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Pennsylvania House considers road use fee for EV owners

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Pennsylvania House considers road use fee for EV owners

Dec 11, 2023 | 5:10 pm ET
By Peter Hall
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Pennsylvania House considers road use fee for EV owners
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An EV charges at the 10-port charging station at JFK airport in New York, part of a joint initiative by the New York Power Authority and the Port Authority of New York and New Jersey. (Photo by Spencer Platt/Getty Images)

Electric vehicle owners would join motorists who own gas-powered vehicles in paying to maintain Pennsylvania’s roads and bridges through a yearly flat fee under legislation being considered in the state House this week.

The details of the fee are still being negotiated amid concerns about fairness and the sticker shock that could come with an additional cost for owning an electric vehicle.

“This is not the right bill currently,” Transportation Committee Chairperson Ed Neilson (D-Philadelphia) said, adding that the size of the proposed $290 annual fee is only one of his objections.

“If this bill passes and becomes law we will be the highest in the country. We want to make sure that this legislation is done fairly,” Neilson said. 

The Transportation Committee passed the bill nonetheless with a 22-3 vote on Monday, sending it to the full House where Neilson said he hopes to pass an amendment with a smaller fee and other changes such as phasing in the fee over a number of years.

The state Senate passed the legislation in June with a 41-9 vote.

Pennsylvania motorists currently pay about 61 cents per gallon of gasoline and about 79 cents per gallon of diesel fuel for cars and light trucks. That money is used to pay for highway maintenance. 

Electric vehicle owners are supposed to pay an alternative fuel tax based on the tax on an equivalent amount of gasoline. The reality is that few electric vehicle owners pay the tax or even know that they’re supposed to pay, the bill’s prime sponsor, state Sen. Greg Rothman (R-Cumberland), said in a memo seeking cosponsors.

There were 47,440 electric vehicles registered in Pennsylvania in 2022, according to the U.S. Department of Energy. The commonwealth has the 13th largest number of electric vehicles, compared with more than 900,000 in California, the No. 1 state for EVs.

Other states have taken differing approaches to collecting money for road maintenance from electric vehicle users. Twenty-nine states have an additional registration cost for electric vehicles ranging from $50 in Ohio to $200 in several states, according to the nonprofit tax policy group Tax Foundation.

The proposed electric vehicle fee would replace the alternative fuels tax on electricity, but only for electricity used to charge a vehicle at the owner’s legal residence. The bill would also forgive any unpaid alternative fuel tax owed prior to the new fee taking effect. 

Neilson proposed several amendments to the bill that would reduce the annual fee to $200 or $225 and phase it in over three to five years. Neilson’s amendments also contain a provision for plug-in hybrid vehicles, which use a combination of electricity from the grid and a gasoline engine.

He said he did not hold a vote on the amendments in order to allow negotiations between House Democratic and Senate GOP leaders to continue.

A number of environmental and consumer groups and electric vehicle manufacturers such as Tesla and Rivian have opposed the fee legislation, calling it punitive for electric car owners.

A $225 electric vehicle fee would be among the highest in the nation, according to the National Conference of State Legislatures. An analysis by Consumer Reports found the highest justifiable fee for Pennsylvania would be $190.

Phasing in the fee over a number of years could avoid a negative impact on electric vehicle adoption but it would not address the issue of equity. A flat fee, Altenburg said, would effectively be a larger tax for those who drive less.

A solution, Rob Altenburg, senior director for energy and climate at PennFuture, said, could be to use a combination of a fee when registering an electric vehicle and a tax on electricity at public charging stations. That way the tax on driving an electric vehicle would be related to the number of miles driven and Pennsylvania would capture revenue from out of state drivers as it does with the gas tax.

Neilson said he hopes to introduce an amendment to the bill on Tuesday and it could be up for final passage on Wednesday.

(This article was updated at 8:54 a.m. on Tuesday, Dec. 12, 2023, to correct an error regarding the highest EV fee in the nation.)