#77. The Future of Fueling at Retail

by Tammy Klein (Transport Energy Strategies) Gas stations are integral to maintaining a successful vehicle fueling network, regardless if the vehicle takes a liquid fuel or is powered by electricity. John Eichberger, Executive Director of the Fuels Institute joins us to talk about the evolution of fueling and what is needed to bring key players to the table for discussions about the future.

“The {Fuels Institute} Electric Vehicle Council we set up was to help answer questions about infrastructure. And from the Fuels Institute perspective, we don’t care if you sell electric vehicles tomorrow or not. We don’t care if you install chargers tomorrow or not. It’s not our place to say what should happen or should not happen. What we’re trying to do is provide a resource to help people make decisions that if they choose to go that way, in that direction, they can do so effectively and profitably.”

John Eichberger is Executive Director at the Fuels Institute, a nonprofit dedicated to evaluating issues affecting the vehicles and fuels markets. Prior to the Fuels Institute, Eichberger was the Vice President of Government Relations for the National Association of Convenience Stores (NACS) for nine years, where he oversaw the association’s government relations activities; represented the convenience and petroleum retailing industry before Congress, the Administration and the media; and directed the association’s petroleum related activities. Prior to that role, Eichberger was as the Director of Motor Fuels at NACS for six years.

Tag this podcast interview under the fun conversation category! In this wide-ranging conversation, I talk with Fuels Institute Executive Director John Eichberger about our start working on clean conventional fuels in the late 1990s, the rise of electrification and the critical need to address GHG emissions from the existing vehicle fleet. Click the pic to access the podcast interview, or listen on Apple, Spotify, Google or wherever you access podcasts. Meantime, I'll leave you with one nugget from our conversation:

"We have 270 million plus combustion engine vehicles in the United States today. Even if we were to achieve 50% of vehicle sales as EVs in 2030, that still means 8.5 million vehicles sold in 2030 will be combustion engine. We have to reduce carbon from those vehicles. If we're really concerned about carbon emissions and climate, you can't just sit back and wait for the white night of 'zero emission tailpipe vehicles.' We can't wait for that white knight to come and save the world. We have to address this now." Episode Transcript READ MORE/LISTEN

Excerpt from E&E News: But success hinges on resolving fundamental disputes over who has the right to sell electricity, and for how much.

The supply chain that underpins the gas station — starting in the oil fields of Saudi Arabia or Texas and flowing through intermediaries to that big price on the sign — becomes something else entirely in the EV age. What replaces it is a system of stupefying complexity. The price a station host pays for the new fuel is determined by which of America’s 3,000 electric utilities the plugs happen to be connected to. This pricing system is invisible to the driver but presents an existential dilemma for gas station owners. They find themselves at the mercy of an opaque, highly regulated and monopolistic electricity system that is the exact opposite of the one they have thrived on for decades.

EV charging involves “an electricity market structure that was not designed for — and is, not surprisingly, incompatible with — the retail fuel market,” said A.J. Siccardi, a fueling executive, in testimony to Congress last summer that caused sparks between the two camps.

As electric vehicles started taking hold, it occurred to many entrepreneurs that fueling them could be a moneymaker. But they faced an odd financial barrier. The fueler pays the utility for the electricity, but can’t ask the driver to share the cost. So, companies found workarounds. Some providers charged for the time spent plugged in. Others assessed a session fee. (Until two years ago, Tesla Inc., the EV market leader, let many of its drivers refuel at its Supercharger stations for free.) No strategy reflected the actual cost, but they were a start. Business needed a change to the law — an exemption that would, for the first time, allow someone other than a power company to sell electricity.

Delia Meier, a senior vice president at Iowa 80, a chain of truck stops, took a leading position in Iowa to open the market to ‘charge for charging,’ as it’s sometimes called. “There’s a lot of red tape, a lot of things that probably don’t make any sense,” she said. The Iowa Utilities Board rarely met and moved slow. Meier’s regional utility, Alliant Energy, would request additional hearings, and submit objections at the last minute. To Meier, it seemed the utility was conducting a passive, faceless resistance, using its unmatched savvy before the utility board to wear down any who would challenge its monopoly status.

In 2019, after a three-year process, Iowa relaxed its rules so stations like Iowa 80 can charge its customers any price for electric fuel, just like gasoline. Most states have done the same. The main lobbyists who forced the issue weren’t gas stations, but new companies whose bread and butter were charging stations — EVgo Inc., ChargePoint Holdings Inc. and, of course, Tesla. Alongside them were environmental groups like the Natural Resources Defense Council, which argued that a transition to electric vehicles — necessary to head off the climate crisis — couldn’t happen without a financial incentive to sell electric fuel to drivers. Today, only seven states still regulate EV charging as the exclusive domain of the electric company.

But even with the freedom to charge customers what they want, gas station owners still think that the utility has stacked the deck against them.

One reason is that some utilities also own and operate charging stations. They do so with their ratepayers’ money, in plans approved by regulators. Generally, this happens sparingly and in areas shunned by private industry. But convenience store owners fear the utility as a competitor because the utility has a state-allotted profit built into each of its investments. They worry this padding could lead the utility to set a new floor for fuel prices that the gas station can’t match. READ MORE