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John Petro

Should Cities Subsidize Electric Car Owners?

Yesterday, Los Angeles Mayor Antonio Villaraigosa announced a plan to get Southern California ready for electric plug-in vehicles by upgrading and expanding the number of charging stations throughout the city and providing a number of incentives and subsidies to electric car owners.

• Home Charger Early Adapter Incentive Program to subsidize the installation up to $2,000 for the first 5,000 residential customers.

• Off-peak electrical charging rate of 8.5 cents per kWh (6pm to 2am).

• City and State incentives including, but not limited to, preferred and/or free parking, high occupancy lanes.

• Upgrading the 400 existing public charging sites within one year of the adoption of a new federally-approved charging standard.

• Implementing a streamlined process for the installation of home charging units in the City of Los Angeles.

Now that electric vehicles are becoming more common in U.S. cities, to what extent should city governments foot the bill for upgrading infrastructure to accommodate these users? In the beginning of the 20th Century as the personal automobile became more common in the U.S., cities reacted by refitting existing roads to accommodate their use; sidewalks were narrowed and traffic signals were installed. However, city governments did not subsidize the construction of gas stations.

So far, it is unclear who will pay for the installation of public charging stations. The federal stimulus package included a $100 million grant to install charging stations in 11 cities. In November, the Washington Post reported that coalition of companies that includes Nissan, FedEx, PG&E and NRG Energy are requesting that the federal government provide $13.5 billion for tax credits to build public charging stations as well as $124 billion in government incentives to support the industry over eight years.

While the widespread adoption of electric cars will be a positive development for those living in U.S. cities, with fewer locally-produced emissions and clearer skies, U.S. cities should not bend over backwards to create subsidies for electric vehicle users. Los Angeles' plan, with free parking and access to high occupancy toll lanes, would be a bad precedent for large U.S. cities concerned with traffic congestion and the hidden costs of free parking. Parking guru David Shoup has found that when free parking is provided at work, the number of employees driving to work alone increases by 60 percent. For any city trying to alleviate traffic congestion, providing free parking to electric vehicle users is a bad choice.

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Posted at 5:57 PM, Dec 02, 2009 in Urban Affairs
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