US Utilities Have Finally Realized Electric Cars May Save Them (qz.com)

Pity the utility company. For decades, electricity demand just went up and up, as surely as the sun rose in the east. Power companies could plan ahead with confidence. No longer. From a report: This year, the Tennessee Valley Authority scrapped its 20-year projections through 2035, since it was clear they had drastically underestimated the extent to which renewable energy would depress demand for electricity from the grid. But there is a bright spot for utilities: electric vehicles (EV), which make up 1% of the US car market.

For years, that market barely registered on utilities' radar. As EVs find growing success, utilities are building charging infrastructure and arranging generous rebates. Pacific Gas and Electric, Southern California Edison, San Diego Gas & Electric, and New Jersey's PSE&G have partnered with carmakers to offer thousands of dollars in rebates for BMW, Nissan, and other brands. Now utilities are asking Congress for help as they attempt to keep tapping into EV demand. A collection of 36 of the nation's largest utilities wrote a letter (PDF) to congressional leadership on March 13, asking for a lift on the cap on EV tax credits. The signatories' include California's Pacific Gas & Electric, New York's Consolidated Edison, the southeast's Duke Energy Company, and others covering almost every state. At the moment, Americans who buy electric vehicles receive a $7,500 federal tax credit (along with some state incentives) for each vehicle.

Comments

End of Petroleum Taxes

[Oswald McWeany]

Most of us around the world pay taxes on every liter or gallon of petroleum our cars consume. In some countries it's a pretty high tax. If electric vehicles start making up a larger and larger % of vehicles on the road will there come an end where to be fair you need to drop the tax on fuel and instead tax electricity- take a certain % of your electricity usage and put it towards maintaining roads and public transportation?

We all benefit from roads and bridges, even those that don't drive.

Obviously we're still at the stage where most governments are still trying to encourage more electric vehicles, but eventually if electric takes off like planned, it's going to become unfair to place all the burden of taxes to maintain roads on drivers of ICE vehicles. Especially since it will most likely be the poor and impoverished who will be the last to adapt to the new electric-vehicle age.

Re:End of Petroleum Taxes

[hipp5]

While fuel is taxed, it doesn't come close to covering all road costs (at least in the jurisdictions where I know the details). Most road construction and maintenance funds come out of general funds raised by property and income taxes. So while the EV driver (an the cyclist) do pay less in taxes towards the road, it's certainly not accurate to say they don't share at least some of the burden.

Re:End of Petroleum Taxes

[b0bby]

A number of states simply add a fee to the registration of EVs to cover the loss of the gas tax. The problem is, they usually seem to set this at a punitive rate which equals 30k miles per year in a 20mpg truck or something. Despite this, it is an easy solution so will probably spread.

Logically, however, more tax should be paid by the trucking industry since road damage is related to the 4th power of the relative loads; a single loaded truck will cause more damage than 9000 passenger cars. Politically this is unlikely to happen.

Re:End of Petroleum Taxes

[Freischutz]

I think this is why Texas is moving toward a toll road approach. It recenters the price back in relationship to the cost, regardless of how you are powering your usage of the road.

Every time I've seen that idea get raised it turned out to boil down to politicians wanting to be able to hand friends, family and/or faithful party donors a piece of public road so they can exorbitantly tax the public whilst sinking the minimal possible amount of money into maintaining the road.

Re:End of Petroleum Taxes

[Anonymous Coward]

While fuel is taxed, it doesn't come close to covering all road costs (at least in the jurisdictions where I know the details). Most road construction and maintenance funds come out of general funds raised by property and income taxes. So while the EV driver (an the cyclist) do pay less in taxes towards the road, it's certainly not accurate to say they don't share at least some of the burden.

Given that an 18-wheeler requires about 1,500 times the road maintenance one car does, the amount of maintenance required to maintain a road for a year if it were used only by cyclists could probably be paid for by the sales tax you paid on your donut this morning.

Because from eyeballing the charts in that document, it looks like the damage a vehicle does to a road is proportional to about the third or fourth power of the weight of the vehicle - which means the damage a cyclist does to a road is literally negligible.

Cyclists are paying a lot MORE than their share of road maintenance.

Road damage is pretty much entirely caused by trucks, unless there are lots and lots of cars and almost no trucks.

Re:End of Petroleum Taxes

[MightyYar]

Why GPS? Odometers are a century-old technology that you can read at each inspection, and every car already has one.

Re:End of Petroleum Taxes

[Rei]

Almost makes me wonder if the taxes should be on tires, relative to their expected lifespan and predicted road damage. Then you're taxing the object that directly does the damage. If someone does something that will increase the road damage - driving aggressively, carrying large loads, etc - they'll correspondingly burn out their tires faster. Kind of silly that a person can drive around on studded tires (which are very popular here) but pay the same road taxes per unit distance as someone driving around in the same vehicle on soft tires.

Re:End of Petroleum Taxes

[gmack]

I think this is why Texas is moving toward a toll road approach. It recenters the price back in relationship to the cost, regardless of how you are powering your usage of the road.

I recall back in the 80s when I was a child, we visited Switzerland and my father had to buy a road pass at the border. I was small so I don't remember the details but I think it was some sort of toll pass for all of the roads in the country.

In fact, I just looked up the Motorway charge sticker. It still seems like tbe best idea ever.

Re:End of Petroleum Taxes

[DCFusor]

Mod up ^^^ but maybe too sensible for Slashdot. More for bigger vehicles that do all the real road damage (abrasion isn't the worst - load flexure is). Which is why diesel is higher taxed now.

Re:End of Petroleum Taxes

[hierofalcon]

The only thing fair is a head tax. That would be a painful transition, but is really the only thing that is going to reign in spending. We're almost to the point - if we haven't crossed it this year - that the majority of the citizens of tax paying age don't actually pay taxes at the federal level. That's one reason politicians get away with promising things they won't ever be able to deliver and why they keep getting elected. Charge each citizen the same and people might actually care how wasteful government is today. We also might not be as likely to go to war nearly as often or for such questionable reasons.

One head tax bill at the federal level in April. One head tax bill at the state level in October. One city head tax bill in July. One county head tax bill in January. Get rid of the vast majority of the remaining taxes - income tax, sales tax, property tax, lodging taxes - one of the stupidest in my opinion, fuel taxes to name a few. It would probably be hard to get people to dump the sin taxes (tobacco, alcohol, and the like, and to the extent that they actually keep people from damaging themselves I guess they might have a purpose) but really, you could boil most everything down to just those four and adjust the rates each year to cover the budget or pay down debt. Amortize the city, county, and state taxes based on where you lived over the course of the year.

That would be fair and it would likely lead to a tremendous drive to efficiency that has only gotten lip service.

Re:End of Petroleum Taxes

[rickb928]

This argument can be used for virtually any service government could provide. For instance, healthcare, which the government does not and should not provide in the US, but somehow has managed to compel us to purchase in advance, just in case.

Though that is going away, slowly, since it didn't really work out well. Like so many services the government enables the private sector to deliver in an essentially compulsory manner, like college student loans...

Re:End of Petroleum Taxes

[140Mandak262Jamuna]

Yes, you vote for morons who cut corporate taxes and increase personal taxes. So suck it up and pay.

Re:End of Petroleum Taxes

[Octorian]

I used to live in a part of Orlando, FL, where most of the highways were toll roads.
If you lived there, you bought the transponder and forgot about it. Basically, it turned into an automatic "cost of living in this area" tax. (They even had full-speed lanes where locals could skip having to stop/slow at every damn toll booth just to pay up.)

But if you didn't live there, or lived on the other side of town (where you didn't need those highways 75% of the time), then it was a constant burden and/or annoyance. (I'll also bet that the cost of these tolls really added up for the poor, encouraging them to take much longer to get anywhere by getting lost on side-streets.)

In theory, charging for actual road use isn't a terrible idea.
In practice, unless you can make the actual "toll collection" painless for people who aren't local residents of that region, it kinda is a bad idea.

Re:End of Petroleum Taxes

[Green Mountain Bot]

Great thought. But I do worry about unintended consequences. In this case, would we end up with a lot more vehicles pushing their luck on their tires, resulting in a more dangerous road fleet, more fuel consumption, and more pollution? That would have to be part of the calculation.

Re:End of Petroleum Taxes

[Zak3056]

For instance, why would you ever "buy" a boat? You probably can't use it year around no matter where you live and then you need to store it and maintain it and all a boat does is lose value. If you want a boat you lease it and you get a maintenance contract with the lease. Cars? Unless you are a collector you lease your car, and how many Astin Martins can one person buy?

Sales taxes apply to leased items, there's no free ride there. Also, I'm confused as to why you'd suggest a leased boat has no costs associated with storage and maintenance? You lease a boat for, say, three years. What do you do with it in the off season? You don't send it back to the factory at their cost, or expect the leasor to store it for you without charge. Also, the leasee bears the cost of maintenance. Go out and lease a Toyota tomorrow, and I promise you pay for every oil change during the lease period (unless there's a maintenance plan included--in which case, I promise, the cost of it is built into the transaction).

You buy houses, sure, but the taxes on home purchases aren't applied the same way as a tax on a television.

It appears that the GP is advocating changing this--his position (which I advocate neither for nor against) appears to be "Low to no taxes on necessities, higher taxes on luxury items" where I would assume your RE taxes would go DOWN on cheaper properties, and up on more expensive ones.

When you get down to toasters and televisions and computers you have the bread loaf problem. Money doesn't change the number of things you buy, just the quality. The rich might not buy a $500 flat screen, but they probably won't buy that $10,000 flat screen either unless they really thought they needed it.

Someone is buying the $10k flat screen, otherwise they wouldn't be selling it, right? I would imagine that higher taxes would decrease sales on expensive TVs, but maybe not.

A nice, upper end screen with a few more bells and whistles will do just fine. The rich won't buy ten screens, either. Just one or two. They can't watch more TV than the poor.

Not buying this. Your middle class family probably has N+1 TVs today, not one or two (one in every bedroom, one in the family room). If you have a house with 10 bedrooms, you almost certainly have more than 10 TVs. Sure, I'd imagine that most of them would be the $600 60" Vizio TV you'd buy at Walmart, but with a few sets in the $thousands around the house, and the $50k cinema style projector in your swanky house's custom built home theater with the white leather reclining seats that cost more than someone with a McJob makes in a year.

We need to maintain the roads. The "citizens" who benefit the most from roads are corporations. Why don't they pay the fucking road tax for a change?

That might work, might not. Who knows. We all agree (I think) that the roads need to be maintained, and done so with tax money (or tolls, which basically amount to the same thing). If you want to have corporations putting back into the economy, I think you first need to figure out how to discourage them from holding massive cash/equivalents like Apple without driving their profits overseas (like has already happened).

No easily solutions, either way.

Re:End of Petroleum Taxes

[magzteel]

The moment they buy a $500,000+ house or a $50,000 car or a suit over $100, or a $20 restaurant meal, etc- kick in the taxes. Poor people buy cheap food and cheap clothing and certainly don't spend $500,000 on a house or $50,000 on a car.

Necessities shouldn't be taxed, but luxuries should.

Your idea of what constitutes a 'luxury" is seriously broken.

- A $500,000 house in NJ is middle class.
- A suit over $100 is typical department store.
- A $20 restaurant meal? Is that an over $20 entree or the total bill? Most chain restaurants have entree prices in the mid teens. I don't see why $20 is your idea of luxury living.
The $50,000 car is the only one I'd say is at the higher end nationwide, but not by a lot, especially if you need room for a large family.

Why are you so enamored with taxes?

Re:End of Petroleum Taxes

[eth1]

What matters for road wear is weight.

When you register your vehicle, just tax based on miles driven the previous year times the third or fourth power of vehicle mass (can't find the actual reference right now, but I'm pretty sure road damage is proportional to the third or fourth power of vehicle mass). Motorcycles would be almost free, and the commercial trucks that causes most of the damage would actually pay for it.

Re:End of Petroleum Taxes

[reg]

While it is true that trucks do significantly more structural damage than cars and bikes, this point is generally both misunderstood and overstated. Firstly, the damage is done by the load on the vehicle. This is generally accounted for in what are known as Equivalent Single Axle Loads, where a single axle is defined as a full dual wheel axle (four tires) loaded to the traditional legal maximum axle load of 80kN/18kips. The 1,500 times more damage comes from using an exponent of 4 on the load, which is generally OK for most roads, although is closer to 3 for asphalt and 6 for concrete. This is where the misunderstanding comes from - most trucks are not fully loaded. In California, the expected ESALs for a truck on an urban freeway or a local road is ~0.45, which is the majority of the network and the traffic, while it is ~1 for only routes with very high percentages of 18-wheelers (mostly long distance haul). So the "average" 18-wheeler with 3/5 axles (depending on how you count them) is actually doing the structural damage of 1 single axle fully loaded. By contrast, an average car is about 0.0002 ESALs, or about 1/5000 of the damage of a fully loaded 18-wheeler, but only ~2500 times the damage of an actual average truck (in California).

However, this is where the overstatement comes in - this only applies to structural damage. While structural damage does drive maintenance, it is not the only kind of damage, and also roads are not just built for freight. Roads are built for mobility and access, and the major cost is in their initial construction. The benefit to society of the road is in the ability to move more quickly and get to more places, and this has nothing to do with loading or structural damage. In addition, a large amount of the damage on roads is environmental not load related. The continual movement caused by heating and cooling leads to cracking. Asphalts age over time because of heat and UV (like plastics) and become brittle and crack. This cracking is accelerated by stresses related to tire inflation pressure, not load, where cars do almost as much damage as trucks. This is why you see a crazed pattern of cracks across the full width of many old city streets. On concrete damage is also caused by rocking of the slabs, which is worse for trucks, but cars also play a significant role (because a car fits on a slab, while a truck does not). Other damage is caused by shrinking and swelling of the underlying aggregate layers, or shrinking of bound layers. This exhibits as cracks with a large block like cracking. The drought in California caused a large amount of cracking as the underlying soil dried and contracted, completely unrelated to trucks. Old cracks in the underlying layers also reflect through new layers, and that is driven both by load and environmental conditions. There is also rutting which is related to shear under the tires in asphalt, and to the total vertical load in the underlying soils. In addition, there are many cases where one kind of damage can accelerate another kind of damage. Pavements are actually the most complex civil engineering structures to design.

The net result is that saying the some or other group is paying more or less than their share is never very accurate. Users should be paying both their share of for the general mobility and accessibility benefits to themselves, their share for the age/environmental related maintenance/upkeep, their share for the general benefit on society (that UPS can deliver their stuff, that an ambulance can get to their house, etc), and their share for structural damage. There is no formula for weighting these shares, because many of these benefits are intangible. It is also not fair to push the costs of new roads onto only those people in new developments because you create a very distorted tax, where the current residents are not paying the very high costs for something that will still benefit them indirectly.

What this boils down to is that generally truckers are not forced to pay most of the costs of roads because that would not be fair, but the balance of who pays is generally hammered out by a political process, so it is by definition "fair". If you don't think it is fair, you need more political power.

Re:End of Petroleum Taxes

[bluefoxlucid]

income tax (which primarily impacts lower and middle classes)

So, a 20% tax on someone who makes $10,000 is $2,000. It's a big part of income (which is why there's a $6k/$12k 6.2% bracket and a following $10k-wide 16.2% bracket), but it's small in dollar amount. Because it's so small, making the system progressive by lowering taxes on the lower income classes doesn't much impact revenue at all; however, lowering income taxes on the middle-income classes impacts revenue massively, and is tricky.

As you move toward the upper income classes, the impact of an income tax increases in terms of raw dollars. The impact on their standard-of-living is smaller, so a progressive tax increases that because it's safe. Part of that is because upper income earners tend to store more in savings--and so you can take some of that without impacting them, unless you take so much as to deprive them of a stabilizing emergency fund.

This is important.

The difference is, they can't hide as easily from a consumption based tax as they can from a income tax.

By keeping your money in savings (and investments), you effectively evade any and all sales tax. This means your effective tax rate falls immensely.

A sales based tax (especially if placed on non-essentials only) means that we don't have this ridiculous system we have now where the poor and middle class pay a higher percent of their wages than the rich do

In 2014, the top 1% earners paid an effective income tax rate of 27.16%, carrying 39.48% of total income taxes paid. The top 5% paid a rate of 23.61% and carried 59.97%. The top 10% (income above $133,445) paid 21.25% and carried 70.88%. The top 25% ($77,714) averaged 17.83% and carried 86.78% of the total taxes paid.

Altogether, the top 50% (above $38,173) averaged an effective tax rate of 15.52%, carrying 97.25% of the tax load. The bottom 50%, meanwhile, averaged a rate of 3.45%, and paid 2.75% of all income taxes.

People between $133,445 and $188,996 income paid 13.73%, while people with income above $188,996 averaged a 23.61% rate. As you span down the middle class, the effective tax rate falls dramatically. Between the top 10% and 25, the average tax rate was 10.37%. Between the top 25% and the top 50%, the average rate was in fact 7.48%.

You seem to be operating on a false premise.

It gets better.

For all income levels below roughly $118,500 up to 2016, we can add an extra 6.2% by considering the OASDI FICA tax directly on incomes. This ignores the additional backshifting of the 6.2% payroll tax into lower wages. That means our 10.37% number becomes 16.57%.

With that logic, implementing a Universal Dividend at just 12.5% would bring the net effective tax rate at $6,300 in 2016 to -94.04%: the Government is paying this person $5,924. That is for a single earner, not a joint filer--who is getting roughly $11,000 instead.

The earner at $97,000 sees an effective tax rate drop of about 1.33%, while the earner at $196,000 sees an increase of 0.11%. We can easily adjust that increase out: the earner at $420,000 sees an effective tax rate decrease of 0.37%, and the top tax bracket falls to 36.2% from 39.6%. Obviously, that 3.4% marginal cut is going to decrease the effective rate cut on the wealthiest, and adjusting it back out will thus leave them with taxes no lower than whence they began, while allowing us to adjust the upper-middle-class back to a net-positive outcome.

We can move the OASDI payroll tax to the top to keep retirement and disability benefits funded--and solvent. Altogether, this produces a 42.2% top tax bracket, plus any adjustments to patch up that slight dip in the upper middle class and generally smooth out our effective tax rate progression. Alternatively, we can just wait, as that dip all but vanishes by 2017, and is net-positive well before 2020.

In case you're curious, we can fully fund univers

Re:End of Petroleum Taxes

[angel'o'sphere]

On the first glance, that obviously looks like a good idea.

The drawback would be that e.g. in my case my tires hold like 4 - 5 years, because I don't drive much.
A new set of tires is like 600EUR ...

If I have to pay an extra 1000EUR or 2000EUR tax on that, people would consider to postpone buying new tires.

That is not what we want ...

Actually the insurance costs are tied to the amount of km you drive per year, or you could have a mandatory 2 year check (we have it anyway for car safety/damage) and settle taxes on the reported km (and other things like pollution)

Re:But I Don't WANT One.

[Rei]

Not as flexible as gas or diesel.

I have no clue what you mean from that. You can charge an EV from any source of power, delivered from any socket, anywhere. The comfort of your own home. A campsite. A farmhouse in the middle of nowhere. You name it.

Shorter Range.

Model 3 LR goes further in city driving than its performance and size equivalent from BMW, the 340i. Furthermore, unlike gasoline vehicles, EVs start every day "filled up". A gasoline vehicle at any point in time will average only slightly more than half a "charge", and some days you'll start out with very little "charge" remaining at all.

Tied to a credit card

Huh? One, every charging network has its own payment method, and two, how do you pay for gasoline? Are you still one of those cash people who walks into the station every time?

And they sound like vacuum cleaners.

Now I have to doubt that you've ever even been in an electric vehicle.

Why the snark?

[cascadingstylesheet]

Pity the utility company.

Why the snark?

Humans work for utility companies, and humans own stock in them.

Why shouldn't those humans be concerned about making enough money?

Re:Why the snark?

[amiga3D]

My local Energy co-op buys power from the grid. The last few years though they've been installing solar panels by the thousands. Hundreds of acres of land that once grew cotton now have solar panels on them. In South Georgia it gets hot and humid for most of the year and peak power demands used to strain the system. Now when it's at it's hottest the solar panels deliver the maximum electricity so they don't have to buy more power to cover the peak season. My price per Kwh hasn't gone up in a decade.

Re:But I Don't WANT One.

[Rei]

That's why I've always used gasoline-powered phones (the vibration on them isn't that loud, manufacturers have gotten good at muffling it). I just drive down to the store at regular intervals and wait outside while they fill it up, it doesn't take long. You'd think it'd be annoying having to go out of your way to fill it up your phone, but you get used to it. People say, "Oh, but you can't charge in the comfort of your home, like you can with a battery-powered phone", but I can't see why that's so appealing.