The August SEVA meeting returned to June’s hybrid format, primarily to meet the request from the guest presenter to appear by Zoom from Olympia. More than 10 others joined the Zoom channel, which was displayed using SEVA’s brand-new laptop to those in attendance at First Church of the Nazarene, Wallingford.
Former Scribe Kevin Boze issued the call to order at 7:07 p.m..
IN THE NEWS – President Jay Donnaway reported on several EV developments, including President Biden’s executive order to expand the national EV charging network, and the just-passed infrastructure bill which will grant several million dollars to Washington for EVSE buildout, as well as the opportunity to compete for a portion of additional billions allocated nationally.
SPECIAL GUEST – RUC PRESENTATION
Executive Director of the Washington State Transportation Commission Reema Griffith gave a special presentation about the Washington State Road Usage Charge (RUC) proposal. The Commission has been assessing RUC proposals since 2012. The RUC is under consideration as a replacement for taxing fuel, which is no longer a reliable, equitable source of funding. Gas tax revenues decline with average vehicle fuel efficiency. An increase from the state average of 20.5 mpg in 2020 to 35 mpg in 2035 would be a 71-percent increase in fuel efficiency, resulting in a 42-percent decline in revenue. Also, the gas tax has fairness and equity challenges. Vehicles with below-average fuel efficiency pay more fuel tax per mile driven; vehicles above average MPG pay less tax per mile; and adoption of EVs and hybrids furthers this trend towards “some users pay, all users benefit.” The commission sees an RUC as returning to a principle of all users pay and benefit. Here are some highlights from the presentation:
The tax rate would need to increase by 1.7 cents per gallon per year to generate constant revenue. By 2040, the tax rate would get close to a dollar a gallon, disproportionately affecting a smaller and smaller segment of the driving public.
The commission sees plug-in vehicles as arriving. The crossover point will be when they become cheaper than ICE vehicles. The commission accepts Bloomberg’s prediction price parity could occur by 2022. Ubiquitous charging stations will also be a critical piece of the transition.
Washington and six other states have RUC assessment pilots. Oregon, Utah and Virginia are enabling drivers to opt-in to pay by the mile.
The mandate of the Washington Legislature in 2012 to the WSTC was to assess RUC suitability as a sustainable, long-term revenue source that could replace the current gas tax. Requirements were that during a transition period from the gas tax to the RUC, drivers would pay one or the other tax, but not both. The per-mile rate for this assessment would be set at the gas tax rate of 49.4 cents per gallon, divided by the state average efficiency of 20 miles per gallon, making a rate of 2.4 cents per mile. And drivers were to be provided a choice for how their vehicle mileage would be collected, reported and paid.
WSTC conducted a year-long statewide test involving 2,000 test-drivers (including at least three SEVA members). Cross-border testing was conducted with pools of drivers from Idaho, Oregon, and the city of Surrey, BC, observing how payment processing and reconciliation could occur cross-border. Oregon involved the nation’s first cash-transaction test, where cash was actually reconciled between state treasuries. The idea there was to show that cross-border reconciliation could be accomplished when there might be a patchwork of states using RUC, but no national policy. Additional partners were SEVA and Plug-In America.
Five reporting methods were used. Two were intentionally low-tech and did not involve GPS, because WSTC wanted to demonstrate that RUC could be accomplished without GPS. One of these was a pre-purchase of a mileage permit; drivers pre-selected a block of miles — 1,000, 5,000 or 10,000 — and would report their odometer either electronically or in person every three months, purchasing additional miles as needed to keep the permit valid. Only 1 percent of the testers chose this. Twenty-eight percent chose the odometer-reading option; the driver post-pays for miles reported quarterly, and reporting is either electronic (by photographing the odometer and uploading the photo) or in person, by appearing at a DOL office for an employee to record the odometer.
A popular option, which WSTC capped at 14 percent of participants in the pilot, was to use Milemapper, an iPhone app which records miles using GPS. It allows GPS to be switched off for out-of-state use. Finally, versions with and without GPS used a mileage reader that plugs into the OBD2 port. The GPS version automatically deducts out-of-state mileage. Nevertheless, 34 percent of those choosing the OBD2 dongle opted for the non-GPS version.
More than 15 million miles were reported and mock-charged at 2.4 cents per mile. There pilot included three surveys, six focus groups, and more than 1,900 e-mails and phone calls. The top concerns were privacy and data collection, fairness and equity, compliance and administration costs, correct and low-hassle taxation when travelling between states, and operational viability.
Test drivers’ support for RUC increased by the end of the pilot. Sixty-eight percent preferred RUC (or preferred it equally) to the gas tax. Twenty-eight percent wanted immediate implementation of RUC; 33 percent wanted RUC to be phased in; and 9 percent wanted RUC only for EVs.
RUC does not require GPS. Privacy protection measures are available. The only new piece of information needed for RUC is total miles driven. Four of the mileage-reporting options require no location information. Those that use location data are at the driver’s option and for the driver’s convenience in automatically deducting out-of-state and off-road miles. A law to enable RUC could include privacy provisions that draw on the commission’s model policy, which strictly prohibits any use or disclosure of location except for specified purposes (tax collection in the case of the RUC), penalizing misuse.
Rural and lower-income drivers will on average pay less with RUC because of their lower-MPG vehicles. What you drive, not how far you drive, determines the impact of RUC relative to gas taxes. Reema displayed a map showing that geographically small pockets, most of them urban, would pay more under RUC, while the largest areas would pay less.
How will RUC influence plug-in electric adoption? RUC holds most PEVs harmless, but introductory rates can be used to reward PEV owners and purchasers. Many PEV owners will save compared to the current $225 annual registration surcharges. Efficient vehicles will remain low-cost to operate even with RUC.
RUC will have collection costs similar to vehicle fees. Net revenue will out-perform fuel taxes over time, although an expensive start-up cost can’t be avoided. When only a small number of drivers are participating, overhead will be comparably high at 16 percent. As it scales up over time, this should drop to something similar to the 8 percent overhead for collecting vehicle registration fees. Scaling will drive it down more.
Net revenue from the Washington passenger fleet under RUC will surpass the gas tax. Indexing the fuel tax to inflation generates revenue similar to RUC by 2040, but the proportion of taxpayers shrinks, and the burden of payment shifts more to low-income and rural drivers.
Until a national system is in place, the gas tax will continue to capture revenue from out-of-state drivers. It’s inexpensive to collect. Out-of-state drivers account for 5-8 percent of total VMT in Washington. Taxing public EVSEs could capture revenue from out-of-state EVs. Eighty percent of in-state charging is at-home. Further development of RUC interoperability must continue.
In 2020, WSTC issued a report proposing that the Legislature make a gradual transition, starting small, focusing on plug-ins, hybrids and state agency vehicles. This is about 4 percent of Washington vehicles. WSTC wanted this to start in 2021, but it didn’t happen in this year’s legislative session. An RUC Readiness Assessment would start in 2026; if ready, high-MPG vehicles would then be included in RUC. By 2030, RUC would be extended to all new passenger vehicles, and state highway bonds would cease being issued against gas-tax revenue. That’s a reason to keep the gas tax in place until then.
Substitute Senate Bill 5444 reached Second Reading this year, but it did not ultimately come to a final vote before the end of the 2021 session. It would have implemented many of the Commission’s recommendations. SSB 5444 provided that by July 1, 2025, EVs and plug-in hybrids could opt in to RUC in order to avoid the $225 flat fee. One year later, the flat fee of $225 would be repealed and replaced with RUC at an introductory rate of 2 cents per mile for EVs only. Revenues generated from RUC are to be deposited into the motor vehicle fund to pay for roadway preservation and maintenance. SSB 5444 provided language to protect privacy and driver data, exempting RUC data from public disclosure.
WSTC believes that it’s ready now for the small start-up program. Longer-term, more modelling is needed about the effects of emerging phenomena like ridesharing and increased telecommuting. How sustainable will RUC be with these changing forces? Equity analysis is needed to measure whether the RUC has disparate affects on communities of color, low-income households and vulnerable and displaced populations. The state needs to look at emerging reporting methods such as in-vehicle telematics, improved smartphone apps and retail payment options. They want to work with other states to reduce the cost of collection of RUC revenue. Next year, the state will conduct a small-scale test of new reporting methods, equity policies and cost-reduction techniques. An “RUC Roadmap” will detail how states that are looking at RUCs can “right-size” RUC policy. All of this will be under the “Forward Drive” federal STSFA grant program, which WSTC has been working under since 2020.
Jay asked if the policy dedicating RUC revenues to roads would be as strong as the state constitution’s Eighteenth Amendment dedicating gas tax revenue to roads. Reema said it wasn’t as strong as a constitutional amendment, which is also the hardest to implement, but the proposed statute does have this directive.
Steve Lough asked how vehicle weight will be accounted for by RUC. Reema said that roads are engineered for the heaviest vehicles, so there’s little difference in road wear between light and heavy cars. On the other hand, WSTC has an objective of keeping the RUC structure simple, so they don’t intend for weight to be factor at first. It could be worked into the rate formula later.
Louis Wolf asked whether a road tax could instead be levied on tires, which are mileage-rated. WSTC is not considering that.
RUC would not replace tolls, because this would require GPS, but it might become possible with future technological improvements. As for replacing tolling on 405, it’s already a double tax and that won’t change.
The fate of the $75 of the $225 registration surcharge that is dedicated to charging infrastructure has not been determined. Reema said the Legislature will need to wrestle with that, but the Commission’s recommendation for the flat fee was different than the provisions of SSB 5444.
Randy said his odometer isn’t accurate; it’s off by two miles out of 60. Reema said the ODB2 device is more accurate than an odometer. Every tax has leakage; if they can get it to be 98 or 99percent accurate, they’ll be happy.
Phil Skoog said he has a collector car without a working odometer. Reema said the RUC could have a flat fee for those cases.
Brian Grunkemeyer asked who will own the data. For the pilot, a private vendor verified that the location data showed in- or out-of-state, and the data were then disposed of. Only total mileage was shared. From here, state law will need to specify who owns the data and how it must be treated or destroyed. The state already has provisions for safeguarding tolling data.
Reema will take questions at firstname.lastname@example.org.
Clean Cars 2030 Rally Aug. 14 – The Clean Cars 2030 Rally with Coltura will be on Saturday, Au. 14, starting at St. Mark’s Episcopal Cathedral. It should conclude by 1 p..m., avoiding the heat later in the day. Speakers will share the message about the goal of ending the sale of gasoline cars by 2030. Washington should be a leader; it’s one of the best places to go electric. We’ll gather at 10:30 to prepare for an all-electric parade. Masks are required (even though it will be outside) due to the proliferation of the COVID Delta Variant. Jay said that the Clean Cars bill was killed at the last minute by a poison-pill amendment. Governor Inslee is being asked to implement the goals of the bill by executive order instead.
The Green Transportation Summit and Expo will be in Tacoma Aug. 16-18, with a gathering at the Lemay Museum on Sunday night.
SEVA has been invited back to the Lemay Family Collection at Marymount-Spanaway. We would have a club area set aside. This will be September 21. Jay needs to let Lemay know by September 15.
SEVA has not yet scheduled anything for National Drive Electric Week in September. Dick Muri will organize an event in Steilacoom on Sept. 11.
Six SEVA members and three cars attended the Kirkland Waterfront Car Show last weekend. Phil Skoog brought his Model 3, Kevin Boze had the Model Y, and Larry Ryan brought his S-10 pickup conversion, which got a lot of attention.
Treasurer Charlie Tsai has been working to get the SEVA registrations back in order, and he bought SEVA’s brand-new laptop in use for tonight’s meeting, replacing the old model that was no longer operational.
Steve Lough was interviewed by KING-TV about the charging provisions in the federal infrastructure bill. It was broadcast on Tuesday, Aug. 10.
Electrify America will cease new CHAdeMO connector deployments next year. That’s not surprising, given that they’ve complied only with the letter, but not the spirit, of the settlement which created them.
Paul mentioned that it’s possible to get refunded for Washington gas taxes when the gasoline is used out of state; so such a refund mechanism, which could also be used for RUC, has been around for a while.
The sale of raffle tickets concluded at 8:12 p.m. The raffle pot was $62, with half going to the winner and half to the club.
NEW ATTENDEES: Richard McEnery has a Ford Mach-E. Noble Hendrix has a Leaf and he’s interested in boat conversions. Ed Mills (who has hosted the Zoom meetings but hasn’t come to Wallingford before) has a Leaf and an Arcimoto. Jay has Ed’s old Miles EV.
Jay adjourned the meeting at 8:18 p.m.
Minutes drafted by Secretary Billy Kreuter, and edited by Vice President Grace Reamer.