Submitted By
Emily A. Egan, Development Services Director
Agenda Item Title
Title
A Presentation and Discussion Regarding the Establishment of a User Fee for Electric Vehicle Charging Stations Owned and Operated by the Village of Oak Park
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Overview
Overview
Pursuant to Village Board direction during the budget process, staff prepared a presentation for the Board’s consideration of the establishment of a fee for the Village’s publicly accessible electric vehicle (EV) charging stations.
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Anticipated Actions/Commitments
Recommendation
Pending Village Board direction, staff plan to prepare further analysis and a draft Ordinance for a first reading at a future meeting of the Village Board.
Report
More than 25% of Oak Park’s greenhouse gas emissions are due to conventional cars and trucks, making this the second largest driver of climate change in the Village. As part of the Climate Ready Oak Park (CROP) plan established in 2022, the Village strives to reduce greenhouse gas (GHG) emissions by 60% by 2030 and 100% by 2050, becoming a net-zero, or carbon-neutral, community. While several short- and long-term actions can be taken towards the interim 2030 and the net-zero 2050 goals, one such action, as outlined in Goal TS02, is increasing access to EV charging infrastructure, particularly for residents without private parking.
As the Village’s public EV charging station network grows, fixed and variable costs will undoubtedly increase. Fixed costs include cellular connectivity/software, hardware, and planned maintenance. Variable costs include electric utility charges as well as repair and replacement costs not covered by planned maintenance or manufacturer’s warranties. Attached to this agenda item is a staff memo to the Village President and Board of Trustees dated September 26, 2023. This memo provides detailed historical information and data regarding the Village’s EV charging station network.
A fee for use of the Village’s EV charging stations would ensure the long-term financial viability of the Village’s charging station network and provide for a sustainable path forward in expanding access to charging station infrastructure, particularly for residents without access to private parking facilities.
There is currently no user fee for any of the 26 publicly-accessible Village-owned and operated electric vehicle charging stations. Users can simply download and begin a charging session using the free ChargePoint mobile application. The user is, however, responsible for the associated fee for parking in the surface lot or parking structure, if applicable.
Figure A outlines the annual expenses associated with the operation of the Village’s EV charging station infrastructure.
Figure A
On average, charging sessions at the Village’s stations in 2023 were 2.5 hours in duration and used 11.59 kWh of energy. Excluding any applicable fees for parking the vehicle in a surface parking lot or parking structure, there was no fee for use of the charging stations. Staff conducted research on other public entities that own and operate publicly-accessible charging stations. Figure B outlines the findings of this research, including an estimate of the fee that would be charged using the Village’s average charging session of 2.5 hours in duration using 11.59 kWh of energy.
Figure B
All of the Village’s publicly-accessible EV charging stations are dual-plug with powershare capabilities. This means that if two vehicles are plugged into the station simultaneously, the energy output per plug decreases. Due to the powershare capability of the Village’s charging stations, staff recommends that a user fee be assessed on energy output (kWh) as opposed to charging session duration.
The ChargePoint software will allow the Village to seamlessly administer a user fee, with revenue subsequently remitted to the Village on a monthly basis. It should be noted that ChargePoint charges a 10% processing fee on all transactions. This charge will be added to the customer’s charging session transaction. Furthermore, if the Village Board wishes, the Chargepoint interface allows the Village to administer a resident discount for charging sessions. Customers would need to apply for this discount through their ChargePoint account. Village staff would then verify residency by confirming the vehicle’s Village Vehicle License.
Figure C outlines the revenue implications of a $0.10/kWh user fee. An average charging session, using 2023 utilization data, would cost a driver $1.16 plus a 10% processing charge ($0.12) for a total of $1.28.
Figure C
Figure D outlines the revenue implications of a $0.15/kWh user fee. An average charging session, using 2023 utilization data, would cost a driver $1.74 plus a 10% processing charge ($0.17) for a total of $1.91.
Figure D
Figure E outlines the revenue implications of a $0.25/kWh user fee. An average charging session, using 2023 utilization data, would cost a driver $2.90 plus a 10% processing charge ($0.29) for a total of $3.19.
Figure E
Additional analysis of each fee option as well as other alternatives that could be taken by the Village Board are discussed further in the “Alternatives” section of this agenda item commentary.
In addition to seeking direction on the potential establishment of a user fee, Village staff seeks Village Board direction as to which fund the revenue from a proposed EV charging station user fee would be remitted. Currently, all expenses associated with the Village’s EV charging station infrastructure are paid using the Village’s Parking Enterprise Fund. Pursuant to the Village Board’s goal of Sustainability and Resiliency, Priority 4: Maintain a Viable Sustainability Fund, staff shall identify, review, and seek Board direction on revenue options for Climate Ready actions, including funding transportation-related actions through the motor fuel tax and fee-based EV charging.
The Village’s Parking Fund is an enterprise fund. Enterprise funds are distinguished from other Village Funds in that they are often run similarly to a business and are funded by user fees rather than taxes or other revenue sources typically assessed to the public for funding general Village operations. Effective January 1, 2023, the Village implemented numerous revisions to its daily parking fee structure at parking structures, its pay-by-plate parking fee structure, and its quarterly parking permit fee structure. These revisions were the result of a comprehensive review of parking fees undertaken by the Village Board during the Fiscal Year 2023 budget process. These fee revisions have resulted in improved revenue streams for the Parking Fund, however, the fund continues to experience a structural deficit due to continued capital improvement expenses and debt service obligations. It should be noted that the Fiscal Year 2023 anticipated year-end surplus is due to cost savings on capital projects, deferral of capital projects for various reasons, and most notably, the lost revenue transfer of $1,628,896.00 from the Village’s American Rescue Plan Act (ARPA) Fund.
Additional analysis of the potential options for where to dedicate the revenue from a user fee for the Village’s EV charging stations is included in the ‘Alternatives’ section of this agenda item commentary.
DEI Impact
A user fee for the Village’s EV charging stations has the potential to be regressive in nature since it will more heavily impact low- and moderate-income individuals. The user fee could, however, provide a dedicated revenue source for operational expenses and fund new and expanded EV charging infrastructure in the Village. As part of the Climate Ready Oak Park (CROP) plan established in 2022, the Village is striving to reduce greenhouse gas (GHG) emissions by 60% by 2030 and 100% by 2050, becoming a net-zero, or carbon-neutral, community. While several short- and long-term actions can be taken towards the interim 2030 and the net-zero 2050 goals, one such action, as outlined in Goal TS02, is increasing access to EV charging infrastructure, particularly for residents without private parking.
Staff will continue to closely monitor EV charging station utilization after the establishment of a user fee to determine if the user fee impacted the utilization of the stations. Furthermore, regardless of the impact on utilization, staff will need to continue to communicate to the community any and all consumer rebates offered for the purchase of electric vehicles and/or electric vehicle charging stations. These rebates can alleviate some of the financial barriers that exist for low- and moderate-income individuals seeking to transition to alternative fuel vehicles.
In preparing this presentation, staff worked with the Urban Efficiency Group of the Cross Community Climate Collaborative (C4). C4 is a project of co-lead organizations Seven Generations Ahead and the Urban Efficiency Group and the Villages of Broadview, River Forest, and Oak Park designed to bring Black, indigenous, and people of color and non-minority communities across income lines to share ideas, secure resources, and drive large-scale projects within and across communities that achieve greenhouse gas (GHG) emissions reductions, equity and sustainability goals. The Urban Efficiency Group was supportive of the Village’s interest in establishing a user fee given that any net revenue could be used towards expanding electric vehicle infrastructure.
While cost continues to be a barrier to purchasing an electric vehicle, there are several factors that have and will continue to lessen this barrier to purchase. A new incentive established through the 2022 Inflation Reduction Act provides a tax credit of up to $7,500 if you buy a new, qualified plug-in EV or fuel cell electric vehicle (FCV) from 2023 to 2032. Additionally, based on a 2024 report by the Urban Efficiency Group, some automakers project the upfront costs of EVs will continue to decrease, reaching purchase price parity with conventional vehicles around 2025 to 2030.
Alternatives
Policy Question 1: Should the Village Impose a User Fee for EV Charging Stations and, if so, at What Rate?
Alternative 1 (Staff’s Recommendation): Establish a $0.25/kWh User Fee
Advantages:
• The projected revenue would recoup an estimated 100% of the Village’s operation and maintenance costs associated with EV charging infrastructure
• The projected revenue would provide a dedicated funding source for transportation-related actions outlined in Climate Ready Oak Park, including the expansion of publicly-accessible EV charging stations
Disadvantages:
• The fee is regressive in nature and will more greatly impact low- and moderate-income individuals
Alternative 2: Establish a $0.15/kWh User Fee
Advantages:
• The projected revenue would recoup an estimated 79% of the Village’s operation and maintenance costs associated with EV charging infrastructure
Disadvantages:
• The projected revenue does not fully recoup operation and maintenance costs associated with EV charging infrastructure
• The projected revenue does not provide a dedicated funding source for transportation-related actions outlined in Climate Ready Oak Park, including the expansion of publicly-accessible EV charging stations
Alternative 3: Establish a $0.10/kWh User Fee
Advantages:
• The projected revenue would recoup an estimated 52% of the Village’s operation and maintenance costs associated with EV charging infrastructure
Disadvantages:
• The projected revenue does not fully recoup operation and maintenance costs associated with EV charging infrastructure
• The projected revenue does not provide a dedicated funding source for transportation-related actions outlined in Climate Ready Oak Park, including the expansion of publicly-accessible EV charging stations
Policy Question 2: What Should Revenue from an EV Charging Station User Fee be Used to Fund?
Alternative 1 (Staff’s Recommendation): Dedicate user fee revenue to the Sustainability Fund and transition operation and maintenance costs for EV charging infrastructure as well as the expansion of this infrastructure to the Sustainability Fund
Advantages:
• Depending on the amount of the user fee, this could be a cost-neutral Village service with no fiscal impact to the Sustainability Fund
• Depending on the amount of the user fee, the Village could use a portion of the revenue to fund EV charging infrastructure and other actions outlined in Climate Ready Oak Park
• Having the user fee revenue and EV charging infrastructure expenses contained in the Sustainability Fund will lead to a more transparent budgetary snapshot of the Village’s sustainability initiatives.
Disadvantages:
Depending on the amount of the user fee, transitioning the costs to the Sustainability Fund could be a continual and growing expense for the Fund
Alternative 2: Dedicate user fee revenue to the Parking Enterprise Fund and continue attributing operation and maintenance costs for EV charging station infrastructure as well as the expansion of this infrastructure to the Parking Fund
Advantages:
• Depending on the amount of the user fee, this could be a cost-neutral Village service with no fiscal impact to the Parking Enterprise Fund
• Depending on the amount of the user fee, the Village could use a portion of the revenue to fund EV charging infrastructure and other actions outlined in Climate Ready Oak Park
Disadvantages:
• Depending on the amount of the user fee, keeping the expenses attributed to the Parking Enterprise Fund could be a continual and growing expense for the Fund
Alternative 3: Dedicate user fee revenue to the Sustainability Fund and continue attributing operation and maintenance costs for EV charging station infrastructure as well as the expansion of this infrastructure to the Parking Fund
Advantages:
• 100% of the revenue from the user fee could be dedicated to funding EV charging infrastructure and other actions outlined in Climate Ready Oak Park through the Sustainability Fund
Disadvantages:
• The Parking Enterprise Fund would incur a continual and growing operational expense and recoup none of the revenue from a potential user fee