South Dakota is building a network of charging stations for electric cars, thanks to a scandal that soiled the reputation of a global carmaker.
Five years ago, Volkswagen was caught rigging vehicle systems to pass emissions tests. The company paid billions to settle lawsuits. All the states got settlements, and South Dakota got about $8 million.
Now the state is spending the money, and most is earmarked to help replace old trucks and buses with newer, less-polluting models. State and local government agencies and schools are among the groups eligible for the help.
There have been multiple rounds of applications and awards, but much of the money remains unspent. So state officials might use some of it to help install more electric-vehicle charging stations.
Robert Raker is the manager of public relations for West River Electric in Rapid City. He said automakers are producing more electric cars, and car dealers are asking for charging stations.
“Because they realize that it's going to be very troublesome to sell these vehicles when people are confined to the driving radius of just around their homes,” Raker said.
He and several other people spoke about the issue Thursday during a meeting of the state Board of Minerals and Environment. The board has oversight of the state’s Volkswagen settlement funds.
The Alliance for Automotive Innovation says there’ve been fewer than 300 sales of 100-percent-electic vehicles in South Dakota since 2011. The best charging stations for the vehicles are called “DC fast-charging.” They can do a 200-mile charge in one hour.
But electric co-ops and utilities are hesitant to build the infrastructure. Ben Pierson works at Sioux Valley Energy in Colman. He said fast-charge stations cost up to $100,00 to install. They also take money to maintain, and customers only pay about $9 for a 30-minute charge.
To break even at those rates, Pierson said each station needs 275 customers every month for five years.
“At this point in South Dakota, we are a long ways off from that,” Pierson said. “And so I guess that just kind of paints the picture that DC fast-charging on its own right now is not economic.”
Tesla has some charging stations in South Dakota, but only for Tesla models. Pierson said many states outside the Northern Plains have stations that any electric vehicle owner can use.
“If you take away the Tesla fast-chargers, you can see that in South Dakota and North Dakota, Montana, Wyoming, there's just next to no DC fast-charging infrastructure at this time,” Pierson said. “So that's really the picture of the need that we're trying to meet, at least in South Dakota.”
South Dakota has already earmarked 5 percent – or about $400,000 – from the Volkswagen settlement for charging stations. That money was awarded this month. It’ll help install stations in Wall, Murdo, Chamberlain, Mitchell, Sioux Falls, Brookings and Watertown.
To use more of the Volkswagen money and get more stations, state officials might bump that 5 percent allotment to 15. That would free up another $800,000.
One plan calls for stations in Spearfish, Rapid City, Hot Springs, Pierre, Aberdeen, Huron and Vermillion. Ideal locations are next to major highways, shopping centers and restaurants. That gives drivers something to do while their car charges up.
The locations will not be at gas stations, at least not yet. Pierson said gas-station owners don’t see enough financial incentive.
“I can see in the longer term once utilization rates go up, gas stations may just put in charging stations by themselves,” Pierson said. “But for South Dakota, that's a long way out, and that’s why we need grants like this just to get the charging infrastructure out there.”
Pierson and Raker hope to use any leftover money after the next round of grants to work with the state Department of Transportation on pinpointing places for even more charging stations.
Minerals and Environment Board Chairman Rex Hagg expressed support for additional charging-station grants.
“Certainly my personal concern, and probably board members, is that we use this money as cost-effectively as we can to at least get ourselves and get our tourists across the state,” Hagg said. “And obviously the auto dealers, I'm sure they're happy about that, too.”
To free up more money for the next round of charging stations, the Department of Environment and Natural Resources will draft changes to the state’s Volkswagen settlement plan. It could take several months to write the draft, get the required public input and approve the changes.
-Contact reporter Seth Tupper by email.