A new study points to a cautionary zone for wide adoption of electric vehicle fast charging: hefty fees slapped on during peak demand.

The study by Rocky Mountain Institute analyzed charging and billing data from 230 public fast-charging stations in EVgo’s network. It found EV owners can get hit by huge fee increases that utilities add on when there’s a spike in electricity consumption.

In one example cited in the study, an EVgo charger received a monthly utility bill of $1,938, of which $1,362 was demand charges.

Fast charging fees should stay at 9 cents per mile or less, according to the RMI report. That would keep charging competitive with gasoline.

Charging companies like EVgo are struggling to keep it at that cost because of how utilities structure their rates. Demand charges were originally established to help utilities manage demand from large companies, office buildings, and industrial facilities that could have a large spike in electricity use way above the amount of electricity typically consumed.

Peak demand eventually became a sticking point for residential and commercial property owners, and eventually for EV owners who wanted to avoid high fuel prices.

Utility demand fees are “a significant barrier to the development of viable business models for public DCFC [direct current fast charger] network operators,” the study said.

This study will be of interest to other companies like Tesla and ChargePoint, which are adding to their fast-charging networks and have been trying out fee structures to make the chargers profitable.

As for now, “fast public chargers basically don’t have a real business case,” said RMI’s Chris Nelder.

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The controversial demand fee issue is being looked at by a few utilities and governing agencies, including two companies in California.

California’s Public Utilities Commission has directed Southern California Edison and San Diego Gas & Electric to propose new rate structures that would bring down peak demand fees on public fast chargers. The two utilities submitted proposals on these new rate structures and may seem them adopted by the regulatory agency.

The RMI study finds that utilities adopting these types of programs could make the economics work for charging companies.

Greentech Media