Electric Autonomy looks at the implications of the provincial regulator’s rejection of BC Hydro’s proposed EV charging rate increase and switch to kWh billing

A proposal put forward by BC Hydro to change the rates of its public electric vehicle charging stations has been denied — at least in the short term — by the B.C. Utilities Commission (BCUC).

Instead of implementing an interim suggestion from BC Hydro to raise charging station electricity rates come September 1, the BCUC is electing to accelerate its review of BC Hydro’s full application.

The BCUC is establishing a Streamlined Review Process (SRP) to expedite the review of BC Hydro’s application and is inviting public participation in the process.

Until the review is complete, the current rates remain in effect.

“We will keep customers informed as the process evolves,” says BC Hydro in a press statement.

“In the meantime, we are committed to continue to grow the public EV charging network across B.C. Currently, we have 151 chargers at 84 sites across the province. In the next ten years, we’re proposing to expand to over 3,000 charging units.”

BCUC’s concerns with BC Hydro’s proposal

BC Hydro’s proposal, submitted in July, sought to hike the current charging fees by an average of 15 per cent and implement an energy-based kilowatt-hour (kWh) billing structure.

The plan stemmed, in part, from a January 2022 request from the BCUC instructing BC Hydro to review electricity rates in the province and file a new application for a permanent EV fast-charging rate.

The BCUC, an independent agency within the British Columbia government that has the authority to regulate energy utilities in the province and sanction adjustments in utility pricing, said the current rates “under-recover BC Hydro’s costs of providing the service.”

BC Hydro’s application proposed a tiered pricing system based on power-level intervals. The suggested tiers are:

• up to 25 kW,
• 25 kW to 50 kW,
• 50 kW to 100 kW,
• 100 kW to 200 kW and
• greater than 200 kW fast charging.

In conjunction, it proposed new interim rates — which were to come into effect next month — ranging between 13 cents and 33 cents per minute for these power intervals.

The current pricing doesn’t incorporate power intervals; instead, the rates are set at:

• $0.12 per minute for 25 kW fast charging stations;
• $0.21 per minute for 50 kW fast charging stations; and
• $0.27 per minute for 100 kW fast charging stations. 

The application also sought to introduce a new extended stay charge to help reduce congestion at stations by discouraging stays after a charging session has ended.

However, the BCUC denied BC Hydro’s interim rate proposal, calling the tiered pricing system “materially different than the current rates.”

Amending application for kWh-based billing

BC Hydro’s suggested move to kWh energy-based charging was also called “premature” by the BCUC in a press release because the utility has not been given permission by Measurement Canada to do so.

Earlier this year, Measurement Canada granted a temporary dispensation allowing charging providers of “Level 3+” (DC fast) chargers the option to bill customers per kWh. Approval to have kWh billing for Level 2 chargers was permitted in October 2022.

Traditionally, the billing structure at EV charging stations in Canada has been based on the time an EV was plugged in, rather than its actual energy consumption.

This move addresses the issue of unfairness in time-based billing when charging speeds vary due to factors like charger reliability, battery temperature or the faster charging speed capacity of certain vehicles models.

BC Hydro is “currently working with Measurement Canada” to amend their application for temporary allowance of kWh billing and “are planning to submit it in September,” says a spokesperson for BC Hydro in an email statement to Electric Autonomy.

At the same time, BC Hydro is also readying its technology platform and charging station equipment to move to energy-based billing.

“Based on the current rate application regulatory schedule, we’re planning to move to energy-based billing in Spring 2024, subject to receiving approval from the BCUC for an energy-based rate,” says the BC Hydro spokesperson.

Balancing private and public sectors

To help put the B.C. decision in a broader context, Electric Autonomy spoke to Jeff Turner, director of clean mobility at Dunsky Energy + Climate Advisors.

Part of what’s playing out in B.C., says Turner, is the inherent potential unevenness in a market where private and public competitors co-exist. Price and rate adjustments, such as those requested by the BCUC, can help create a more equitable playing field, says Turner.

Turner explains that utilities can justify offering low rates for public fast charging because they can make up the costs with the revenue they get from residential EV charging as the utility provider.

These additional revenue sources from home charging are unavailable to private sector companies because they do not provide charging at home.

“Where there’s a tension here is that…some folks have expressed a concern that it will be hard for these private sector players to compete with utilities,” says Turner.

“That’s why there are concerns about an uneven playing field and that’s ultimately why BC Hydro has been encouraged to increase their rates so that it’s more in line with the actual cost of delivering that service and ensures fairness with those other competitors in the market.”

Implications beyond B.C.

The debate over EV charging pricing strategies extends beyond British Columbia to the rest of Canada.

So far, at least two private networks have gained approval from Measurement Canada to use per-kWh pricing.

Earlier this month, Tesla announced the move for its Supercharger network. Alimentation Couche-Tard, the Quebec-based convenience store and fuel retailer, which operates in most of North America under the Circle K brand, has also adopted kWh billing for its DC fast chargers in Canada, according to the rates displayed on the Circle K Couche-Tard Recharge app.

While the fairness aspect of switching to energy-based usage fees is a powerful motivator, Turner notes there is still at least one drawback: they disregard the time value of charging equipment installed.

Charging speed decreases as the battery nears full capacity. A fee solely based on energy might discourage users from unplugging their vehicles as charging slows down since the fee remains proportional to energy cost. In contrast, a time-based fee encourages users to free up the charger once they approach an optimal charge level.

“When there are a number of users sharing expensive equipment, it can also make sense to have a price based on time which recognizes the time value of that equipment,” says Turner.

The Hydro-Québec approach

Any network run by a public utility, like BC Hydro, is subject to provincial regulatory oversight of electricity costs and usage.

In Quebec, provincial utility Hydro Québec also plays a pivotal role in providing EV charging services to customers. The pricing structure for Hydro Québec’s charging network, The Electric Circuit (Le Circuit eléctrique), is subject to regulatory and pricing oversight by the Régie de l’énergie.

“What we’re seeing in B.C., where other private sector players are saying it’s unfair for BC Hydro to set their rates so low — we haven’t seen that happen in Quebec,” says Turner, a Quebec resident himself.

Turner emphasizes the focus in Quebec has been on facilitating EV adoption while maintaining affordable pricing for consumers.

“The governments and utility… are pretty sensitive to how high they can drive those prices and I’d say that’s the dominating factor in Quebec, and so far the rates Circuit eléctrique uses are still pretty affordable.”

“The Circuit eléctrique and Hydro-Québec have taken steps with the Quebec government to offer kilowatt-hour charging for the fast charging stations in its network,” says a spokesperson for Hydro Québec in an email to Electric Autonomy.

“In Québec, the government sets fast-charging rates by decree. Kilowatt-hour charging will therefore be offered once the law has been amended.”

Argument for a hybrid model

With pricing likely to increase for charging, Turner anticipates more people will be more accepting of the price changes, once they realize the small role public fast charging will have on their charging experience.

One exception to this is people residing in apartments and condos, who lack private charging options.

In such cases, Turner suggests charging providers need to find affordable charging solutions for these customers. One potential solution, he explains, could involve introducing a subscription service featuring a monthly fixed charge.

Additionally, Turner suggests an alternate optimal fee structure for public EV charging would be a “hybrid structure that would include both a time component and an energy component that would really capture both the value of the energy and the value of the equipment and encourage people to move on when they’ve got a sufficient charge.”

It’s a more complex model that requires “customers having to anticipate how long are they going to charge and how much energy are they going to pull,” which can be challenging.

However, Turner maintains a hybrid model captures the best value for everyone.

“We know that once [people] switch to an EV they’re going to do 80-90 per cent of their charging at home. Once [people] recognize that, I think [they] will probably be much more amenable to higher usage fees for that fast charging.”