TO:
Honorable Mayor and Members of the City Council
THROUGH:
Bruce Moe, City Manager
FROM:
Erick Lee, Public Works Director
Sean Roberts, Field Operations Manager
Nicholle Petroff, Senior Management Analyst
SUBJECT:Title
Conduct Public Hearing Regarding Proposed Fees to Recover Costs Related to Electric Vehicle Charging at City Facilities (Public Works Director Lee).
(Estimated Time: 15 Mins.)
A) CONDUCT PUBLIC HEARING
B) ADOPT RESOLUTION NO. 24-0037
Body
_________________________________________________________
RECOMMENDATION:
Staff recommends that the City Council conduct a public hearing regarding proposed fees related to Electric Vehicle (“EV”) charging at City facilities and adopt Resolution No. 24-0037.
Body
FISCAL IMPLICATIONS:
If the City Council approved the proposed rate of $0.51 per kWh, the City would recover approximately $182,000 annually beginning July 1, 2024. Additional costs would be incurred in Year 1 in order to start collecting fees and procure equipment. The City’s current EV Charging infrastructure already has the equipment necessary to begin collecting fees on 18 of the 32 EV charging stations. The cost of retrofitting the remaining 14 charging stations is estimated to be approximately $30,000. Sufficient funds for retrofitting these remaining stations are available in the Public Works Department’s budget for the current fiscal year within the General Fund.
BACKGROUND:
There are three different levels for EV chargers: Levels 1, 2, and 3.
• Level 1 is the cheapest and slowest technology and only adds about four miles of range per hour of charging.
• Level 2 charging is the most common form of public charging equipment and costs approximately $1,000 per unit. It can charge at a low voltage and adds an average of 12-50 miles of range per hour.
• Level 3 is the fastest charging technology and also the most expensive at about $50,000 per unit. A Level 3 charger can charge an EV to 80 percent in about an hour.
The City currently operates 28 EV Level 2 charging stations at 10 locations that provide free charging to the public. These units were purchased and installed between 2013-2022. These units were funded by Mobile Source Air Pollution Reduction Review Committee (MSRC) clean transportation grant funds and AB 2766 funds.
Additionally, two chargers are installed in the secured garage underneath the Public Safety building for Police and Fire Department employees to charge their personal vehicles, and two chargers are installed in the Civic Center Parking Garage in the area designated for elected officials.
The City currently bears 100% of the cost of the electricity distributed by all of these chargers, along with all costs associated with the maintenance and repair of the equipment. The locations of the EV Chargers are:
• Manhattan Beach Art Center at 1560 Manhattan Beach Blvd. 2 stations
• Parking Lot #2 at 222 12th Street 2 stations
• Metlox Parking Lot at 451 Manhattan Beach Blvd 4 stations
• Joslyn Center at 1601 N. Valley Drive 2 stations
• Live Oak Park at 1901 N. Valley Drive 2 stations
• Upper North Pier Parking Lot at 1125 Ocean Drive 2 stations
• Upper South Pier Parking Lot at 1121 Ocean Drive 2 stations
• Parking Lot #3 at 1155 Morningside Drive 2 stations
• Parking Lot #4 at 3738 Highland Ave 2 stations
• Civic Center Parking Garage (not including City fleet chargers) 10 stations
• Public Safety Secured Garage (not including City fleet chargers) 2 stations
The stations vary in connectivity to the electricity meters, with some chargers on separate SCE meters or accounts and others connected to meters at the host facilities. Based on the available information, staff estimates that the City currently distributes approximately 353,600 kilowatt-hours (kWh) of electricity via its EV chargers annually. At the average rate of $0.28 per kWh, this equates to approximately $99,000 in direct electricity costs for EV charging that are currently not recovered by the City each year.
The City’s EV charging program is not supported directly by fees from those who utilize this service. As such, the ongoing operations and maintenance costs of this program, along with the eventual replacement of the EV charging equipment, are supported by general tax revenues. On the February 21, 2023, City Council directed staff to move forward with developing fees to recover costs related to EV charging.
DISCUSSION:
The City contracted with Matrix Consulting Group (Matrix) to perform a fee analysis considering the items listed below. Matrix developed these costs based on information provided by the City regarding the initial acquisition of the chargers in 2019, annual maintenance costs and current electricity charges, and total electricity usage since 2019.
Annual Maintenance Cost
• Reflects the fully burdened cost of the City staff to maintain current EV charging stations annually. Based on the number of EV stations and estimated hours, staff spends approximately 37 hours annually maintaining the stations throughout the City.
Annual Electricity Cost
• Reflects the total annual electricity charges assessed to the City based on the use of the charging stations.
Annual Revenue Collection
• Reflects the total annual charges to the City to collect fees, maintain the fee collection equipment, and handle any issues related to the end-user experience with fee payments.
Annual Replacement Cost
• Reflects the cost to fund the replacement of EV stations, which is annualized over a five-year timeframe.
Annual Program Enhancement & Expansion
• Reflects the cost to improve and expand the EV charging station program by adding modules to collect fees and/or upgrade the charging stations. These capital costs have been annualized over a period of five years.
Indirect Cost
• Reflects the indirect costs of Citywide and Department support in managing the EV program. These costs were based on 20% indirect rate and were applied to all annual costs components, excluding maintenance. Maintenance cost are based on the fully burdened hourly rate of staff, which already includes Citywide and Department Indirect support.
Summary of Costs
|
Cost Category |
Total Cost |
|
Annual Maintenance Cost |
$8,729 |
|
Annual Electricity Cost |
$99,008 |
|
Annual Revenue Collection |
$7,300 |
|
Annual Replacement Cost |
$18,065 |
|
Annual Program Enhancement and Expansion |
$20,000 |
|
Indirect Costs |
$28,875 |
|
Total Direct and Indirect Costs |
$181,976 |
$181,976 total cost = $0.51 per kWh
353,600 kWh annually
Based on the calculation conducted, the full cost associated with the City’s operation and maintenance of a Level 2 charging station is $0.51 per kWh.
Staff surveyed the surrounding area to determine what rates municipalities were charging for EV charging. The results are listed below. The fees vary as each of the City’s rates are developed through their own studies and processes.
|
CITY |
EV Charging Fee (per kWh) |
Additional Information |
|
Santa Monica |
$0.35 |
|
|
Beverly Hills |
$0.25 |
Also assesses a station fee of |
|
|
|
$6.00/hour after 2 hours |
|
El Segundo |
$0.50 |
Only 1 station in operation |
|
Redondo Beach |
$0.30 - Level 2 Charging |
Overstay fee of $1.50/hour |
|
|
$0.40 - Level 3 Charging |
after 4 hours |
If the proposed fee is established by the City Council, staff will procure and install the necessary equipment to ensure the fee can be collected by the time it becomes effective. Public Works will also work to retrofit the remaining ten charging stations with the necessary monitoring equipment. Furthermore, the City will need to enter into a full-service agreement with Liberty Plugins to collect fees, maintain the fee collection equipment, and handle any issues related to the end-user experience with fee payments.
Staff recommends that the City Council adopt Resolution No. 24-0037, establishing a fee of $0.51 per kWh effective July 1, 2024. Besides recovering the direct electricity costs, these fees could be used to maintain the equipment, replace equipment when it reaches the end of its useful life, and assist with funding the expansion of the City’s EV charging program into additional facilities along with improvements to current locations.
PUBLIC OUTREACH:
Public hearing notifications were/will be published in The Beach Reporter on March 28, 2024, & April 4, 2024, inviting public oral and written comments on this item. Informational cards about the City Council’s consideration of this proposed fee were placed at City Hall, Joslyn Center, Manhattan Beach Arts Center, Tennis office, and the Police & Fire Facility. Messaging regarding the public hearing and proposed fee was placed directly on the EV chargers. Furthermore, information about the public hearing was included in the April 2024 Older Adults newsletter and on the City’s social media platforms, including Facebook, Instagram, and Twitter. This information was also provided to the City’s labor associations and unions.
ENVIRONMENTAL REVIEW:
The City has reviewed the proposed activity for compliance with the California Environmental Quality Act (CEQA) and has determined that the activity is not a “Project” as defined in Section 15378 of the State CEQA Guidelines; therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines the activity is not subject to CEQA and no further environmental review is necessary.
Additionally, the majority of the City’s public EV chargers are within the Coastal Zone. As such, staff from the Community Development Department has reviewed the establishment of proposed fees and installation of associated equipment for conformance with the City’s Local Coastal Program (LCP). After said review, it has been determined that the proposal is exempt from the provisions of the LCP pursuant to Section A.96.050.B.
LEGAL REVIEW:
The City Attorney has reviewed this report and determined that no additional legal analysis is necessary.
ATTACHMENTS:
1. Resolution No. 24-0037
2. Matrix Electric Vehicle (EV) Charging Fee Analysis
3. Location Map
4. PowerPoint Presentation