A group of local charging network operators have attributed the high cost of electric vehicle (EV) charging infrastructure to private operators, while seeking a regulatory exemption to install kerbside EV chargers - an option regarded as necessary to address one of the primary barriers to broader EV adoption in Australia.

This position is outlined in an application submitted to the Australian Energy Regulator (AER), requesting an exemption from existing ring-fencing rules, which currently prohibit network operators from owning EV charging infrastructure.

CitiPower, Powercor, and United Energy - together referred to as CPU - have proposed a five-year trial, with a budget of AUD 1.2 million (US$ 765,000), to install 80 chargers across Melbourne, where EV uptake is comparatively higher, and an additional 20 units in other areas.

CPU has stated that it will transfer operational responsibility for the chargers to a third party via a competitive tender process but intends to carry out the installation and ongoing maintenance of the equipment.

According to CPU, the trial is intended to collect data on how EV charging affects local electricity demand, to determine where users are more likely to charge their vehicles - such as residential streets compared to commercial locations - and to assess the impact of charging activity on power quality.

The AER has projected that approximately 1,000 publicly accessible EV charging locations supported by government funding will become operational between June 2024 and December 2025, with contributions from federal, state, and Australian Renewable Energy Agency (ARENA) initiatives.

ARENA data also shows that around one in four Australian drivers does not have access to off-street parking, highlighting the potential need to accelerate kerbside charging deployment.

CPU argues that the current ring-fencing rules create a barrier to the development of EV infrastructure.

These rules prevent distribution network service providers (DNSPs) from engaging in activities beyond their primary role of electricity distribution and transmission. The policy is designed to ensure DNSPs do not use their regulated monopoly status to gain advantages in unregulated sectors.

In its submission, CPU claims that these restrictions have limited EV infrastructure growth in Victoria.

"Third-party operators aiming to establish EV charging networks face significant barriers, particularly due to regulatory delays and the complexity of obtaining necessary approvals," the application states.

"Networks, however, have infrastructure and technical capabilities that may assist in addressing these barriers.

"By using existing network assets - including power lines, poles, and substations - capital costs associated with deploying EV chargers can be reduced. This may improve the efficiency of deployment and lower overall costs for consumers."

CPU also states that it could facilitate the regulatory process by using its existing knowledge of the approval procedures.

However, independent EV charging providers have raised concerns regarding the potential competitive implications.

In January, Chris Mills, Chief Executive of Evie Networks, warned that exempting DNSPs from current rules could result in competitive disadvantages for private operators.

He pointed out that DNSPs could access infrastructure and grid connections without incurring the same costs that apply to others.

Mills noted that third-party charging companies must typically pay application fees for energy connections, cover the cost of grid upgrades where necessary, and face higher energy access charges.

A similar situation arose in New South Wales, where Plus ES is conducting a trial involving 1,000 EV chargers. That company leases space on poles from its parent, Ausgrid, and is required to operate independently.

Evie Networks, EVX (another kerbside charging provider), and the National Electrical and Communications Association (NECA) submitted objections to that trial, raising concerns about competition and transparency in the arrangements between affiliated companies. Despite these objections, the AER allowed the trial to proceed, stating confidence in the existing ring-fencing rules.

In the current case, the AER has acknowledged that allowing regulated monopolies to participate in unregulated commercial markets presents potential risks.

"For example, DNSPs control third-party access to power poles, and third parties must pay access fees to connect to DNSP networks or to lease network assets - costs which DNSPs themselves would not incur," the AER noted in its consultation paper.

CPU maintains that excluding DNSPs from the EV charging market is not in the long-term interests of electricity customers.

"We understand that some market participants prefer that networks do not engage in the provision of EV charging infrastructure," CPU stated in a January update to the AER.

"It is not in the interest of those participants for network-led cost efficiencies to be realised."

CPU also argues that some non-DNSP charging providers may be seeking to preserve market positions for providers with higher costs and less extensive infrastructure.

The AER states that this is the first ring-fencing waiver request submitted directly by a network operator for EV charging infrastructure.

It also notes that in other jurisdictions - such as the European Union, the United States, and the United Kingdom - DNSPs are prohibited from participating in the EV charging sector due to their existing market influence.

Nonetheless, the AER has indicated interest in understanding why private companies have not yet entered the kerbside charging segment in the areas CPU has proposed for its trial.

Should the waiver be approved, CPU may be required to publish a rationale for the selection of each site and could also be required to reduce or waive access fees for private EV charging companies operating within the trial zones.