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HB 1584 stipulates that any municipality requiring property owners to install EV charging stations pay for those installation costs. Some municipalities in Missouri created requirements for property owners to build EV charging stations on new construction and major renovations—this law would ensure that private property owners aren’t forced to bear the costs of government-mandated construction.

Retrofitting an existing parking space with EV charger equipment can cost thousands of dollars per space, so sorting out who pays for what is not unreasonable. Despite what some opponents claim, this bill doesn’t “block” EV market growth; it simply ensures that private property owners aren’t told where and when to spend more money.

Another objection to this bill is related to costs. It costs much less to outfit a parking space with EV charger equipment during construction than after. Some estimates say installation during construction rather than after could cut costs by 75 percent. And with thousands more EVs hitting the road each year, opponents of the bill claim it would be better to require building charging stations as cheaply as possible to accommodate EV market growth.

This gets it backward. It may indeed be cheaper to install chargers during original construction, which is something property owners can take into account if they wish to respond to a growing EV market. Accommodating an emerging class of customers is standard business practice and doesn’t require any mandates.

Lost in the discussion surrounding HB 1584 are several better policies state and local policymakers can pursue to improve the EV market. For charging stations, municipalities can streamline their zoning rules to allow EV chargers in all zoning districts, review EV charger installation permits in days rather than weeks, and make information about the permitting process much more transparent. To make it easier to purchase EVs, state lawmakers can allow Missourians to buy EVs directly from manufacturers rather than forcing them to go through a franchised dealership (which many new EV companies do not have).

HB 1584 is a step in the right direction, but it’s a narrow bill that only deals with protecting private actors from an onerous government mandate for EV charging station construction. I’m hopeful that future EV policy discussions can turn from talks of fines and mandates to free markets.

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The biggest problem with the Loop Trolley is that nobody wants to ride it. During its 13 months of operation, ridership was under 10 percent of expectations, which led to equally depressing revenue shortfalls. Time and again, trolley management turned to taxpayers to fill its budget gaps, ultimately pouring $51 million of other people’s money into the project. One of those funders, the Federal Transit Administration, issued an ultimatum to the Loop Trolley Transportation Development District (LTTDD): either restart the trolley or pay back $37 million in federal grants.

Show-Me Institute analysts have been issuing warnings about a taxpayer-funded trolley with minimal demand for more than a decade, so this is not your average “I told you so.” But now that Bi-State has decided to clean up the Loop Trolley’s mess, let’s hope it has a good plan.

Bi-State should do what it can to reduce the overall taxpayer burden. As of now, trolley funding will come solely from the LTTDD’s sales tax on loop shoppers, which will not be enough to run the trolley for long. One way to potentially reduce taxpayers’ burden is to sell advertisement spots on the trolley. (Yes, even park bench personal injury lawyers—somebody needs to represent the owners of the cars the trolley kept managing to hit last time).

Bi-State can also lessen taxpayer burden by charging passengers to ride the trolley. Currently, Bi-State is considering letting passengers ride for free. If the thinking is that this revenue would be too small to make a difference, Bi-State should remember that people voluntarily paying to ride the trolley is better than reaching into the pockets of people who don’t ride the trolley. Charging fares from the start would be better, but if Bi-State decides not to do that, it should at least try to boost ridership to the point of charging fares. Whether that’s seasonally themed rides, reaching out to business and marketing students at Wash U for consulting, or any other novel idea, boosting ridership to the point of charging for fares should be the goal.

The trolley is coming back whether we like it or not. Let’s hope Bi-State finds a way to get taxpayers off the hook.

The post What I Would Like to See from the Resurrected Trolley appeared first on Show-Me Institute.

More transmission lines will need to be built to relieve this congestion. The two regional electric grids that Missouri belongs to—the Midcontinent Independent System Operator (MISO) and the Southwest Power Pool (SPP)—have released a draft study identifying several points along their shared electric grid borders—including spots in Missouri—where new transmission projects can help relieve congestion and increase connectivity between different grids.

The study noted several benefits of a more interconnected transmission network. Given that MISO and SPP’s wholesale energy markets select the lowest-cost electricity sources to meet regional demand, a more connected grid allows the most efficient power plants to produce electricity for a wider region. Greater transmission connection also increases reliability, as more power can flow between larger geographic areas in case one spot has trouble meeting electric demand.

The study estimated that the total benefits to customers in the MISO and SPP regions would be roughly $1 billion, savings which would cover a little over half of the expected $1.8 billion cost. It is important to note that these numbers are self reported, although the benefits of more integrated markets and transmission networks are widely understood.

Evidently, the need for expanded transmission capacity in Missouri has caught state legislators’ eyes. However, as I described recently, the bills in the House and Senate take the wrong approach to building out more transmission capacity. These bills give incumbent utilities veto power for new transmission construction proposals. Instead, Missouri should embrace a competitive bidding process, which on average cuts costs by 40 percent.

Electric delivery costs, which include transmission and distribution, are a growing fraction of the cost of providing electricity to customers. Given Missourians’ already rapidly rising electricity bills, policymakers should be keen on finding ways to reduce costs.

Missouri could benefit from expanded electricity transmission, but there are good ways and bad ways to go about doing that. Let’s hope legislators come down on the side of market forces and competition.

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Under the proposed plan, Bi-State would operate the trolley while the Loop Trolley Transportation Development District (LTTDD) would still be liable for it financially. Bi-State would enter into a managerial and logistical support contract with the LTTDD without transferring ownership of the trolley. Leaders of the LTTDD are also asking Bi-State to reconsider the $1.26 million of federal traffic congestion and air quality improvement grants it denied to the trolley late last year.

The catch with restarting the trolley after years of broken promises and operational failures is that the federal government is threatening to claw back $37 million of grants that were used to build the trolley. At this point, the most sensible decision would be to do whatever would cost taxpayers less. This would mean doing some hard math, which I described here previously. The agenda for the Friday meeting does not indicate that a cost–benefit analysis has been undertaken.

And just as a reminder: $51 million of taxpayer’s money has already been spent on the trolley with little to nothing to show for it. As an example of things that can actually be done with that amount of money, India sent a satellite into orbit around Mars on a slightly larger budget of $74 million. I am neither advocating spending another $23 million on the trolley nor sending the trolley to Mars. But I do wish that the Loop Trolley developers had been as resourceful with our money.

But now that I think about it, sending the Loop Trolley to Mars might not be such a bad idea . . .

The post St Louis Reconsiders the Loop Trolley . . . Again appeared first on Show-Me Institute.

Saint Louis County, Saint Louis City, and Brentwood have decided to mandate that new construction and major renovations for several types of properties (residential and/or commercial, depending on the jurisdiction) must be accompanied by EV charging stations. None of these mandates consider the $5,000-per-charger cost businesses will face, and some of these regulations impose a substantial fine for being a day late and an EV charger short.

Some places—like apartments and office buildings where people park for hours at a time—are a good fit for EV chargers. But for other places, a charging station could actually be a liability. Think of places like diners or convenience stores, whose business models rely on getting people in and out quickly. The last thing the owner of a small diner needs is someone who comes in and occupies a table for an hour or longer, nursing a coffee while his car charges. That’s why decisions about where the chargers should be installed are best left to businesses rather than being determined by a one-size-fits-all government mandate.

If local officials want more EV charging stations, perhaps they should first clarify where they can be built rather than dictating where they must be built. Ironically, the municipal codes for the Saint Louis jurisdictions mandating chargers are mum about where chargers can be built outside of the areas where they are mandatory. This lack of clarity results in several weeks of permitting and site plan reviews, which often vary by jurisdiction. This is backwards. Dozens of municipalities nationwide have amended their codes to allow EV chargers to be built wherever property owners see fit and have fast-tracked the permitting process to finish, in some cases within a day. For example, Kane County, Illinois, and Bellevue, Washington, allow EV chargers to be built in all zoning districts. Several states, such as New Jersey, New York, and Oregon, have classified the installation of EV chargers as “minor work,” which helps speed up installation times and cut down on permitting costs. Chicago grants EV charger installation permits within a day and even provides a guide for the installation process. These are all simple ways to speed up the proliferation of EV chargers without twisting anyone’s arm.

Local officials are right to recognize that fueling an EV is different than fueling a traditional car. Due to the time it takes to charge, EV drivers won’t be waiting in lines at centralized “electron stations.” Rather, they’ll incorporate charging into their everyday life. As more Missourians buy EVs, it will make good business sense for more businesses and property owners to install EV charging stations, either to retain current customers or attract new ones. What EV driver wouldn’t the option of charging his or her car while at the grocery store or while typing away at work? Likewise, charging stations at apartment complex could become an appreciated—or even expected—amenity for prospective tenants.

Policymakers could also make it easier for Missourians to buy EVs. Currently some uncertainty exists about the validity in Missouri of the direct sales model that many EV companies use to sell their cars. Several years ago, Tesla was taken to court over the legality of selling its cars to customers without using a franchised dealership. While Tesla eventually won, it’s not clear if other EV companies would be granted the same freedom to sell. With many more EV companies using direct sales entering the market, ensuring they can operate in Missouri can bring EVs to thousands more residents.

EVs come with many benefits. They help improve local air quality and reduce the transportation sector’s overall environmental impact. For Saint Louis EV drivers, charging their EV at home can lead to hundreds of dollars of fuel cost savings each year compared to a gasoline-powered car. EVs have lower lifetime maintenance costs than gasoline-powered cars. EVs can succeed on their own merits; forcing the hand of property owners is the wrong way to speed up the EV adoption process.

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Electric transmission lines carry electricity from power plants to your home or business. Too much electricity on a line increases the risk of frying a line, and as I’ve written before, several parts of Missouri have overloaded transmission lines already.

More transmission will need to be built, but these bills take the wrong approach to building more transmission lines.

The bills (which are identical House and Senate versions) would allow Missouri’s monopoly utilities to pre-empt any competitor that might build transmission lines for less. The monopolies would have the “right of first refusal” to build any transmission lines over 100 kilovolts (kV) if they connect to a facility owned by the monopoly, even if the location of that transmission line is outside the monopoly’s territory. Lines greater than 100 kV are used for long-distance transmission of electricity, in contrast to local distribution lines (the power lines you see by city streets and neighborhoods) which typically have capacity under 69 kV.

Why is the legislature proposing these measures? Removing any sort of competitive bidding process to construct transmission lines has made projects across the country more expensive. A study from the economic consulting firm The Brattle Group concluded that projects not subject to competitive bidding have cost over 34 percent more than the original estimates. In contrast, transmission line projects that were subject to competitive bidding have been on average 40 percent less expensive than original estimates. All transmission lines are built to standards set by the North American Electric Reliability Council, so competitive cost savings don’t come at the expense of quality.

Wouldn’t it be better for the legislature to propose subjecting transmission lines to competitive bidding, rather than shielding them from it? Since transmission costs are ultimately passed on to customers, it’s customers who bear the brunt, or receive the benefit, of cost-inflating or cost-saving policies.

Missouri will need more electric transmission lines built in the coming years. To build those lines at the lowest possible cost, Missouri needs more free-market activity in transmission projects, not less.

The post Missouri Needs More Free Market Activity in Electric Transmission, Not Less appeared first on Show-Me Institute.

The Federal Transit Administration (FTA) is threatening to claw back the $37 million in grant money it gave to get the Loop Trolley up and (briefly) running. According to the FTA, trolley officials must submit a plan by February 1 to restart the trolley by June 1, and the plan must include at least three cars running four days per week.

According to the FTA’s regional director, any potential litigation over the money the FTA wants back would involve the Loop Trolley Transportation Development District (LTTDD) and the East West Gateway Council of Governments. This is because while most federal money the LTTDD received from the federal government came directly from the FTA, some also came via grants distributed by the East West Gateway.

Saint Louis area officials are concerned that failing to get the Loop Trolley running again would make it harder for the Saint Louis region to receive future federal transportation grants.

So what should be done about the trolley?

At this point, the most sensible decision seems to be whichever would cost taxpayers less—either running the trolley to satisfy the FTA’s conditions or paying back the $37 million.

However, it’s not clear how many years the trolley would have to operate to satisfy the FTA’s terms. According to a letter from the FTA’s regional director to the Saint Louis City mayor, grant recipients must operate the project throughout the useful life of the property, which the regional director specified as between 12 and 40 years in the trolley’s case. But with the Loop Trolley’s operating budget of slightly over $1 million to run only two vehicles (and add in any additional costs from maintenance and indirect costs to Loop businesses), there are a number of variables that make it difficult to accurately calculate  whether operating the trolley will cost less than paying back the grant.

Assuming the variables can be nailed down, it is possible to do the math and see which option is better for taxpayers. The problem is that even if, by the numbers, running the trolley is the less expensive option, that does not mean it actually will be. Any effort to restart the trolley would need to avoid the blunders that dogged the construction and past operation of the trolley in the first place.

If only the federal government guarded its (our) money this closely all the time.

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So what do some in the Missouri Legislature want to do with this burgeoning market? Subsidize it, of course. A bill prefiled in the Missouri House would subsidize Missourians for a purchase many are already making by giving out a thousand-dollar refundable tax credit for each EV purchase.

This is so redundant and unnecessary that even Elon Musk wouldn’t support it.

In a recent interview, Musk favored ending subsidies of any kind for all vehicles, whether gasoline or battery-powered.

When asked about the possibility of an up-to $12,500-per-EV tax credit being considered in Congress, Musk criticized it as unnecessary. While most makes of electric vehicles still qualify for the existing $7,500 federal tax credit, Tesla’s cars—which made up over two thirds of all EV purchases this year—haven’t for several years. Admittedly, Musk’s market power may account for some of his opposition to EV tax credits.

Musk also criticized the $7.5 billion dedicated to building EV charging stations in the recently passed federal infrastructure bill, saying that if gas stations don’t need support, EV charging stations shouldn’t either. If he doesn’t support these subsidies, I can’t imagine he’d support Saint Louis-area governments mandating new construction and property renovations being built with EV charging stations.

If the godfather (or Dogefather?) of electric vehicles thinks EV tax credits and subsidized charging stations are unnecessary, shouldn’t we?

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The study grades each state from A through F on several factors relating to electricity market design and competition. On most of the important criteria in the study, Missouri gets few of the answers right. For example, while some Missouri utilities do participate in wholesale electricity markets, where grid operators select the lowest-cost electricity to meet demand, in no part of Missouri do customers get to choose their electric service from among competing providers. Moreover, monopoly utilities are not required to submit requests for proposals to find the lowest-cost new generation portfolio. Monopolies utilities can simply build the generation portfolio themselves, potentially at higher cost. This lack of a competitive market means that hardly any power plants in Missouri are owned and operated by non-monopoly utilities.

Not having a competitive market comes with its costs, and lately Missourians have been paying the price. For instance, customers of states that allow them to choose from competing retail electric service providers have seen their prices decrease 17 percent since 2008, whereas the average Missourian has seen his prices increase 17 percent during the same time period. Additionally, flexibility in choosing electric service providers appeals to businesses, as they can negotiate their own contracts and pursue their own electric generation goals.

If lawmakers want to reverse rising electricity prices in our state and create a more competitive and business-friendly environment, they don’t have to look far. Illinois received the second-highest grade in this study and has competitively structured electricity markets. As a result, its prices have decreased 13 percent since 2008. Based on these facts, shouldn’t lawmakers consider allowing greater competition in Missouri’s electricity markets?

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The rule they’re considering would require electric vehicle charging stations be built with “new and substantial renovations and additions [at least 50 percent of the unit’s final floorspace] on single-family two family and townhomes and new multi-family residential developments.” The Brentwood Planning and Zoning Commission rejected a similar proposed mandate last month, but the Brentwood Board of Aldermen has revived the idea, with the Brentwood mayor indicating they may pass a bill on the matter.

Each EV charger costs an average of $5,000 to install, but it is still unclear who will pay for them. Ameren offers property owners subsidies for EV charging stations up to half the cost, but that still leaves thousands of dollars unaccounted for.

Additionally, their deliberations are vague concerning how many EV charging stations would be required per property. Would it be one per family in the case of townhomes? Would it be a percentage of total parking spaces available, as the new Saint Louis County ordinance requires? Would families that don’t use an EV be paying for their EV-driving neighbor’s charging station?

The board of aldermen’s proposal is not finalized, but the idea should be rejected. Let property owners install EV charging stations at their own pace based on the market demand for them. EV charging stations have grown rapidly across the country for the past several years without mandates like the one Brentwood officials are considering.

In the near future, equipping townhomes and apartments with EV charging stations may indeed make good business sense, either to keep existing tenants or attract new ones. But shouldn’t business and property owners be the ones deciding where to place EV charging stations rather than government officials?

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Missourians have little recourse to deal with these rising costs. Missouri’s retail electric markets are monopolized, meaning that each Missourian only has one possible electric service provider.

But it doesn’t have to be this way. As I have written previously, thirteen states and the District of Columbia allow customers to choose between competing electric service providers. Looking at the time since competitive markets matured in 2008, the results have been quite encouraging, as shown in the graph below.

Source: Energy Information Administration

Missourians are losing ground when it comes to overall electric prices, too. In 2008, Missouri’s prices were quite low—43rd-highest overall electricity prices nationwide. Missouri’s prices now sit in the middle of the pack at 29th, due to the rapid price increases shown in the graph above.

Across every sector, competitive states are outperforming monopolized states—and especially Missouri—when it comes to lowering prices. Competition has helped make the electric service industry in those states more efficient and has passed on savings to customers. If lawmakers want to reduce the cost of living for Missourians while enhancing their economic freedom, they ought to consider embracing retail electric competition.

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