Are electric vehicle charging services regulated 'suppliers' of electricity? Provincial energy regulators are saying no

10 minute read
27 May 2021

Canadian electric vehicle (EV) sales have accelerated over the past decade, with no signs of slowing down. Between 2011 and 2020, the total number of EVs sold in Canada skyrocketed from 460 up to over 53,000 per year. With nearly 200,000 EV motors now whirring along Canada's roads, more and more EV charging stations have sprung up to power them. As of March, 2021, Canada has 6,029 EV charging stations, and counting – a year over year increase of 15%.

When EV drivers go to the "pump", they don't fill a tank by the litre. They fill a battery by the kilowatt (kW) – a fact which has raised novel legal questions for EV charging suppliers and electricity regulators across Canada. The sale or supply of electricity in all jurisdictions is legislatively confined to authorized electrical utilities, who are typically subject to careful regulatory oversight and price control. The owners and operators of EV charging facilities tend not to be authorized utilities, yet facilitate the delivery of electricity to their customers for compensation, a set of circumstances generally attracting regulatory prohibition or regulatory oversight.

A consensus is forming among Canadian electricity regulators that EV charging, despite technically involving the sale of electrons to customers, is not a form of electricity sale or delivery that attracts regulatory oversight. While not all of the votes are in yet, it appears that EV charging stations could continue to proliferate across Canada without the burden of utility-grade regulation and price control.

The sale or supply of electricity is regulated throughout Canada

All provinces regulate the sale or supply of electricity in some form. In some provinces, this means that only those with a distribution license can sell electricity to end users. In provinces with regulatory monopolies, it means that only one "vertically-integrated" utility company is authorized to sell electricity to consumers.
Regulated electricity suppliers go by different names in provincial statutes, as does the regulated act of supplying electricity. However, whether the regulated act is "sale", "retail", "supply", "distribution" or "provision" to end users, the end result is often similar:   

  • In British Columbia, under Part 3 of the Utilities Commission Act, engaging in the "sale, delivery or provision of electricity" for "compensation" places a person in the definition of "public utility", and places the services that they provide and the rates that they charge under regulatory control of the British Columbia Utility Commission (BCUC).
  • In Nova Scotia, under the Public Utilities Act, owning, operating, managing or controlling the "delivery" of electricity for compensation fits the definition of "public utility", placing their rates and services under regulatory control of the Nova Scotia Utility and Review Board (NSURB).
  • In Ontario, under the Ontario Energy Board Act, the "distribution" or "retail" (sale) of electricity is illegal without a license from the Ontario Energy Board (OEB), which is mandated to control electricity rates and services. 
  • In Alberta the Electric Utilities Act regulates "electric distribution systems" and "electric distribution services" which are rate regulated by the Alberta Utilities Commission (AUC), and subjects "retailers" who sell or provide electricity to licencing and regulatory oversight by the AUC.

From a plain reading of these statutes, it is not immediately clear whether or not EV charging fits the regulated definition of electricity sale, supply or distribution. 

What is the proper unit of measurement for EV charging services?

While utilities typically sell electricity by the kilowatt (kW) or kilowatt/hour (kWh), EV charging services have taken a different approach. Though a customer at an EV charging station "pumps" electricity into their car battery by the kWh, the EV charging service typically charges them a "time"-based or "flat" fee. Customers at EV charging stations will receive a bill for the amount of time they spent charging, or for a flat fee for charging their model's battery to a specified extent. This approach to billing suggests that the customer is not paying for the electricity itself, but for the service of having their car battery charged, and may have been adopted in order to reduce the risk of the service being characterized as of the sort subject to regulatory oversight.

There are no regulatory decisions indicating whether the unit of measure has any bearing on an EV charging stations' regulatory status; however there is a federal effort to provide consistent standards for EV charging. While sale of electricity is not federally regulated, the agency Measurement Canada has been developing standard approaches to measurements and sale units for use by EV charging services and regulators. Consultations to inform this federal effort are ongoing.

Some clarity from provincial regulators

So far, all provincial regulators in Canada who have addressed the question of the regulatory status of EV charging stations and services have come to the same conclusion: EV charging stations are not electric utilities, and not subject to regulatory control over their rates and services.

A 2019 Decision (PDF) by Québec's electricity regulator, the Régie de l'énergie, confirmed that EV charging is not a form of regulated electricity "distribution", but rather an unregulated "service." (Through An Act to promote the establishment of a public fast-charging service for electric vehicles (2018, c.25), Hydro Quebec has been permitted to include the costs of its government mandated fast charging network - Circuit électrique - in regulated rates, and the rates charged have been set by regulation.)

In British Columbia in 2019, the BCUC issued Order G-66-19 exempting EV charging services from the provisions of the Utilities Commission Act that regulate the sale, delivery or provision of electricity. This binding Order was pre-authorized by Ministerial Order M104, issued by the BC Minister of Energy Mines and Petroleum Resources.

In Ontario, the OEB issued a policy bulletin1 (PDF) dated July 7, 2016, regarding EV charging. The bulletin concluded that:

  • EV charging stations are not a "distribution system" under the OEB Act and do not require a distribution license;
  • Selling or offering to sell EV charging services is not "retail" under the OEB Act and doesn't require a retail license; and
  • EV charging falls into the category of non-regulated consumer products and services.

In Nova Scotia, the NSUARB found in a recent 2018 decision (PDF) that EV fast charging services are not regulated public utility services. Rather, the NSUARB opined at paragraph 48 that "to propel a vehicle is similar to charging a cell phone, a lawn mower, a portable computer or a flashlight."

In Alberta the AUC very recently investigated the regulatory status of EV charging as part of its broader Distribution System Inquiry, published on February 21, 2021. In the Final Report, they did not issue a final conclusion or decision on EV charging, but observed at page 60 that "most parties were of the view that no additional regulatory oversight is required at this time."

Is a consensus emerging?

While only Quebec's 2018 legislation and British Columbia's 2019 Order are binding, all indications from Canadian provincial energy regulators to date are remarkably consistent in their treatment of EV charging services as unregulated consumer 'loads' on the grid, rather than supply or delivery services subject to regulatory oversight.

[1] These policy bulletins reflect the views of OEB Staff and are not binding determinations by the regulator, but they do provide thoughtful guidance on how the regulator, informed by its staff, is likely to approach the issue addressed.

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