Growing Efforts to Establish Electric Vehicle Charging Infrastructure Networks Raise Many Legal Issues | Clark Hill PLC


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Utilities in the Midwest, Great Plains and Southeastern states continue to signal their intention to build networks of charging stations for electric vehicles (“EV”) in their respective service territories. In some areas, these efforts have already started to take shape, such as the PowerMIDrive Energy Consumers program established in a approved settlement agreement by the Michigan Public Service Commission.

For example, Consumers Energy Program offers discounts on public charging stations, a discount on direct current rapid charging (“DCFC”) to create a first network of rapid charging infrastructure throughout the company’s electricity service territory, and educational awareness on the benefits of installing charging stations to attract more consumers to commercial locations while retaining the ability to set prices and affordability to reflect individual needs on site. These efforts are supported by the Michigan Energy Office’s Recharge Michigan rebate program and implementation strategy as well as the Michigan Public Service Commission Decisions that for regulatory purposes, “the sale of electricity by the owners of charging stations should not be considered as a resale of electricity. . . or as a sale by regulated utilities. “

While increasing EV usage and charging station incentives provide opportunities for business and commercial entities to offer additional services and attract additional customers, the full lifecycle (i.e. (i.e. pre-installation by removal and disposal) of an EV charging station project involves many practical and legal issues. this must be taken into consideration.

The most basic of these is the design of the project according to the size of the project. For example, the availability of parking space and ancillary business use or uses (e.g., retail, restaurant, car dealership, etc.) will influence the number and type of charging stations to be found. install. Utilities, government, or other incentives available (such as those in Consumers Energy’s service territory in Michigan) are also important considerations, as the amount and requirements of the program may influence initial decisions regarding the selection and installation of the appliances. charging stations.

The ownership and operation of the property and the project should also be taken into account in determining the benefits (e.g. environmental ‘credits’ available, fees charged for use, etc.) and liabilities (e.g. , resolution of easement and land use restrictions, construction costs, operation and maintenance (“O&M”), etc.) will be the responsibility of which entity. Ownership and operation may reside with an owner, tenant, utility, charging station vendor, other third parties, or involve a combination of these entities. Resolving ownership and operating issues will also likely influence who is ultimately responsible for obtaining any special permits or zoning permits. It also helps analyze whether business entities providing charging services are allowed to provide this form of electrical service without being regulated by a utility commission. In some states, a non-utility entity selling recharging services could be considered a retail “redistribution” of electricity, which is the primary right and obligation of the local electric utility, requiring a special license. Various regulatory circumstances may require alternative approaches or business models to offer customers the use of a charging station, for example without technically selling the electrical service. Other property issues that need to be addressed also include the organization, negotiation and authorization of new infrastructure and utility easements as well as the design and construction work itself. Again, this problem can be complicated if the party looking to install is not the owner of the property, as installing the charging station can involve the value of the property and could be a barrier to others. future land use plans.

The actual selection of charging stations and contractual supply must also be organized and could be influenced by incentive programs or utility requirements. Given the ongoing developments in commercial EV charging station installations, entities should negotiate these transactions and the underlying business models with flexibility and appropriate due diligence. It is also important to take into account the technological elements of this service, that is to say that in addition to the contractual elements relating to the delivery, installation, operations and guarantees of the physical charging station Customer data, software, IT support, ownership and use of the charging station, payment processing, privacy issues and data security features will also be important. These contractual provisions should be well understood by all parties as they relate to standard contractual issues such as the various obligations of each party, which entity is required to pay which and when, the length of the term, potential breaches and remedies, indemnity and insurance responsibilities. , transferability and what must be done in case of modification of the control law. This last point is particularly important in this area, given the fluid nature of energy technology and associated laws and regulations.

Beyond initial procurement issues, construction issues must also be considered. While the relevant utility will usually install the electrical infrastructure, the party that installs the charging station should be determined in such a way that the operations of the utility, installer and owner or tenant can be coordinated. Necessary upgrades to utility infrastructure, land use rights and restrictions, regulatory approvals and associated costs also need to be confirmed. Clarity regarding the responsible permit applicant and regulatory contact should also be addressed and the impact of construction on surrounding properties and commercial activities should be considered in advance to possibly develop mitigation measures, if necessary.

After construction, the operation of the project also presents issues that need to be addressed. The main one is whether customers have to pay a fee to use the charging station and, if so, how the fees are set, collected, retained, processed and disbursed by and between the parties. Branding or advertising considerations should also be discussed with the party in control, as well as the party responsible for the maintenance and upkeep of the charging station (e.g. the responsibility of the owner of the charging station). site, utility or installer service plan, etc.) In addition, the party responsible for operating malfunctions and the resulting responsibilities must also be clear.

The possible end of the initial term of a contract should also be approached proactively. Potential options to maintain the contract for varying terms, notice requirements, required or optional system upgrades, or purchasing and supplier changes, among others, should be considered during the initial contract negotiation. . End-of-life issues are also important, as the party responsible for the removal and disposal of the charging station and related infrastructure needs to be identified. The potential responsibilities for environmental remediation and compensation should also be addressed in the event that the construction or removal of the charging station results in the release of a hazardous or regulated substance.

As the adoption of EVs and the associated public charging infrastructure continue to proliferate, business and commercial entities should consider the opportunities and benefits of hosting charging stations. However, this requires deliberate, thoughtful and proactive due diligence that considers the long-term practical and legal issues posed by the selection of charging stations, procurement, construction, installation, operation and final termination. For more information or for help with issues with electric vehicle charging stations, contact Stephen A. Campbell.

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