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Columns Tom Baxter

EVs bring big economic questions, along with federal dollars

By Tom Baxter

In hearings over the past couple of weeks, a legislative committee has begun to sort out the issues that are going to come with the ever-increasing electrification of Georgia. There are quite a few, and more we may not have thought of.

Chaired by Sen. Steve Gooch of Dahlonega and Rep. Rick Jaspherse of Jasper, the Joint Study Committee on the Electrification of Transportation will hold a total of five meetings around the state and report its findings in December.

Their agenda covers a host of questions that arise from the most dramatic shift in manufacturing in generations — the conversion from the combustion engine to electric vehicles. Not since the age of Westinghouse and Edison has there been so much money to be made or lost, and so little definition of what the rules for making it will be.

There were three million electric vehicles or hybrids in the United States in 2021, McKinsey & Co. consultant Shannon Peloquin told the committee in its first session. That number is expected to reach 16 million in 2025 and 48 million in 2030 when electric vehicles will account for 15 percent of all vehicles.

The infrastructure bill — aka the inflation reduction bill — gives the move toward EVs a huge boost. Georgia will get a lot of federal dollars to build out its alternative fuel corridors, or AFCs in the new jargon. It already has 1,556 miles of road which fit this description, with usable recharging stations at least every 50 miles.

Along with the dollars come decisions that will affect the state’s economic map. Jannine Miller, the state planning director, told the committee it has prioritized two non-interstate routes to be the first to receive federal money for charging stations. The first, U.S. 441 from Cornelia to Dublin, runs well east of Metro Atlanta on a north-south route. The second, a hurricane evacuation route, connects Brunswick on the coast with Albany in southwest Georgia.

One of the emerging points of conflict is that between the electric provider, which in most cases means Georgia Power, and the small operators who are going to run the charging stations.

“Quite frankly, I see the day when probably the biggest place [for charging stations] is going to be a durn Cracker Barrel because at least you’ve got time to go eat if you’re charging your vehicle on the way to Florida,” said Rep. Alan Powell.

At issue, among other things, is who gets to choose these choice locations, which put substantial weight on the electrical load, and how much flexibility they have in the way they sell the electricity. Currently, Public Service Commissioner Tricia Pridemore said, the charging station operators would be prohibited under state law from selling by kilowatt hours.

Georgia has been a big winner in the race to increase battery and electrical vehicle production, and with that comes more questions. Will Rivian and Hyundai get the same carveout Tesla got, allowing them to bypass local dealers? What’s going to happen to the Kia plant in West Point, which manufactures internal combustion vehicles?

Then there’s the question which was the first one from Chairman Gooch’s lips as the hearings began: “How do we continue to fund the Georgia Department of Transportation?”

That’s the one that is going to be the most vexing, the one that proves just how earthshaking this change in the economy is going to be. The state’s ability to maintain its impressive road system depends on the gas tax, which is much easier to collect than an electrical charge.

Not only is it unclear how the charging stations can be taxed, people are going to be doing most of their charging at their homes, which makes the question of collecting even murkier. The special committee’s report will be just the beginning of a very long effort to fit into a changing economy.

 

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Tom Baxter

Tom Baxter has written about politics and the South for more than four decades. He was national editor and chief political correspondent at the Atlanta Journal-Constitution, and later edited The Southern Political Report, an online publication, for four years. Tom was the consultant for the 2008 election night coverage sponsored jointly by Current TV, Digg and Twitter, and a 2011 fellow at the Robert J. Dole Institute of Politics at the University of Kansas. He has written about the impact of Georgia’s and Alabama's immigration laws in reports for the Center for American Progress. Tom and his wife, Lili, have three adult children and seven grandchildren.

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3 Comments

  1. Jeff Joslin September 21, 2022 10:55 am

    Currently Georgia charges a $200 yearly fee on electric vehicles. With state taxes at $0.26/gal (which are currently waived) you’d have to buy 64 gallons a month to equal the charge placed on EVs. It’s a boon to State coffers and an excessive burden on taxpayers. We must hold our government leaders accountable for increased revenue derived from EVs. I want to support Georgia’s roads but not by being penalized for owning an EV. Any taxes on charging would be another unfair burden on EV owners.Report

    Reply
  2. Sydney September 21, 2022 4:41 pm

    Another way to look at it is to take a vehicle with gas mileage of 35 mpg (current CAFE standard) traveling the average annual mileage from 2019 of 14,263 miles (US DOT) and GA gas tax of $0.291. The result is $119. EV owners are subsidizing ICE owners already. There is no need to look for additional revenue from them.Report

    Reply
  3. Don Francis September 21, 2022 5:50 pm

    The Governor suspended the state gasoline tax for months, yet electric vehicle owners must pay the exorbitant electric vehicle fee.Report

    Reply

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