Establishing an EV Charging Network at Southwest Minnesota Municipal Power Agency, with Chris Schoenherr - [an Energy Central Power Perspectives™ Interview]
- Aug 17, 2021 11:00 am GMT
Earlier this summer, the Southern Minnesota Municipal Power Agency received an American Public Power Association Energy Innovator Award for working with its 18 municipally owned member utilities and ZEF Energy to establish an electric vehicle charging network in its members’ communities.
SMMPA and its members announced the network in 2019 as a way of helping Greater Minnesota make the transition to EVs. A few months later, when SMMPA announced its plan for transitioning into “SMMPA 2.0” by moving to 80% carbon-free generation in 2030, it highlighted the potential of beneficial electrification, citing the charging network.
Energy Central interviewed Chris Schoenherr, SMMPA’s Director of Agency and Government Relations and Chief External Affairs Officer, about the generation and transmission joint agency’s experience in deploying the network. The questions and answers have been edited for clarity and length.
Energy Central: What got SMMPA interested in starting an EV charging network with its members?
Chris: It was really two things. Late each year, we have a board retreat where we spend a day and a half just looking forward and seeing what issues we think we’re going to be coming upon in the not-too-distant future. And at the retreat in November of 2018, this was one of the topics that came up. It was something the SMMPA staff had been asked to research. I will tell you now that what we told them at that point ended up being wrong. I said this whole transformation of the transportation industry was coming but was going to take a long time. Looking at it now, it’s coming much faster, so it’s a good thing we got moving on it early. But we still kind of recognized in 2018 that, “Boy, this sounds like it could be a thing.” Also, we were looking at our economic development program and we said this is one of those areas where we could grow our load, but also be smart about doing it in a way that wouldn’t require a ton of investment in additional peaking capacity because it’s load that you can manage. And that was intriguing to our members. It was certainly intriguing to us.
So then, coming out of that board retreat, it was, “Well, you know, what should we do?” And we talked about maybe doing charger rebates for residential or business use. But we asked, “What are the major barriers?” And at that point in time, and I think still, it was public charging to address range anxiety. With our internal combustion engines, we’re so used to being able to look up and see a gas station everywhere. You have some comfort that, “I can get from here to there.” With electric vehicles, that is not necessarily the case, at least not yet. And we thought that’s a place where we can play a role that could have a real impact. I don’t know if a $500 rebate on a charger for a home is going to swing somebody into buying an EV or not. But knowing that the money they put down on an electric vehicle will result in a vehicle that gets them where they want to go — that, we thought was a big deal. And we do infrastructure, so it seemed like a good fit. That’s not to say we won’t do some rebates on electric vehicle chargers for residential and business customers down the line, but we thought this was an important first step.
Energy Central: The program is a collaboration between you, your members and ZEF Energy. Why did you decide to work with ZEF?
Chris: One of the things that impressed us with ZEF was that they really emphasized educating us on how this business worked, just down to the simple basics of electric vehicles. They spent two or three meetings with us before they ever came up with a sales proposal — it was more about education. So, we felt good about being a partner with them. And we continue to feel very good about being a partner with them.
Energy Central: When did you start talking with ZEF?
Chris: I think we started talking with ZEF in the very early part of 2019 and had two or three meetings with them over a couple of months. What was advantageous for us and ZEF was that about the same time as we were considering putting this charging network together, the state of Minnesota was trying to put together a charging network with some of the VW settlement funds. So ZEF got a grant to do 22 charging stations as part of the VW settlement, and our order almost doubled that. So, we were able to get some volume discounts on equipment we wouldn’t have been able to get on our own and ZEF wouldn’t have been able to get on their own. It was economically advantageous for all of us, and I think from a learning and experimenting and best practices standpoint, it was a good time to be doing that together as well.
Energy Central: The EV charging network is part of SMMPA 2.0, but SMMPA announced the charging network first — in November 2019, three months before it announced SMMPA 2.0. Why was that?
Chris: We first introduced the concept of SMMPA 2.0 to our board in July of 2019 and then ultimately announced it in February of 2020. We had also started the discussion about the EV charging network and got the approval to move forward with that in October of 2019. The timing piece was if we moved forward in fall 2019, then we could partner up with ZEF and be ordering equipment at the same time that they were ordering it for the VW settlement. So, from an economic perspective it made sense. And just from a this-was-going-to-take-some-time-to-do perspective, it made sense to launch that early, even though we knew that was going to be one of the components of our SMMPA 2.0 initiative.
Energy Central: What were some of the things you and your members had to figure out in deploying the network?
Chris: Where do you site the chargers? How do you approach property owners or retail store owners about wanting to put one near their facility? Ultimately, I think, most of our members put them on city property. Most of our communities are fairly small, so it doesn’t make that much difference. Also, our utility members hook things up to their system all the time, so that’s not a problem. But these things are kind of unique as to where they sit, how they interface with software and that kind of platform. We were very concerned that they were going to have to be visible like gas stations, so people see them. That’s not the way EV owners operate. They go off apps and so they know before they leave their house where that electric vehicle charging station’s going to be. So, they’ll find them that way. For folks that own retail establishments, initially, it might be, “Well, you’re going to take up one of my parking spots. And I’m going to have to get compensated for that.” I think that was kind of the early discussions. Later on, it’s “Oh, this could make my business more attractive to potentially very good customers. I’d love to be able to host that.” So that kind of thinking has changed on it, too.
Also, we got a lot of insight from ZEF on the charging stations they were putting up as part of the VW settlement. Those have a dual-port level 2 charger and a DC Fast Charger. For each of our communities, we added one additional dual-port level 2, with the thought that we could have the level 2 chargers in two different places so your community could have more than one place where they had an electric vehicle charging opportunity. And that worked out great. Our members have been pretty creative about where they put those. For the DC Fast Chargers, you have to have three-phase power close by. It can get pretty expensive if you have to bring it to a location. So just working through that planning of, “Where do we have the infrastructure in place so we can do this economically?” and “Where are we going to put it such that it’ll be convenient for folks to use?” And ultimately, that probably is the more difficult part of it. You know, figuring out the software and how all that works, and then figuring out what’s the relationship between the property hosts and utilities. So, all of those are things that we learned along the way.
Energy Central: In hindsight, is there anything you’d do differently?
Chris: You know, if I had it to do over again, I would have acquired an EV for SMMPA when we started the project. Unless you have an electric vehicle, you don’t know what it’s like to use the apps and understand the customer experience. Thankfully, I know people who do, and I’ve had them come over to our headquarters and use our level 2 charger.
Another kind of side anecdote on this — one of the larger charging networks in Rochester had gone down and Rochester Public Utilities, which is one of our members, had somebody from the state there who had an electric vehicle. Since they weren’t able to charge it where they normally did, the folks at RPU said, “Well, you should probably head over to SMMPA headquarters, I’m sure they’ve got a charger there.” Well, at that time, we didn’t. So that was a little awkward. Now, we do. We’ve made that charger available to the public in off-business hours. But that’s one of the things that we learned. You’ve got to be part of the club. And so having a charger at our facility makes us more a part of that club. Ultimately, having an electric vehicle of our own, that makes us part of the club, too. And when you are, you just understand and appreciate a little bit better what’s important to electric vehicle owners, and what their thought process is.
Energy Central: You said that each member got a DC Fast Charger and two dual-port level 2 chargers. You said they put the level 2 chargers in different places, but is one of the level 2 chargers always with the DC Fast Charger, so there’s one place in each member’s territory with the Fast Charger and a level 2 charger and then there’s another place with a level 2 charger, or are there some members that put them in three different places?
Chris: You know, there’s been a mix. I think most of them followed the model of the level 2 and the DC Fast Charger in one location and the second level 2 in a different location. Some put them all in one place. And I think we had at least one member that might have had the DC Fast Charger on its own. The idea was that the DC Fast Chargers for public charging are going to be the most popular options because they’re quick. But if you’re there and somebody’s already using it, well now what? Well, here’s a level 2 charger with essentially two hoses on it, so you can get enough charge in a relatively short time to get you either to the next DC Fast Charger or wherever it is that you’re going. It’s kind of a best practice thing that we picked up from ZEF and most of our members have done it. I should add that we also gave our members the option of getting additional chargers. We had one member that got an additional DC Fast Charger and two members that got at least one additional level 2 charger. The pricing was attractive, so it was a good time to do that.
Energy Central: Who paid for the chargers?
Chris: For the standard package, SMMPA paid for that, and then we simply transferred ownership of those over to our members at no cost. We’ll pick up the maintenance and the communications charges — the first five years of the communications piece are part of the package, but we’ve got the maintenance agreement that we’ll continue to pick up. Now, I say, “we’ll pick up,” and I think you’ve asked the right question on that. The only funds that we have are funds we get from our members for services we provide to them — primarily the electricity and transmission. So, are our members paying? Yeah. They are and it’s included in rates. Our investment in this was between $600,000 and $700,000, which is a lot of money for us. But still, it doesn’t really make a change in the rates that our members would pay. When we’re able to do those things for each of our member utilities and avoid having to go through their budgeting process, it reduces the complexity for them. Their local budgets are important and complex enough for their commissions. They have bigger fish to fry. Having SMMPA do that on their behalf makes it a little bit easier. We’re very transparent with all of our member utilities and they are with their commissions as to what we’re doing, it just makes it simpler. And we get the economies of scale.
Energy Central: So, is the network up and running, and, if so, how long have you had it out there?
Chris: Nearly. We’ve got one member whose DC Fast Charger is going to go online in a couple of weeks, one that’s still struggling a little bit with siting, and there are two level 2s that are yet to be installed. So, I think for all intents and purposes, we’re there. Our members all have some EV charging capability in their town, and I think by the end of the summer, everybody should have everything in place.
Energy Central: What’s the reaction been so far or is it too early to tell?
Chris: I think it’s been surprising for us. We thought the utilization on this was going to be pretty low, so we’ll just accept that, given we’re just doing this as a building block to start the transformation of an industry and that doesn’t happen overnight. But the usage has been more and quicker than we would have expected it would be, particularly in some of our smaller communities. You think, “Well, how many people own an EV in a town of thirteen hundred people?” Well, maybe not many, but there’s a lot of people who travel through there. And, as I said, EV owners are very adept and very interested in seeing where these chargers are. They may be making a regular trip from somewhere in Iowa up to the Twin Cities or up to Duluth or what have you. Now having that EV charging capability in some of those small towns along the way is a big deal to them and they will tell every EV owner they know about it. So that word-of-mouth travels pretty fast and the apps are incredibly important in that. So, yeah, I think we’ve been surprised.
And the automakers’ growth in EVs is coming a lot faster than we would have anticipated, so our timing ended up being even better than we thought that it would be. Vehicles like this can appeal to people on any number of levels. The maintenance and operating expenses of these things are low, so if you’re cheap, it’s a smart thing to do. If you’re a gearhead, these things, even the lower-model ones, will suck you back to the seat. They perform really well. And then, if you’re an environmentalist and you care about climate change, the carbon footprint is so much lower. There’s a ton of good reasons for doing it, so pick one or all of them. People are seeing EVs out there more now and they’re talking to people who own EVs and seeing more and more people who are going the EV way. People also recognize that, maybe I’m going to have one EV and I’m going to have one hybrid or conventional vehicle I’m going to take on a thousand-mile trip. For most people, their average is less than 30 miles a day. And that’s a real sweet spot for electric vehicles.
Energy Central: Do people have to pay to use the chargers?
Chris: They do. We had some members that had early grace periods just to get people used to them. But by and large, the members can do whatever they choose to do with pricing. That said, almost universally, they’ve adopted the same pricing that ZEF has used on the network that they put out as part of the VW settlement. For the level 2 chargers, that’s typically been two bucks an hour. For the DC Fast Chargers, there’s usually a five-dollar connection fee and then 30 cents a minute. There’s some science in that as to what you need from a cost-recovery perspective, but these were never intended to be money makers for us. The other objective of the pricing model is to get people to use the spaces by the chargers for charging rather than just as parking spots. You want them to get their charge and then move on so that other people can use the facility.
Energy Central: In SMMPA’s press release about the award it got for the network, it said it had developed a blueprint for how to create an EV charging network across members within a joint action agency. So, is that something you’re sharing with your counterparts and with your counterparts in the co-op industry?
Chris: We don’t have a written document per se, but we’ve been very open about talking to anybody and everybody who’s interested in this. So, we’ve had the opportunity at a couple of industry gatherings to discuss what we’re doing. And there are any number of different EV utility groups where we’ve had the opportunity to explain, “Here’s what we did,” and “Here’s the things we learned and, if we had it do over again, here’s some things we would do differently.” And, of course, “Here’s the things that we did that we thought we did right.” But, yeah, I think it’s to all of our benefit to address the range-anxiety issue, and public charging does a huge amount to do that. We’re 18 members, we’re not going to do that on our own, but to the extent that other utilities do something similar to what we’ve done, it helps us all. It helps us achieve the objectives we were looking to achieve.
Energy Central: Do you think you’ll expand the charging network at some point?
Chris: Potentially. I think we’re going to take a breather now. Because like everything else, these things end up being more work than you anticipate on the front end. So, we’re just wrapping this initial effort up now. We’ll give our members a breather to get through this construction season, and then circle back. I’ve had some discussions with ZEF and with others about, “Okay, what is our next thing? Do you want to do some more EV charging stations?” We have a couple members that are interested in that. Or is it, “Are we going to try to tackle the workplace charging environment or something else?” I know that we’ve got some members that if they had the opportunity to put in some more EV charging stations, they would jump at that. I wouldn’t be surprised if at some point in time we do some more but I also wouldn’t be surprised if you see more retail establishments deciding they want to have EV chargers. Whether it’s a ChargePoint or a ZEF or somebody else that decides to install more chargers, that’s great. The business model can be a little tricky, given the electric utility industry structure in most states, but I think the demand might be there. Particularly for motels, they’re already putting up level 2 chargers, it’s something that helps attract customers to their businesses, so the incentive is already there. In our communities, if others want to install chargers, we certainly wouldn’t want to be standing in the way, but we really want to facilitate that growth. You know, if, it’s going to happen organically, then maybe our work is done. But if it’s not, there may still be a role for us to put in some more EV charging infrastructure yet.
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