Tuesday, May 17, 2011

PEVs and fuel taxes, Part II

Way back on Valentine's Day, I wrote about the problem of declining fuel-use taxes associated with PEVs, in the context of a discussion about the right and wrong ways to handle "roaming" (recharging away from your primary home / business location.)

Back then, I indicated that states were going to be looking to replace that lost revenue.  Well, it looks as though I wasn't the only one to see that hand writing on the wall.1  A scant nine days after I wrote that entry:
  • a Texas legislator introduced a Bill that would require the Texas DOT to initiate a pilot project to charge a per mile driven tax on electric vehicles, through either a periodic reading of the odometer, or an electronic device installed on the vehicle to report mileage.
  • a Bill was read into the Washington Senate that would impose a $100 / year tax on electric vehicles (the link is to the latest version.)
What I had missed was that an Oregon legislator had already introduced a Bill about a month earlier to establish a per-mile vehicle use tax (based on either electronic reporting of mileage or location tracking), which you can bypass if you're willing to pay a flat $300 / year fee.  For PHEV (Plugin Hybrid Electric Vehicles, that can either use an engine or an outlet to recharge) owners, the bill apparently allows one to petition the state for a refund of fuel-based road use taxes.

At this point, none of these measures has been passed, though none of them has died yet, either.

Sometimes, I hate to be right.

But the question is raised, which is the more appropriate measure?  There seems to be movement in the direction of both really invasive (mileage reporting) to ridiculously invasive (location tracking) and non-invasive KISS-principle (annual fee tacked on to vehicle registration.)

It seems to me that the cost of more invasive methods outweighs any advantage there may be in equitable allocation of tax burden, though I imagine that the DOT planning gurus would love to have the vehicle transit data. The hitch is that you have to pay to collect and secure a lot of personally identifiable information, and then there's the problems (real or imagined) that may arise from one government agency (the DOT) having information that another government agency (law enforcement) may want, whether there are protections on that information or not.

It seems to me that a not-unreasonable compromise would be a flat fee that factors in vehicle weight, but I'm not a Civil Engineer, so I don't know how well that compares to the wear and tear a given vehicle puts on roads.

UPDATE: Had a really useful and thought-stimulating conversation with Robert Burke of ISO New England who made a very good point about the "gas station model."  In many states there is legislation (or administrative rules) prohibiting the resale of electricity.  It's a good point.  (Thanks, Rob!)

It seems to me that there are a few possibilities to deal with that:
  1. Have the utilities own the recharge facilities, which leaves them dealing with fuel use taxes, possibly for differing jurisdictions, which they may not want to deal with, as I discussed back in February.
  2. Use existing legislation or rules that allow for various kinds of market aggregation, which may need to be tweaked to deal wit PEVs.
  3. Put explicit exceptions to a prohibition against resale of electricity for transportation in the legislation that deals with fuel taxes (perhaps just transferring the collection of those taxes to public recharge facilities.)

The easiest solutions, involving maximum re-use of existing structures and systems, should not be bypassed in favor of different models, just because this thing is called "new."   Particularly where there are already robust systems that deal with the questions at hand.

1 For those inclined to correct me to "handwriting on the wall," I refer you to the origin of the idiom, the Biblical Book of Daniel, Chapter 5.

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