The Price is Right?

“Price is what you pay. Value is what you get.” – Warren Buffett

The price of a gallon of gas never differs much between gasoline retailers in my area. I’ve paid attention to gas prices lately as they have soared above $5.00 and then retreated a bit. Even though I don’t buy the stuff, a gallon of gasoline at the Exxon station on the corner never varies more than a few cents from the price advertised at the convenience store across the street. Public EV charging prices may be more stable in comparison, but they are not particularly uniform. How do EV charging prices get determined? Public documents from Fairfax County, Virginia give us a glimpse into their particular process for price setting.

Public Charging Fees Set by Fairfax County Board of Supervisors

This month, the Fairfax County Board of Supervisors approved a $0.30 per kWh fee for EV charging on county property. They also set an idling fee of $2.00 per hour.

The 30 cents per kilowatt hour is to be paid by members of the public as well as by county employees who charge their private electric vehicles while at work. The “dwell-time” fee of $2.00 per hour kicks in when the vehicle is finished charging after a 10-minute grace period.

The idling fee is to motivate EV drivers to vacate charging spaces at county office buildings when their battery is full. The idling fee is also deliberately intended to apply at Park-and-Ride and Metro garages where EV drivers cannot move their vehicles in the middle of the day. More on that later.

How did Fairfax County come up with these fees? Let’s take a look.

$0.30 per kWh for EV Charging in Fairfax County VA

A report titled “Establishment of Retail Fees for the Charging of Electric Vehicles at County-Owned Charging Stations” was prepared by county staff for the Board of Supervisors. It detailed the rationale for the $0.30 per kilowatt hour pricing and $2.00 per hour dwell-time fee.

The report said that the most important considerations in setting the fees were (1) the costs that are to be recovered by the fees; (2) the user’s ability to access and move their vehicle when charging is completed, and (3) competitiveness with the fees charged by other stations located nearby. 

The methodology used to determine the pricing weighed the relative merits of a cost recovery method vs a competitive market approach. The report concluded that while cost recovery was an important consideration, pricing that remained in line with the competitive market took precedence. “Prices that are too high in comparison to those charged by other providers are likely to lead to reduced demand for the service absent some unique benefit.”

Level 2 Prices Conflated with DC Fast Charging

Fairfax County surveyed fees by various EV charging providers in the county but they did not distinguish between Level 2 and DC fast charger pricing. The fees that they compared are summarized in Table 1 of the report:

The table was labeled “Examples of fees charged by commercial providers of Level 2 EV charging service.” However, two of the three examples actually reflect pricing of DC fast charging. The fee listed in the chart for Blink is indeed for Level 2. Fees for using Level 2 stations on the Blink Network tend to be relatively expensive and probably should be considered an outlier for price analysis purposes.

Fast chargers are typically much more expensive to build and operate. Fast chargers also provide more value for EV drivers who want to charge quickly, for example when they are on a long trip. As a result of the higher costs and greater value, fast charger fees are typically significantly higher than Level 2 charging prices. In fact, Level 2 charging is often provided for free as an amenity. Free Level 2 charging supported by advertising is the business model for VoltaCharging. Fast charging is almost never free nor cheap. Electrify America which delivers charging speeds up to 350 kW – fifty times faster than a typical 7 kW Level 2 station – costs 43 cents per kWh by credit card or 31 cents per kWh for drivers who pay a monthly $4 membership fee.

Conflating the prices of DC fast charging and Level 2 in the county’s analysis likely skewed the numbers on which the resulting recommendation was based.

Price Designed to Recover Electricity Cost Plus ChargePoint Fees

The county wants the fees to be sufficient to recover the cost of electricity plus all the costs associated with payment processing, networking service fees and a maintenance program contract. The report recommended that the embedded cost of electricity be assumed to be around $0.14/kWh for the purposes of the analysis. That figure accounts for an expected increase in the cost of electricity due to the rise in energy prices.

The variable costs to be recovered include a 10% payment processing fee collected by ChargePoint for each transaction. That 10% transaction fee amounts to $0.03/kWh which brings the variable costs to approximately $0.17/kWh. The remainder of the fee would need to cover the fixed costs associated with ChargePoint networking fees and a maintenance and support program called ChargePoint Assure.

ChargePoint Assure includes automated remote monitoring of the stations, coordinating necessary repairs, and a guarantee of 98 percent uptime.

According to the price list in Fairfax County contract number 4400009695 dated November 4, 2020, the costs to the county for a five-year prepaid ChargePoint Network Plan is $1,072 per port. The ChargePoint Assure Warranty is listed as $2,221 per station (dual-ports) if pre-paid for five years.

Fairfax County Contract No. 4400009695 Pricing Schedule:

• 5-Year CPCLD Comm Network Plan, per port: $1,072
• 5-Year CT-4000 Assure Warranty, per station: $2,221

At the above prices, the ChargePoint network and warranty fees for each charging port would be about $1.20 per day. Each and every Fairfax County-owned charging spot would have to average at least 9.2 kWh per day, every day in order to recoup the fixed costs for the ChargePoint network and warranty services. Expecting that level of utilization is unrealistic in my opinion. For perspective, consider that an EV charging site at a Howard County Government office building averaged less than 3.5 kWh daily usage per charging port according to a PlugInSites utilization study.

Virginia Anti-ICEing Penalty Used to Benchmark $25.00 Idling Fee Cap

The county decided that the “dwell-time” fee of $2.00 per hour will apply in Metro and Park-and-Ride situations were the driver is unable to move their car during the day. This will almost certainly guarantee that commuters will be billed for multiple hours of non-charging time during a full work day when their car is in the commuter lot. PHEVs with smaller sized batteries are a perfect use case for commuter lot recharging, but the untenable county-imposed idling fees would end up being unjustifiably punitive for PHEV drivers.

In some instances, such as at Park-and-Ride locations or in Metro garages, it is presumed that the vehicle will be parked at the EVSE for a full business day. For these locations, the dwell-time fee of $2.00 per hour is intended to discourage an EV driver with a nearly-full battery from parking at an EVSE spot for a de minimis cost and preventing others from using that spot.

The county put a $25.00 cap on the maximum dwell-time fees that can be incurred per charging session. How did the county come up with $25.00? They pulled that figure from the the maximum civil penalty established in the newly enacted Virginia anti-ICEing law. “The $25.00 dwell-time cap per session considers the maximum civil penalty of $25.00 established in Va. Code § 46.2-1219.3 for traffic infractions related to parking in a space marked as reserved for EV charging.”

Fairfax County Will Not Adopt Signs to Enforce Anti-ICEing Law

Fairfax County is willing to penalize EV drivers for staying more than 10 minutes past the moment their car stops charging but what will the county do to penalize drivers of gas guzzling vehicles that block EV charging stations? Well, it turns out the county intends to willfully tolerate ICEing if it occurs. Enforcement of the Virginia anti-ICEing statute is contingent on specific signs being posted. Fairfax County won’t be posting enforceable signs at county-owned charging stations. Here is what the report says (emphasis added):

This civil penalty, adopted by the General Assembly in 2022, may only be imposed if the parking space reserved for EV charging has a separate sign containing the language “PENALTY, UP TO $25.” Va. Code § 46.2-1219.3 further authorizes localities to adopt an ordinance consistent with the section’s provisions. At this time, staff does not intend to recommend the Board adopt such an ordinance or to include a “PENALTY, UP TO $25” sign at spaces reserved for EV charging at county-owned charging stations, as there is no evidence that drivers are inappropriately parking in spaces reserved for EV charging.

One Right Price

Fairfax County will have difficulty getting EV drivers to see the value of paying $0.30/kWh for Level 2 charging. Consider the EV charging fees set by other nearby governments. Loudoun County charges a flat fee of $2.10 per session. Arlington County recently set their fee at 14.5 cents per kWh. Montgomery County, Maryland charges $0.13/kWh. Howard County, Maryland has always offered free charging at county-owned charging stations.

On the popular TV show, The Price is Right, there is a game called “One Right Price.” The contestant is shown two prizes and a price corresponding to one of them. Match the correct prize to the price and the contestant wins both prizes. Perhaps there is no “one right price” for EV charging, but EV drivers and charging station operators all win if prices are correctly matched to value.