Here is what you need to know about why, for some EV drivers, when charging networks switch to kWh-based billing, the price of charging an electric vehicle seems to balloon overnight

Marc Miron was less than pleased when he saw his receipt after a recent public EV charging stop.

A self-described “average 40-year-old suburbanite,” Miron is a three-time plug-in hybrid electric vehicle (PHEV) owner. But this year he took the plunge and bought a fully electric Ford F-150 Lightning.

The large electric pickup suited his commuting and hauling needs, while also ticking the box for being environmentally friendly. And, because of his history and comfort with plug-in hybrids, Miron felt ready for the full battery-electric experience.

What Miron was not prepared for is, he feels, the industry pulling a bait-and-switch on one of the benefits of owning an EV: cost savings for refuelling.

“They’re going to chip away at the perks,” says Miron, in an interview with Electric Autonomy.

“There’s nothing more frustrating than pulling up to a charger and it’s not putting out anywhere near what it says it should. And you’re sitting there looking at the clock ticking by. There is the challenge of that, but for them to turn around overnight and pretty much triple the rates? So, now, not only is it just as expensive as driving a gas car it’s not as convenient.”

kWh versus time-based billing

Miron’s sticker shock at the charging station is one of many EV drivers’ reactions to the introduction of public charging fees based not on time spent charging, but rather the amount of energy acquired.

To date the only charging networks in Canada to switch to kWh billing are Couche-Tard, Tesla Superchargers and, most recently, Ivy Charge & Go.

However, on Nov. 10, the Quebec government published draft regulations that will usher in kWh-based billing on DC fast chargers in the province in early 2024. The changes apply to Quebec chargers, only, where usage is above 10 kilowatts on 24kW chargers or 20 kW or more on higher-power chargers.

Quebec chargers with usage below these thresholds will continue to bill hourly.

For now, the overwhelming majority of networks in Canada still bills on a time-based model. It remains to be seen what they will do.

But the themes of the online comments regarding the issue and firsthand accounts appearing in the news from those drivers that have come across kWh billing charging stations are: confusion and dissatisfaction.

So, what has happened to cause such a seemingly uneven charging experience?

In February of this year, Measurement Canada, an arm of the Canadian government, gave a temporary dispensation for EV charging networks to elect to bill customers based on the amount of energy they consume at the charging station, rather than the amount of time they spend plugged in.

The reason is that time-based billing unfairly benefits drivers of EVs that are able to charge at higher speeds. Even though these faster charging vehicles may have been consuming more power at the charging station they were being charged less than slower-charging (and less-power-consuming) vehicles.

By contrast, kWh billing follows the gas station model. Customers are charged based on the amount of fuel they put into their vehicle, rather than the time spent with the nozzle hooked up to the car.

“At least from our perspective, kilowatt-hour billing is the fair option,” says Devin Arthur, director of government relations at the EV Society, in an interview with Electric Autonomy.

“Those stations, at least in Ontario, are built on a different rate class versus your typical house. If anything, it’ll probably just push people more to charge at home, which, if you can, you should be doing anyways because it’s a lot cheaper.”

Not all vehicles charge alike

Among the accounts of dissatisfied post-kWh charging experience EV drivers there is usually a common thread: they drive faster-charging EVs.

Miron says he recalls getting a 30 kilowatt charge at an Ivy station earlier this year. Under time-based billing it cost him roughly $6. Now, he says, that same charge (under kWh billing) costs him around $19.

“It used to be more mysterious, this is more transparent. When you used to pay for time, if it was fast, you paid less. And, if it was slow, you paid more and you got less, which didn’t make any sense. Now you pay for what you get,” says Cara Clairman, president and CEO of Plug’n Drive, in an interview with Electric Autonomy.

But for drivers of slower-charging vehicles, the rate increase from kWh billing has been negligible and, in fact, may even be slightly cheaper than time-based billing.

For instance, FLO has not transitioned its chargers to kWh billing and is still time-based. At an Oakville-area charging station their rate is $20 per hour. So, many slower-charging EV drivers are already accustomed to paying double digits for a public charge.

Not so if you drive a faster-charging vehicles.

Maarten Heilbron is a Toronto-based retiree driving an Ioniq 5. Just ahead of taking delivery of his Ioniq, in April, Measurement Canada gave the green light for EV chargers to bill by the kWh.

Heilbron was excited.

“I’m very analytical. Everything is in a spreadsheet,” says Heilbron, in an interview with Electric Autonomy. “I like the per kilowatt model because then you actually know what you’re paying for.”

But Heilbron says while he supports kWh billing, the varying rates at charging stations are confusing.

According to Heilbron’s spreadsheets, while public charging networks are still marginally cheaper than paying for gas, the slim savings may not be enough to coax drivers to trade in combustion vehicles for electric if they need to rely on public charging.

“Eighteen kilowatts is what it [takes] me to drive 100 kilometers. Most of our charging is at home…we pay 2.4 cents per kilowatt hour. It generally costs me — when I use that [ultra-low overnight rate] — about 40 cents for 100 kilometres,” says Heilbron.

“Then I got the email from Ivy. Their rate is 62 cents per kilowatt hour. So, that [100km] now is $11. Which is pretty close to the $12 that I would pay for gasoline for the same distance. I found all of that quite upsetting.”

Not all chargers bill the same

One Mississauga-based Tesla driver Electric Autonomy spoke to charges exclusively at Supercharger locations. His fees for public charging increased less than a dollar per charge since Tesla adopted kWh billing in August.

However, what is apparent is the lack of consistency in kWh rates — even between Tesla Superchargers.

For example, in documents provided by the Mississauga Tesla driver and reviewed by Electric Autonomy, at midday on November 14 Tesla Supercharging station rates between Burlington and Markham, Ont., ranged from a low of $.53 at a 250 kW max station in downtown Toronto to a high of $.75 at a 150 kW max station in neighbouring Etobicoke.

“There’s really no regulation of it. Everyone’s answer is, ‘Well, we’re competitive.’ It’s a bit of a wild west,” says Clairman. “Now, fast chargers are expensive to install and to run…Not every charger cost the same to put in. Is it fair to say this is the most you can charge? It’s hard to say whether that’s right.”

For drivers accustomed to consistent pricing under time-based billing it can be a shock to see fluctuations in prices between chargers, much like what exists at different gas stations.

The issue, believes Clairman, is the price parity with gas. If public charging is a regular occurrence, the current public charging rates aren’t offering big cost-savings compared to gas.

“That’s probably not great for EV sales,” says Clairman. “We’re out there saying, ‘save money.’ But basically now the most save money as long as you can charge at home or charge overnight somewhere most of the time.”

How this plays out in Quebec could be different, however. Its regulations include set prices, ranging from $0.31 to $0.52 per kWh, based on the capacity of the station and amount of power used.

Rate fluctuations

Clairman’s view is that EV charging station rates will equalize over time and likely without regulatory intervention like price capping. The nature of the open market is that people shop around for the best rates and bring their business there.

What could heavily impact how quickly that process happens, says Arthur, is mass adoption of kWh charging.

“Charging networks need to pull the Band-Aid off quicker and just switch as soon as they possibly can,” says Arthur. “Otherwise…you have an Ivy Charge that switches to kWh billing…people complain about that and then start using other networks. I think networks need to really kick into high gear and switch over completely.”

But EV drivers should expect that charging rates may always be fluid for a variety of reasons.

The first is utilities want to EVs to charge at night and sell electricity at lower rates to incentivize that. The flip side is a sliding scale of higher prices during daytime or on-peak charging.

The second is, as Clairman says, network operators need to start seeing a profit on their chargers. If the cost to maintain or expand the network goes up, so too may charging rates.

The third are demand charges, which remain a barrier to charging network expansion in many parts of Canada (see below).

Finally, there is the perennial grievance for most Canadians: rising electricity costs. If the cost of electricity continues to rise across many parts of Canada, the cost to charge may follow suit.

Time to sunset demand charges?

In most jurisdictions, EV chargers have an added complication to the base cost of providing power: demand charges.

In short, demand charges occur when a utility customer is charged for electricity at rate based on their peak energy usage if it goes above a certain level — even if that level energy usage doesn’t happen consistently.

While the practice of demand charging precedes EV charging stations, it has a significant and negative impact on operators today.

While no networks have broken down the cost of their charging rates in line items, Arthur believes that in jurisdictions where demand charges remain in effect and EV charging stations are not exempted, they are factored into the equation.

“They know that with the costs they’ve set they can pay for the energy fees, including demand charges,” says Arthur.

“Seems to me like probably their [rate] calculation is demand charges, whatever their service rates are, their wholesale distribution rates and then a little bit extra so that they can cover the maintenance and expansion.”

But, that equation could change for the better if electricity billing policies catch up with and accommodate EV chargers.

“If you look at Quebec they have a separate rate class specifically for DC fast chargers that basically eliminates that demand charge,” says Arthur.

“I know Ontario’s exploring an option to implement something similar. I think, if that does happen, you’ll see those rates drop because [charging networks] won’t have to pay those demand charges anymore.”

Talking through the growing pains

As the billing structure for EV charging solidifies, customers can expect to see some more ups and downs.

What Clairman would like to see is, in future, any changes be communicated more effectively.

“Everyone just changed it and they didn’t tell anyone. They did say, ‘Hey, great news, we’re going to kilowatt hours.’ But people didn’t understand the code — like, that means the price is going up. Nobody knew that. I didn’t even know that. People have been surprised, which nobody likes,” says Clairman.

“Those who have changed their pricing they really need to do a better job communicating it to their users. That’s marketing 101.”

For Arthur, the consumer grumblings are an understandable reaction to the changes, but they don’t signal anything more dire than temporary disatisfaction.

“It’s misdirected anger at the wrong thing. I think it’s just going to be a little blip and then it’ll just kind of disappear into the into the past,” says Arthur.

“Everyone wants to see networks not broken. We need to remember the fact that paying by the minute may not have been in the best interest of slower charging EVs, but also the network operators themselves.”