January/February 2024 Issue

Also in this issue: On Tap – Changes to Wis. Stat. Ch. 125 (Alcohol Beverage) Under 2023 Wisconsin Act 73     |     Julia K. Potter Named Partner     |     Municipal Airports Must Comply With New Law Requiring Improvements Owned by Private Citizens on Tax Exempt Land

EV Charging Bill Would Restrict Local Governments From Owning and Operating Charging Stations

Richard Heinemann | 02.09.24

A bipartisan bill designed to unlock 78 million dollars in federal funds to support EV charging infrastructure has passed the Budget Committee unanimously. To obtain access to the funds, which were approved by the United States Department of Transportation in 2022, the legislature has until March 31st to approve and implement the legislation.

The proposed bill (LRB ²⁸¹³⁄₁) is primarily designed to exempt private businesses from being regulated by the State as public utilities by allowing owners of charging stations to sell electricity obtained from incumbent utilities on a dollar/​kilowatt hour basis. To help defray the cost of road upkeep caused by the anticipated increase in electric vehicle usage, the proposed law would also impose a 3 cent per kilowatt hour excise tax on the electricity sold through charging stations (unless the charging station is located on a private residence).

A product of legislative compromise among a number of stakeholder groups, the proposed bill also includes a number of provisions designed to allow state agencies and local governments to participate in the EV infrastructure buildout, albeit with several important restrictions. 

Specifically, the law would allow state agencies and local governments, including cities, towns, villages, counties, special purpose districts and school districts, to own and operate EV charging stations that utilize Level 1 and Level 2 chargers — if the electricity is made available to members of the public for free. Level 3 chargers may be utilized by state agencies and local governments only for their own fleets. 

State agencies and local governments, however, would be allowed to lease or rent their property to private entities, who could then own and operate Level 3 chargers for sale. 

A Level 1 charger converts alternating current (AC) to direct current (DC) and operates on electric circuits up to 120 volts; Level 2 chargers operate on circuits up to 240 volts. Level 3 chargers are the so-called DC ​“fast chargers.”

Under the proposed law, municipally-owned utilities would not be subject to the restrictions otherwise imposed on local governments. Like investor-owned utilities, municipal utilities would be permitted to charge customers for electricity from EV charging stations on a dollar/​kWh basis under rates approved by the Wisconsin Public Service Commission. The only caveat being that the municipal utility may not transfer revenues from the charging stations to the municipality’s general fund and cannot subsidize the cost of the charging stations with tax revenue. 

Although some legislators have expressed reservations about the excise tax and other aspects of the proposed law, Senate Majority Leader Devin LeMahieu has expressed support for the bill, while Assembly Speaker Robin Vos has indicated ​“openness” to the idea, but skepticism about using federal dollars to spur development of EV infrastructure. Wisconsin is one of only two states that has not thus far passed legislation to utilize the federal money.