Vermont considers tax on electric vehicle charging

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MONTPELIER, Vt. (WCAX) Vermont is preparing for more electric vehicles on the road. It's a top priority in meeting the state's renewable energy goals. The state hopes to use 90 percent renewables by 2050.

Transportation accounts for about half of energy consumption. So the state estimates we'll need 50,000 electric vehicles on the road by 2025.

But electric vehicle drivers don't pay the gas tax that pays for road maintenance. So as we shift to electric cars, how do we keep the roads from crumbling?

Our Dom Amato spoke with VTrans about a proposal they think could help supplement the budget.

State leaders have pitched charging owners who use electric vehicle charging stations. Since they aren't using gas, they aren't contributing to the fund that keeps our roads safe. The state wants to change that but some environmental advocates say it may be a step in the wrong direction.

"I think the future is bright for electric vehicles," said Kanika Gandhi, a clean energy advocate from the Vermont Public Interest Research Group. "I think people are interested, they're curious."

Gandhi says electric vehicle use has grown in Vermont but it's not nearly where they would like usage to be.

"We're seeing some sales happening here and there but we really need to gear up," Gandhi said.

The Vermont Department of Motor Vehicles says last fiscal year, 635 new electric cars were registered. There are about 2,700 electric and hybrid vehicles total in the state.

"There's a lot to gain from electric vehicles and electrification of the transportation sector in general," Gandhi said.

Gandhi says electric vehicles help cut back on carbon emissions and improve air quality. The state offers a number of incentives to purchase EVs, but now the transportation agency is proposing an added tax to drivers.

"We really feel like we should be pushing to make them more affordable for Vermonters of all walks of life, not making them more expensive," Gandhi said.

"We currently have a transportation funding system whereby we collect a gas tax and that's how we pay for our roads and bridges," said Michelle Boomhower of the Vermont Agency of Transportation.

Boomhower says the state wants more EVs on the road but says those drivers need to pay equally into the transportation fund.

"I think that folks that own these vehicles understand that there's a tradeoff and they know we need to preserve the transportation system in a way that will be viable for the future," Boomhower said.

The state Public Utility Commission is looking into the best way to collect that tax from EV owners.

"The one that is the most promising from our perspective is a per kilowatt-hour charge on electricity consumed by electric vehicles," Boomhower said.

To match the current gas tax, the cost would be about 4 cents per kilowatt-hour.

Boomhower says utilities that own charging stations have spoken with legislators about creating this system. They say while it would be challenging, it's possible.

"People recognize there needs to be a long-term solution," Boomhower said.

The state feels the per kilowatt hour charge is the best option so far and say they aren't aware of any other state looking at this type of fee.

WCAX News asked if there were any other options. Boomhower said raising the gas tax is off the table. Higher upfront registration costs for EVs could be challenging, and a vehicle-miles-traveled fee would be unfair to some rural Vermonters and it would be difficult to track drivers from out of state.