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City of T or C plans to build electric vehicle charging stations, apparently without market study or cost-benefit analysis

by Kathleen Sloan | April 1, 2021
8 min read
T or C proposes to install four Level II charging stations, such as these located at an RV park in Myrtle Beach, South Carolina. Each could cost anywhere from $1,000 to $10,000 to construct, according to Sun research. Source: OceanLakes.com

The City of Truth or Consequences will soon enter the electric vehicle charging business, as can be surmised from a publicly unvetted “Request for Proposals” advertised in the Sierra County Sentinel, which specifies that four stations are to be constructed on a site next to the Healing Waters Plaza.

The RFP was issued Feb. 19 and closes May 11.

The city has not presented the project to its citizens, although they will have to pay for the stations’ construction, operation and maintenance, probably out of their electric fees.

During the public comment segment of March 24 city commission meeting, T or C resident Ariel Dougherty brought up the car charging stations, the first mention of the project in a public meeting.

Dougherty has been trying to work with the city’s Public Utility Advisory Board for over a year to amend the municipal ordinance that limits renewable energy production by private solar systems owners. She has explained, in several public meetings, that she personally wants to “get off fossil fuels” by (among other things) owning an electric car. She wants to install a solar energy system at her home that is large enough to charge an electric vehicle, but can’t, since T or C code allows privately owned solar systems to produce only 90 percent of the home’s or business’s previous year’s electricity usage.

Adding insult to injury, residents such as Dougherty and the 53 other local owners of private solar systems will be expected to pay for the city’s electric-car charging business, while being prohibited from generating solar energy that would allow them the option of owning an electric car.  

Limiting individuals’ renewable energy generation development and building city electric-vehicle charging stations go against the city’s October 2014 Comprehensive Plan, Dougherty told city commissioners at their last meeting.  

“The plan states: under ‘Objectives of Infrastructure Goal 6: To allow residents and businesses to harness renewable energies,’” Dougherty said. “The Comprehensive Plan nowhere states that it is a goal of the city to establish electric car fueling stations.”

Comprehensive plans, developed with public input, are supposed to guide land use and city projects. The state strongly recommends comprehensive plans be updated every five years to ensure cities are continually planning and following their plans and aren’t undertaking projects that are not by and for the people. 

The Public Utility Advisory Board, which is supposed to seek community input as part of their vetting of utility projects, has not been consulted about the charging stations, either, Dougherty pointed out.   

“Nor are there any documents of a needs assessment on such a project,” Dougherty said. “Yet I am prohibited from [having a car charging station] through [the city’s limiting] my own potential solar electric use.”

LaRena Miller, director of the Geronimo Trail National Scenic Byway Visitor Center, also spoke during public comment, expressing favor for city-owned electric car charging stations as a means of attracting tourists. In exchange for providing visitor information, Miller is given space at the Lee Belle Johnson building on Foch Street, which is also home to the languishing Spaceport Visitor’s Center. The Lee Belle Johnson building used to be a community activity center, but is now dedicated to serving tourists.

City Commissioner Randall Aragon agreed with Miller, “I think an electric car charging station is a good idea,” he said.

CAR CHARGING STATIONS ARE TYPICALLY A LOSS-LEADER CUSTOMER SERVICE

Will the city will be able to charge a rate that will be competitive enough to be attractive to tourists, but also sufficiently high to reimburse the public purse for the upfront capital costs and ongoing maintenance and operation of the stations?

It is doubtful. Providing a charging service is a poor business prospect, according to a Jan. 25 Forbes article headlined “Can Electric Car Charging Be A Business?”

First, there are the considerations of time and location. T or C’s RFP envisions the construction of “Level II” charging stations, which take an hour to recharge a car for 10 to 20 miles of travel. That means the city’s customers would have to be within easy reach of their hotel or Airbnb and feel comfortable leaving their car for several hours at the charging station.

The Sierra Grande Lodge & Spa and other downtown accommodations are within walking distance of the proposed site near the Healing Waters Plaza across from Daniels Street from the municipal building, but local hospitality providers may decide to offer electric vehicle charging, too, in order to maximize heads on beds, making the city their competitor.  

A residential-type car charger, such as a homeowner or an Airbnb proprietor might desire, would cost on average about $1,200 to install, according to Treehugger.com.  

Commercial Level II stations, such as the four the city’s RFP contemplates, cost about $1,000 to $10,000 each to install, according to EVcharging.enelx.com.

Property Manager Insider estimates the average cost per station is $6,000. 

SemaConnect, a Maryland-based charging station manufacturer, did not give a price for its stations on its website, but stated that such factors as available electric service, site location, data connectivity, materials, labor, permits and taxes all affect pricing.

To be competitive, T or C may need to house its slow-charging stations in a building that would provide shade and security for vehicles that will presumably be charged overnight while their owners sleep. A building is not specified in the city’s RFP. SemaConnect advises that installing Level II charging stations inside a new building with “stub outs” is less expensive than putting them in an existing building with an electrical system that may need to be renovated.  

COMPETITION MAY BE STIFF

The Holiday Inn Express located off I-25 in T or C has six Tesla charging stations, a desk clerk told the Sun. Each station can deliver about 60 to 80 miles of travel in about 20 minutes. The service is free to its guests.

A charging station at a Holiday Inn in Secaucus, New Jersey. T or C’s slow-charging station downtown will have to compete to an unknown extent with the fast-charging service offered free to guests of the town’s Holiday Inn Express at the I-25 interchange. Source: Greenspot EV

Tesla has set up a network of fast-charging stations across the U.S., offering the charging service for free at first and now at a break-even price point of around 28 cents a kilowatt hour, the Forbes article states. Tesla has undertaken this endeavor not because it wants to be in the vehicle charging business, but in order to sell electric vehicles. The city’s slow-charging stations would need to be out of range of, or cheaper than, a Tesla station to make them a preferred tourist service.

The largest vehicle charging business that is trying to make a profit on that service, the Forbes article states, is Electrify America/Electrify Canada. It charges 43 to 55 cents per kilowatt hour for fast-charging stations, a price point that is not yet competitive in an era of cheap gas and hybrid cars.

The vast majority of electric vehicle owners charge at home, the Forbes article states, because it is economical and can easily be accomplished overnight. The slow-charging process takes hours, which is the major reason commercial charging stations are poor business prospects.  

The Forbes article emphasizes that electric vehicle owners don’t travel without first determining the location of stations along their route, as well as their hours of operation, number of fast- and slow-charging outlets, price and condition of the station. Many stations that were built with government subsidies have fallen into disrepair, are in inconvenient locations or are now out of service, the article states. The city’s charging stations must therefore be “networked” 24/7 via a smart-phone app to be viable. Connectivity to the app service is not included in the city’s RFP, but will be an additional ongoing expense. 

Whether T or C intends that its stations will subsidize tourism, break even or make a profit should have been assessed in a cost-benefit analysis made available to the public before the city issued an RFP. The city should not expect residents to subsidize car charging for out of towners without the residents’ consent. Residents are already subsidizing tourism by paying for the Lee Belle Johnson building’s operation and upkeep.

LODGERS TAX FUNDS INTENDED TO SUPPORT TOURISM MAY NOT BE AVAILABLE FOR THIS PROJECT

Municipal Lodgers Tax funds are the state-sanctioned means of promoting tourism. T or C contracts with tourism-related businesses, such as the Geronimo Trail visitor’s center, which receive Lodgers’ Tax funds for their provision of in-kind services. It would be appropriate to use these funds to pay for the capital costs and ongoing maintenance of the proposed charging stations.

But, at the March 24 city commission meeting, Commissioner Frances Luna reported that the fund does not presently have sufficient reserves to fulfill this year’s requests for support from the usual Lodgers Tax beneficiaries. If the Lodgers Tax fund is tapped out, the likelihood is that utility fees in general or electric fees in particular will pay for the stations.

If so, these revenues will be diverted from the job of fixing the town’s aged electrical system, whose inefficiency was diagnosed in T or C’s 2014 Comprehensive Plan, prepared in association with Smith Engineering Co. and Consensus Planning of Albuquerque.

“Portions of the distribution network are antiquated. . . . Inherent inefficiencies and the age of the old transformers and distribution network cause excessive loss of energy. Approximately 15 to 20 percent of the City’s annual cost of electricity is due to the losses from this older portion of the distribution system,” the plan’s authors revealed.

The Sun directed several questions about the viability and necessity of the car-charging project to the city commissioners, acting City Manager Traci Alvarez and Electric Department Director Bo Easley. No one responded.

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Kathleen Sloan is the Sun’s founder and chief reporter. She can be reached at kathleen.sloan@gmail.com or 575-297-4146.
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