instituted gracious tax rebate programs to both charging station owners and to developers

    that allow for the installation of charging stations on their property. No instance have I found in

    which TTF funds were used for EV infrastructure, though I cannot say for certain that it has

    never happened?

    1

    http://weblogs.baltimoresun.com/features/green/2011/10/ev_chargers_debut_in_bmore_cit.h

    tml

  • 7/28/2019 Electric Vehicle Infrastructure in Maryland; And its Effects on the Transportation Trust Fund

    8/16

    7Electric Vehicle Infrastructure in Maryland

    December 17, 2011

    Taxation and the Trust Fund

    In the State of Maryland as well as other states, a significant percentage of funds coming into

    the TTF are generated from imposition of a per gallon tax on the purchase of gasoline and diesel

    fuel. As the number of vehicles on the road switch from being gas powered to that of fully

    electric (BEVs) or partial electric and gasoline (HEVs) the amount of funds captured from the

    gas tax is speculated to decrease. This is in part from not only the decrease in consumption of

    gasoline products in general, but as well as an increase in efficiency of gasoline poweredengines. With the current backlog of transportation projects, particularly from a lack of funding,

    and the ever increasing costs of maintaining the current transportation infrastructure as well as

    expanding it to meet future demands, the question becomes how will the state recoup its the

    potential losses to the TTF because of the decrease in capture from the current gas tax

    structure. Currently, per my research, only two states, Oregon and Washington, have moved

    forward on the legislative side with an EV tax proposal to supplement gas tax losses to their

    respective TTFs

    No Change

    The first of the scenarios is that of the No Change scenario. In this scenario there would be nochange to the current funding mechanisms, the existing gas tax structure would remain in place.

    With this structure most EVs would be paying little to no gas tax. Essentially when not taking

    into fact registration fees and tolls, EVs would be traveling on state and federal highways for

    free. As the percentage of vehicles on the road that are EVs increases, it can be postulated that

    the revenue captured by the gas tax would decrease. This has the potential to cause significant

    strain to the already strained financial structure of not only the TTF in Maryland but also other

    states and Federally. This potential lack of funding could lead to the not only the decline in new

    investments in the wider transportation infrastructure from a state and federal level, but also an

    increase in the deferment in needed transportation maintenance. This currently is the system in

    place for all states.

    Capture at the Pump

    The Capture at the Pump scenario would institute a tax capture system for EVs that would be

    similar to that of the current gas tax. This system would charge EV owners a set rate per

    kilowatt-hour that would be dedicated to the TTF. This in part mimics the way the gas tax

    charges a set fee per gallon that is dedicated to the TTF. While this sounds like a simple and easy

    system to set up there are potential drawbacks. First, for home chargers how would the taxing

    authority know where the electrons are going? Considering that home charging systems are

    wired into the houses electrical system. To separate one would have to either meter separately

    or devise a system in the charging unit that would determine its usage as opposed to other

    appliances and then charge accordingly. Then there is the issue of portable chargers that can be

    plugged into any electrical outlet, using these portable chargers (while they take an extensively

    long time to charge ones EV) one could essentially bypass the tax. While this has been talked

    about by several states, no state has gone forward with this policy.

  • 7/28/2019 Electric Vehicle Infrastructure in Maryland; And its Effects on the Transportation Trust Fund

    9/16

    8Electric Vehicle Infrastructure in Maryland

    December 17, 2011

    Tolls

    This scenario calls for an increase in Tolling on roadways in the state, for both new and existing

    infrastructure, as well as increasing tolls on currently tolled roadways. Besides just a general of

    exiting toll rates and increase in road tolling there are several other drawbacks. One of them

    would be the affect on non-EV drivers, as essentially they would be hit with this as well. While it

    is theoretical to apply this just to EVs advancements in technologies may be needed for toll

    collection systems to differentiate between EVs and non-EVs. Another question is what roadsdo you add tolls to, and by how much do you increase the tolls. With the addition of tolls on

    mainline roads, there is also the potential of traffic shifting to lower classification roads. No

    state has taken this route as a way to make up for gas tax decreases from EVs

    Fees and Taxes

    This scenario calls for an increase in the tax, title and registration fees associated with EVs or

    the creation of a new or separate fee for EVs to offset their non/limited contribution to the TTF

    via the gas tax. This is one of the two proposals that have been taken under serious

    consideration. Earlier this year Washington State proposed (SB 5251) a $100 per year fee to be

    paid by owners of EV classed vehicles. The purpose of this fee was to offset the loss of revenue

    from the gas tax. However in May 2011 the bill was killed, in part by an effort pushed by General

    Motors, the manufacture of the Chevrolet Volt. GM stated that tax would amount to a double

    tax to owners of its Volt, which would have been assessed the fee, considering that they also

    pay into the gas tax as well. 23 Many states also have significant tax rebates and reduced

    registration fees for EVs partially in order to being the price point down on these vehicles.

    Increasing these fees and taxes to offset the gas tax, could in theory eliminate these rebates, if

    not decrease the amount discounted, with the possibility of increasing them higher then what a

    gasoline powered vehicle would incur. Doing so could make the price pint for EV s unattractive

    for potential owners, decreasing the sales of these vehicles.

    Vehicle Miles Traveled/Road Usage Tax

    The VMT Tax or RUT would tax EVs at a set rate base upon the amount of miles traveled during

    a given timeframe. The RUT would be determined by an annual odometer check during the

    annual inspection of a vehicle. GPS tracking of vehicles has also been proposed. This proposal is

    attractive as that instead of charging for the consumption of energy as in the gas tax, you are

    now charged for the actual use of the transportation infrastructure. Oregon is currently

    reviewing and has passed legislation that would charge EV owners a RUT based on the millage

    they dive as a way to offset the loss of revenue from the gas tax. In the Oregon proposal (HB

    2328), drivers would be charged at a rate of 1.43 cents per mile traveled. Reaction to this has

    been somewhat mixed by Oregon EV owners. While some have stated they are in favor of the

    proposal, stating the need to maintain an adequate transportation network, others have voiced

    their disappointment and concern over other issues. Among the issues are the idea of big

    2 http://www.thefutureiselectric.com/2011/05/washington-state-ev-tax-dead/3 http://www.marketplace.org/topics/business/washington-state-wants-tax-electric-vehicles

  • 7/28/2019 Electric Vehicle Infrastructure in Maryland; And its Effects on the Transportation Trust Fund

    10/16

    9Electric Vehicle Infrastructure in Maryland

    December 17, 2011

    brother is watching (for GPS tracking), an issue similar to the Washington issue for PHEV owners

    of a double tax, being tax on roads out side of the state (if using just a odometer reading), as

    well as others. Because of these concerns, and the uncertainty of the method to use, Oregon

    has delayed the roll out of RUT. 45

    4 http://www.oregonlive.com/politics/index.ssf/2011/04/oregons_electric_car_owners_sh.html5 http://www.bizjournals.com/sanfrancisco/blog/2011/04/oregon-law-would-tax-electric-

    car.html

  • 7/28/2019 Electric Vehicle Infrastructure in Maryland; And its Effects on the Transportation Trust Fund

    11/16

    10Electric Vehicle Infrastructure in Maryland

    December 17, 2011

    State Initiatives

    Due to the sudden emergence of EVs as a new form of personal transportation and the limited

    current distribution of EVs in the United States the majority of state have yet to implement

    statewide policies when it comes to EV infrastructure. In the course of my project I was only

    able to fine one state, Connecticut, that has formed a statewide EV commission and had their

    findings finalized. Several other states, such as Maryland, Illinois, Iowa, Georgia, New Jersey,

    Oregon, are in the process of forming EV councils and developing statewide EV plans. In a coupleof other state some non-governmental organizations (universities and non-profits) have develop

    recommendations for the EV infrastructure using councils similar to what Connecticut has.

    This is not to say that there are not policies in place with states that address the EV

    infrastructure issue as well as the corresponding gas tax issue. As mentioned previously Oregon

    has passed a VMT tax specifically for EVs. A number of other states also have incentive plans,

    offered through their departments of Transportation or Environment, for those wishing to

    purchase EVs as well as install EV charging stations, in both the home and in publicly accessible

    areas.

    Maryland

    Currently in Maryland there is no set or stated plan or policy when it comes to EVs. Like many

    other states Maryland has several tax-based incentives and rebates for those who wish to

    purchase bot EVs and the charging equipment. And like many other states Maryland is

    experience significant stress when it comes to long-term fiscal security of the TTF. In 2010 the

    Maryland State Senate passed a bill (SB 176) allowing for the creation of the Electrical Vehicle

    Infrastructure Council, the purpose of the council is to look at strategies going forward in the

    promotion of EV infrastructure in the state of Maryland.

    The Council has only met several times so they have yet to make any policy or recommendations

    in regards to EV infrastructure in the State. Based upon the minuets that have been released to

    the public, most of the discussions have been on how to increase the number of public charging

    stations, the identifications of any barriers to expansion of the infrastructure, and general

    housekeeping measure for the council. Surprisingly they have welcomed public comment at this

    early stage have received some from a Mr. Bruninga, a member of the public. Mr. Bruninga has

    specifically commented on the issues of the gas tax and its replacement for EVs. Mr. Bruninga

    stands in favor of a VMT style tax for EVs. The Council has acknowledged this proposal and has

    set for discussion at a later date. No discussion has been recorded in the minuets in regards to

    using TTF monies in the expansion of EV infrastructure in the state.

    Based upon the enabling legislation, the council must submit an interterm report on its findingsto the Governor before January 1, 2012 and a final report before December 1, 2012.

    Connecticut

    In 2009 Executive Order 34 was signed by then Connecticut Governor Jodi Rell that established

    the states Electric Vehicle Infrastructure Council. The mission of the council was to develop a

    plan on preparing the State for the rapid and seamless integration of EVs into the market,

  • 7/28/2019 Electric Vehicle Infrastructure in Maryland; And its Effects on the Transportation Trust Fund

    12/16

    11Electric Vehicle Infrastructure in Maryland

    December 17, 2011

    coordinate interagency decision making on critical issues, establish performance measures for

    meeting goals, and making sure those goals aligned with national level EV goals. Much like

    Marylands current council, Connecticuts council consisted of members from various state

    agencies, as well as other various stakeholder representatives from the transportation and

    energy sectors. On September 1, 2010 the Council delivered a report of its findings to the

    Governors office.

    As part of the councils study, it identified several barriers to the increase of usage of EVs in

    Connecticut. One of the identified barriers is that current lack of EV charging infrastructure in

    the State. The Council also identified the question of who would pay for the build out of this EV

    Charging infrastructure. They came to the conclusion that it would be a combination of both

    public and private funds to both promote the build out and to cover the costs of the build out.

    However the council declined to state what percentage would be provided by each entity. It did

    propose some scenarios on who would fund the charging infrastructure, such as installing

    charging stations in high traffic zones and parking facilities. As for public side funding, there was

    no explanation of where exactly the public side financing would come from, though it was

    expected some of it would come via federal grants similar to what has been to the state by the

    Federal government for pilot projects in designated areas.

    In terms of recouping lost revenue from the gas tax, the Connecticut report makes no

    recommendations, nor have I been able to find any other discussion on the matter concerning

    the state. However the council did recommend a rather large package of incentives mostly in

    the form of ta breaks for those wishing to install charging stations, both public and home, in

    order to help reduce the costs. There was no mention of how the tax breaks would be paid for.

    Virginia

    In 2010 Virginia Clean Cities, an environmental advocacy group published a report analyzing the

    EV infrastructure in the Commonwealth of Virginia. The report has similar tones to that of thereport that Connecticut published. With the Connecticut report is share the concept that a

    significant barrier in the EV infrastructure is installation of charging stations. However the

    Virginia study points to an a complex, lengthy, and expensive permitting system as being the

    central part of the barrier to greater installation of EV chagrining stations in the Commonwealth.

    In terms of financing EV infrastructure the report makes little mention of public funds outside of

    the proposal of small grants and loans being offered by the Commonwealth to help offset the

    installation costs of EV charging stations. No mention is made of diverting funds from Virginia s

    TTF to EV infrastructure build out or improvements.

    As with Connecticut, at the Virginia study makes no mention of the gas tax recoup reduction

    associated with EVs, nor does it make any recommendations on how to recover those funds for

    EV class vehicles (Report of an Expert Panel).

    Indiana

    In February of 2011 Indiana University (IU) published a report addressing the issues of EV

    infrastructure in the State of Indiana. The report was complied by an Expert Panel from IUs

  • 7/28/2019 Electric Vehicle Infrastructure in Maryland; And its Effects on the Transportation Trust Fund

    13/16

    12Electric Vehicle Infrastructure in Maryland

    December 17, 2011

    School of Public and Environmental Affairs, state policy makers, and industry and environmental

    stakeholders. Of the reports examined the IU report was the most comprehensive in its

    examination of the EV industry, from vehicle manufacturers and battery makers to the policies

    not only being undertaken in Indiana but other states and countries as well.

    As with the other reports, the IU report also identifies the need to build out the EV charging

    infrastructure, as well as identifying the significant costs in doing so. The IU report identifies that

    significant public expenditure has been outlaid already for EV infrastructure. In its

    recommendations it states that private concerns should going forward take on more of the

    responsibility for the cost of the EV infrastructure build out and that public sources of funding

    be gradually reduced. In part for the reduction of public funds, it sites not only the large

    expenditures that have been made already but also the strain that continued financing can place

    on state budgets with the limited return on investment currently. The IU report makes no

    mention of funds being diverted from the TTF to finance EV infrastructure.

    As opposed to the other reports examined, the IU report does make mention of the gasoline tax

    and the effects that EVs place upon it. However it only make a brief mention of the gas tax in

    relation to how it may make an incentive for people to adopt EVs due to the relationship

    between the gas tax and high gas prices in other countries. But the IU plan makes no

    recommendations as for the replenishment of the TTF due to lost revenue capture from the gas

    tax. The IU does mention a tax plan that has been adopted by India, a series of excise specific to

    EVs, but does not say if their adoption was to offset lost revenue, nor does the report

    specifically endorse or oppose what India has done.

  • 7/28/2019 Electric Vehicle Infrastructure in Maryland; And its Effects on the Transportation Trust Fund

    14/16

    13Electric Vehicle Infrastructure in Maryland

    December 17, 2011

    Conclusions

    Moving forward, I believe that it is safe to say that EVs will continue to become an increasing

    presence on not only the streets of Maryland but also the streets of the United States and the

    world. Because of this an adequate infrastructure will need to be built out sooner rater then

    later to support these vehicles. In hand with this a new financing structure will need to be

    developed to offset losses in the Transportation Trust Fund incurred by the decrease of the gas

    tax capture associated with EV adoption.

    Public financing does have a role to play in the EV infrastructure build out. However I would

    recommend against direct public financing and ownership of EV infrastructure as well as I would

    recommend against using funds from the TTF to finance any part of this infrastructure build out.

    So far most of the public financing has gone to the construction of charging stations, which

    essentially are the gas stations of the future. That I know of or have been able to find, public

    entities in the United States do not own, operate, finance (with the exception of stations for the

    service of their own fleet vehicles) gas filling station, let alone finance them from the TTF, so

    why should they. A similar argument could be made for the power gird infrastructure as well,

    though government entities in some locations that do own electric infrastructure. I would alsoquestion the economics of diverting funds from the TTF that could be used for other

    transportation projects, such as bridge repair, to EV infrastructure build out, considering the

    limited number of EVs on the road with the pressing need from other transportation projects.

    As the number of EVs increases the need for charging stations will increase, I see the private

    sector meeting this need. Why, well this will develop into a market sector that developers

    cannot ignore. It would be advantageous for them to build charging stations at, new housing

    developments, retail centers, business complexes, and parking structures, as a way to attract

    the segment of the population that uses EVs to their facilities. Where public financing come in is

    in this build out. Initially as the technology is built out the government could offer, as

    recommended in the reports, tax incentives, grants, and low interest loans, to help contain the

    costs of instillation of charging stations. As the system grows these incentives, could be

    refocused to retrofit existing built up areas that have a lack of charging stations as well as rural

    areas in which their would be less EV possibly present.

    As for the Transmission and generation segments, most of the cost of these upgrades will be

    handle by the private sector with some government help. These will usually come out of

    improvements by various Smart Grid upgrade plans, and less so from Transportation related

    projects.

    The bigger concern though, as I see it, is the affect that EVs will place on the TTF. WithMaryland, as with most states and the Federal Government, the gas tax represents a significant

    portion of the funding mechanism for the TTF. Discounting any reductions caused by efficiencies

    in standard gas powered vehicles, the increase in EVs which use little to no gas, is bound to

    have an impact on gas tax capture and correspondingly to the TTF. As it stands essentially, with

    the exclusion of some of the hybrids, tolls, and registration fees, EVs, for all intensive purposes,

    are traveling on state and federal highways for free. This is not a good long-term solution. There

  • 7/28/2019 Electric Vehicle Infrastructure in Maryland; And its Effects on the Transportation Trust Fund

    15/16

    14Electric Vehicle Infrastructure in Maryland

    December 17, 2011

    for a new funding mechanism needs to be developed that address this inequality when it come

    to EVs. More then likely this will result in a new tax or fee being imposed, making any decision

    not a popular one, regardless of how it is explained to the public, however it is going to

    increasing become a necessary one.

    Based on my examination of several different financing proposals, the one I would put my

    recommendation behind is that of a Vehicle Miles Traveled or a Road User Tax. As explained

    previously, this tax would be on the amount of miles traveled in a given time frame by a vehicle.

    Thus it is taxing a vehicle not on the consumption of its fuel but on its actual use of the

    transportation infrastructure. However just like the other proposals this one is not with out its

    issues, what one tax out of state driving, how is the mileage to be determined, et al, and I dare

    not speculate into solutions to those issues. However if a system could be effectively applied, it

    could be expanded to not only EVs but to all vehicles and serve as a replacement for the current

    gas tax structure.

    In conclusion, EVs look to be here to stay, and it should be the responsibility of the government

    to promote effective, safe, and productive uses and roll out of EV technology. However the

    government must be clear in how it wishes to assist in the build out of the required EV

    infrastructure as well as being mindful of the potential strains that the EV infrastructure will

    have on finances.

  • 7/28/2019 Electric Vehicle Infrastructure in Maryland; And its Effects on the Transportation Trust Fund

    16/16

    15Electric Vehicle Infrastructure in Maryland

    December 17, 2011

    Bibliography

    Electric Vehicle Infrastructure Council. Final Report. State of Connecticut. Hartford, 2010.

    M.J. Bradley & Associates, LLC. Electric Vehicle Infrastructure A Utility perspective. Mobile

    Source Technical Review Subcommittee. Washington, 2011.

    Report of an Expert Panel. Plug-in Electric Vehicles: A Pratical Plan for Progress. Indiana

    University. Bloomington, 2011.

    Virginia Clean Cities. Virginia Get Ready: Initial Electric Vehicle Plan. Harrisonburg, 2010.