Energy By the Numbers: Electric Vehicles
The idea of charging owners of electric vehicles higher fees in lieu of gas taxes has now spread to the state House, where budget writers proposed Friday hiking the annual fee to $200 by 2021.
The budget also calls for establishing a new annual fee on plug-in hybrid vehicles that would start at $87.50 next year and rise to $137.50 in 2022. Hybrids that don’t pull electricity off the grid would be exempt.
House budget writers are following a similar bill in the Senate that proposes charging $230 for electric vehicles and $115 for plug-in hybrids starting next year. Both proposals call for regular increases in the future based on inflation.
Supporters of the new and higher fees say they are designed to help offset the declining revenue for the state as cars and trucks get better gas mileage or don’t use any gas at all. They say the fees make up for the fact that drivers who run their vehicles on electricity avoid paying North Carolina’s gas tax of 36.2 cents a gallon, which accounts for about 40 percent of the N.C. Department of Transportation’s budget.
Critics of the proposals say the current fee paid by electric vehicle owners, of $130 a year, is more than adequate to offset that lost revenue. They cite a report released by the N.C. Clean Energy Technology Center, a state agency based at N.C. State University, that found that the 11,645 electric vehicles registered in the state this year can be expected to avoid paying $1.15 million in gas taxes, or slightly less than $100 per vehicle.
“EV owners are already paying more than their fair share. It’s unfair to residents and business owners with EVs to have them pay even more,” David Kelly of the Environmental Defense Fund wrote in an email. “This issue has been addressed with the current $130 fee. Anything more is just a penalty.”
The higher fees would be unfair in other ways, critics say. Michael Throop, a retired middle school teacher in Durham, says he and other electric-vehicle drivers think the state should take into account that they’re already paying the state a 7 percent sales and use tax on electricity.
And while the gas tax works like a user fee, with drivers paying more or less depending on how much they’re on the road, the annual fees are the same for everyone. Throop says that’s not fair for someone like him who drives his Nissan Leaf around town.
“As an urban car, it’s great. I only put about 4,000 miles on it each year,” Throop said in an interview. “And I think most of the EVs would be similar; they’re not driving long ranges day after day.”
A Democrat on the House committee considering the proposal, Rep. Ray Russell of Boone, wanted to see the budget amended so that owners of alternative-fuel vehicles would pay according to use, “so somebody that is driving a thousand miles a year isn’t paying the same money as someone driving 30,000 miles per year.”
But Russell could not come up with a way of doing that on short notice Friday morning. Instead, he won passage of an amendment for a study that would look for options.
Senate fees higher
The original version of the Senate bill would have phased in the higher fees on electric vehicles over three years, reaching $275 a year by 2022. The bill was later amended to reduce the top rate to $230 but have it go into effect Jan. 1, 2020. That’s still more than any of the other 19 states with similar fees charge now.
Rep. John Torbett, the House transportation appropriations chairman, said the House is proposing lower fees than the Senate to avoid having higher fees than any other state.
The Senate bill also originally proposed new fees for all hybrid vehicles, including those that generate and use their own electricity from the gas-powered motor or the braking system, but it was amended to target only plug-in hybrids. The House budget proposal went through a similar change in the transportation appropriations committee Friday, at the urging of Rep. Grier Martin, a Democrat from Raleigh.
“That type of vehicle is paying its fair share at the pump,” Martin said of hybrids that generate their own electricity.