Environment, Legislature

Bill would hike annual registration fees on electric cars, assess new surcharge on hybrids

Prius and other hybrid car owners could get dinged for an extra $87-$112 in annual registration fees, if a House bill becomes law. Fees would also increase on EV registrations. (Photo: Toyota.com)

Senate Bill 446 (primary co-sponsors Republican Reps. Jim Davis and Tom McInnis) would increase the annual registration fees for plug-in electric vehicles, and for the first time, assess a registration surcharge on gasoline-battery hybrids.

EV owners currently pay a $130 registration fee, which would increase to $175 next year. By 2022, EV owners would pay an additional $275 at the time of the initial registration and each time they renew.

One of the rationales behind the fee increase is that they could offset the reduction in gas tax revenues. EV drivers still use the road, but buy no gasoline, whose taxes help pay for road maintenance. (But EVs don’t emit greenhouse gases, a societal benefit beyond road repairs.)

The gas tax in North Carolina is 36.2 cents per gallon, according to the Department of Revenue, ranking the state 14th in the nation.  The federal gas tax is 18 cents per gallon.

There are about 10,000 EVs currently registered in North Carolina, which account for $1.3 million in extra registration fees each year. If the state registers an additional 80,000 EVs by 2025, as laid out in Governor Roy Cooper’s Executive Order 80, the surcharge could generate an extra $22 million annually.

Even though hybrid cars use gasoline, albeit much less of it because they also rely on battery power and an electric motor, their owners would also pay more: A $87.50 registration fee next year, $112.50 in 2021 and $137.50 in 2022.

The fees could further increase, as the bill calls for them to be adjusted according to the Consumer Price Index.

About 20 states assess registration fees on EVs, according to the National Conference of State Legislatures. Eight of those states also place surcharges on hybrids. Annual costs range from $50 to $200.

In at least four states—California, Indiana, Mississippi and Utah—these special fees are pegged to inflation or the Consumer Price Index, according to the NCSL.

Senate Bill 513 (primary co-sponsors Democratic Sens. Terry Van Duyn, Wiley Nickel, Michael Garrett) builds on  the governor’s executive order, which also requires a 40% statewide reduction in greenhouse gases  from 2005 levels. The bill sets a state goal for 100% clean energy by 2050.

That benchmark will be difficult to achieve if House Bill 543 (primary co-sponsors Republican Reps. Jimmy Dixon and John Bell) becomes law. It would amend the state’s Renewable Energy Portfolio Standard to flatline the percentage of clean energy that investor-owned utilities would have to generate or buy.

Currently, the REPS requires Duke Energy and Dominion Energy to derive 10% of their power from renewable sources or clean energy, based on 2017 retail sales. In 2021, that percentage increases to 12.5%, based on 2020 retail sales.

However, the proposed legislation would keep the rate at 10%.

Duke Energy Progress, Duke Energy Carolinas and Dominion have all complied with the REPS benchmarks, according to NC Utilities Commission documents. In filings with the NCUC, Duke has said the utility “remains committed to meeting the requirements of NC REPS, including the poultry waste, swine waste, and solar set-asides, and the general requirement, which will be met with additional solar, hydro, biomass, landfill gas, wind, and energy efficiency resources.” Because of House Bill 589, a clean energy bill passed last year, Duke Energy’s  “long-term general compliance needs are expected to be met.”

Duke’s 15-year Integrated Resource Plan, though, is less ambitious. The controversial IRP indicates the utility will still rely on coal for up to 9% of its energy needs, with the bulk of its power coming from natural gas through 2033. Duke plans to increase its renewables generation by just 8 percent and its energy efficiency savings by 5 percent.

House Bill 541, another progeny of Reps. Dixon and Bell, would deincentivize solar energy systems by reducing their tax breaks. Currently, 80% of the appraised value of a solar energy system is excluded from property tax. If the measure becomes law, only 60% of its value would be exempt. Half of the extra tax collected would go to public schools and community colleges.

2 Comments


  1. Dory Larsen

    April 4, 2019 at 1:12 pm

    The cost of what the average gas payer was left out of this article and is an important point of reference. If you assume you drive 13,500 miles annually and get 25 mpg (most SUVs and trucks get less) that is about 540 gallons of gas per year. If you spend $.362 per gallon that is $195.48 in gas taxes. Why would you ask an EV driver to pay more than polluting-gas-car drivers? How can you justify penalizing those making a better choice for the environment and public health?

  2. Josey Waters

    April 12, 2019 at 12:22 pm

    I don’t know about “more versus less” but their argument seems to be that drivers pay no fuel tax but use the roads, and they only want everyone to pay their fair share. Nothing wrong with everyone giving their fair share!

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