Is it legal to charge for electricity?

Charging per unit of power (e.g. kWh) is usually reserved for utilities but time-based rates (e.g. rate per hour) 'may' be allowed ...

Mohammad Akhlaghi avatar
Written by Mohammad Akhlaghi
Updated over a week ago

Short Answer

Even though reselling electricity is often illegal, some jurisdictions (Canada as an example) may allow a flat rate, a time-based rate or a blended rate (parking + charging together). Be sure to check your local jurisdictions for laws & regulations regarding EV charging rates.

More Details

For the sake of consumer protection, there is an ongoing debate between utilities and EV charger manufacturers over who can charge for electricity and how. Not having a proper way to charge for the usage of electricity for EV charging hinders the growth of electric vehicles, on the other hand allowing anyone using an unapproved power measurement device to charge for electricity is a recipe for disaster.

For years the middle ground was to reserve the right to charge for unit of power (i.e. kWh, Joules or etc) to utilities (or approved vendors) AND allow EV supply equipment to act as a service provider (not an electricity provider) and let them charge per time of usage (like parking).

Two problems arise with charging per time of usage instead of unit of power:

Problem #1: variable charging rates

The amount of power delivered to an electric vehicle from Level 2 and Level 3 charging stations is not fixed and depends on many factors, including but not limited to:

  • How full the battery is. As the battery gets more full, especially after 80% capacity, the rate of charge drops significantly. According to Forbes "The last 20% of a fill-up can take as many minutes as the middle 50%, and thus cost as much, for much less electricity."

  • The weather conditions. Temperature of the battery is an important factor affecting the charging rate.

These factors make it unfair for electric vehicles to have to pay for time-based rates as the rates are always calculated based on the maximum power the EV charger can supply to the EV rather than the actual power the electric vehicle is receiving. This type of unfairness only applies to Level 2 & Level 3 chargers.

When it comes to Level 1 charging though, our Plugzio data shows the rate of charge is always constant and doesn't depend on any external factors which makes it fair for consumers to pay time-based rates.

Here is a snapshot for a 25 hour charging session run by one of Plugzio users before their battery reached full capacity. As you can see, the amount of power delivered to the vehicle is always constant.

This makes charging per hour of usage extremely fair to the consumer. Here is another example of a Plugzio user which got their battery fully charged over night and paid 50 cents an hour for usage. As you can see, the relationship between kWh of usage and time is a straight line.

Problem #2: Getting charged even when the EV is at full capacity

Level 2 or Level 3 EV chargers often don't stop taking money from clients on an hourly basis even after the EV's battery is fully charged. Some of them even increase the rates when the battery becomes full to encourage turn-over.

Plugzio has a feature called Smart Stop that shuts down power to the EV as soon as the EV becomes fully charged. This avoids the consumer from overpaying if being charged on a time basis rather than per kWh. This feature can be disabled by the user if constant flow of power is necessary to the consumer (e.g. in extreme cold weather conditions).

In addition, majority of Plugzio installations are near long-duration parking spaces where there are no set time-limits for parking making it very convenient for EV owners to simply plug their vehicle in and leave while resting assure that the rate of usage will always be fair.

Time-based charging is going away in California soon.

California will ban per-minute billing for electric vehicle charging stations starting Jan 1st 2021, there are complications to this policy so here are some more sources from Electrek (#2) and Forbes to tell you more about it.

Other states usually follow California's lead, so it's a matter of time before time-based charging for Level 2 & Level 3 EV supply equipment get banned all over north America.

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