Seizing the electric vehicle infrastructure opportunity
Cracking the real estate challenge to reap the benefits of the Infrastructure Investment and Jobs Act
Signed into law in November 2021, the bipartisan Infrastructure Investment and Jobs Act (IIJA) provides $7.5 billion to advance electric vehicle (EV) adoption. States have a rare opportunity to claim significant federal budget dollars for EV infrastructure by submitting detailed five-year plans for approval. The catch? The deadline is tight, and states will require expertise in a range of disciplines - from electric utility planning to real estate negotiations and public-private partnerships - to create a solid plan.
IIJA establishes several grant programs to accelerate build-out of a convenient, reliable, affordable and equitable public charging network nationwide. Initially, grants will come from the $5 billion National Electric Vehicle Infrastructure (NEVI) formula grant program. This first round of funding is intended to help states build out a nationwide network of EV charging stations along National Alternative Fueling Corridors established by prior legislation.
That’s where the challenge comes in. To claim NEVI grant allocations, states and territories must submit EV charger deployment plans to the newly established Joint Office of Energy and Transportation no later than August 1, 2022. However, 180-day minimum standards and requirements for the NEVI program will not be available until May 2022.
The August 1 deadline requires states to prepare complex and detailed plans in a relatively short timeframe. Furthermore, the NEVI program has fairly narrow requirements to achieve its policy goal. State departments of transportation will need to coordinate closely with their energy and environment departments, among other offices, and be very strategic to meet the submission requirements and deadline.
The site-mapping challenge
The NEVI program seeks to ensure that consumers will have access to fast charging stations every 50 miles along designated Alternative Fueling Corridors. Each station must be located within one mile of the interstate. Therefore, states are advised to focus on sites along the Alternative Fueling Corridors, which comprise nearly 60,000 miles of interstate highways in 48 states and the District of Columbia.
The exception is when a state can demonstrate that its Alternative Fueling Corridor(s) is already built out per the NEVI requirements.
State plans don’t need to include specific EV charging infrastructure locations, but should illustrate adequate coverage. Plans also should offer an overall strategy for creating, upgrading or expanding installations over time.
That doesn’t narrow the scope as much as you might assume. Charging stations can be potentially installed anywhere from gas stations and shopping malls to municipal parking lots and highway rest stops. Deployment costs will vary widely. States need to anticipate the costs and potential obstacles in the way of securing well-located sites.
The following are six critical considerations for your state EV charging plan.
Types of locations: States need to identify the communities in which chargers should be installed, and the desired types of sites. Locations could include, for instance, a truck stop next to the interstate, a suburban shopping center or a small-town site a mile off the main highway. In urban areas, simply finding a viable site of any kind may be a challenge.
Also critical is prioritizing sites that are unlikely to attract private EV charging investment anytime soon. For instance, you may seek to add stations in rural, isolated/lower density and disadvantaged communities to provide equitable access. Or, you may be anticipating future growth in certain communities, where an EV charging station could meet the needs of the future population while also supporting the national network concept.
Fast charging may require expensive electric infrastructure upgrades, so a critical consideration is whether a site will be available for 10 years or more to justify the investment. You will need to avoid transitory sites and focus instead on sites available for long-term lease or easements.
Site negotiations. Each location will require a land acquisition or lease agreement with a landlord and/or business owner. Every property owner will have a unique perspective regarding the prospect of providing a charging site. For example, a convenience store may welcome the opportunity to host a charging station as means of capturing sales during charging dwell times. Alternatively, parking facilities may not want to tie up premium spots that otherwise would turn over quickly.
That means every site transaction will require a conversation with the landowner about their needs and concerns. States will also need the expertise to negotiate an agreement that will support the EV charging station over the long term.
High-speed versus traditional charging speed. Today, most EV owners charge their vehicles at home or at work, where staying plugged in for an eight-hour recharge is very convenient. On a cross-country trip, however, drivers need high-capacity stations that can recharge an EV in 20 to 30 minutes—just long enough for lunch or a dog walk.
For that reason, the federal subsidy provided by IIJA is intended to help scale up fast charging availability. All EV charger infrastructure funded by the NEVI formula program must offer direct-current fast chargers. Stations should be designed to provide at least four combined charging system (CCS) ports capable of simultaneously charging four EVs, with at least 150 kilowatts of power at each charging port.
The need for fast charging will determine what type of site will be most appropriate. The high turnover of a fast-charging station would be beneficial to a gas station or fast-food restaurant, for example, where drivers in need of EV charging could also linger to shop or enjoy a meal.
Utility infrastructure improvements. In addition to the cost of a high-speed charger, you’ll also need to anticipate utility upgrades. While many sites can accommodate a single EV charger without a power upgrade, fast charging will create a significant electricity load. At some sites, you may need to invest in utility upgrades to ensure adequate power for the anticipated charging speed and level of usage.
Maintenance and operations. Like other infrastructure, EV charging stations must be reliable. Reliability is particularly important in Alternative Fueling Corridors to reduce "range anxiety" —a key factor In EV adoption rates. EV charging stations require operators, maintenance and upgrades over time. States may own or lease the chargers themselves or may opt to contract with private companies to purchase, install and own the chargers.
Supplemental funding. NEVI program funds can be spread further by combining them with other eligible U.S. DOT funding for EV charging infrastructure projects. The key is for a project to meet eligibility requirements for both programs and for the total federal funding to not exceed 80% of project cost.
Given that state and local governments are not in the business of operating EV charging stations, many implementations to date have been delivered via public-private partnerships. The NEVI formula program actively encourages state governments to partner with private entities that can provide expertise and free state agencies to focus on their core missions.
Guidelines will be available soon for another new IIJA program, the $2.5 billion Discretionary Grant Program for Charging and Fueling Infrastructure. Comprising two separate $1.25 billion grant programs, the Discretionary Grant Program is intended to ensure that charger deployment meets such policy goals as increasing access to charging in rural areas, building resilient infrastructure, slowing climate change, and increasing EV charging access in underserved and overburdened communities.
Seizing the EV infrastructure opportunity
IIJA represents a once-in-a-generation opportunity to expand EV infrastructure nationwide. Following plan submissions, approvals will be granted by September 30, 2022.
However, developing a five-year plan that receives approval will be a demanding task for most states. One option for success is to partner with a real estate advisor that understands both how to navigate federal grant programs and the site specifics for EV charging. Your advisor can provide essential assistance in mapping your EV charging sites, negotiating with landlords and creating agreements with EV charging network operators to realize your EV infrastructure vision.
Get started on your EV infrastructure planning – today. For more information, check out Infrastructure Advisory or reach out to us.
