Oregon Moves Toward Mandating Per-Mile EV Fees, Expanding on Voluntary Program
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Key Takeaways
- Oregon is shifting from voluntary to mandatory per‑mile road usage charges for EVs and hybrids, reflecting growing pressure on gas-tax revenues as electrification increases.
- Starting in 2027, EV drivers would pay approximately 2.3¢ per mile, with plug‑in hybrids phased in by mid‑2028—or alternatively, choose a flat annual fee of about $340.
- The new system would replace supplemental EV registration surcharges, simplifying administration and aligning charges more closely with actual road use.
- Oregon’s decade-old voluntary OReGO program (2¢/mile, ~800 participants) has served as a pilot, but low enrollment—due to privacy and technology concerns—highlights challenges the mandatory model will need to overcome.
Oregon could possibly mandate per-mile road usage fees for electric and hybrid vehicles, marking a significant shift in how the state funds its transportation system as gas tax revenues decline.
Under a legislative proposal debated in a special session this summer, EV owners would begin paying about 2.3 cents per mile starting in 2027, with plug-in hybrids and other hybrids phased in by mid-2028. Alternatively, drivers could opt for an annual flat fee of $340. The plan would also end the state’s supplemental EV registration surcharges, replacing them with the new mileage-based system.
The move reflects growing pressure on Oregon’s transportation budget, which faces a projected $300 million shortfall due to inflation, rising costs, and declining fuel tax revenues as more efficient and zero-emission vehicles take to the road. Lawmakers are also considering a modest gas tax increase and other fee adjustments as part of a broader funding package.
Oregon is no stranger to mileage-based fees. In 2015, it became the first state to launch a voluntary program, known as OReGO, that allows drivers to pay 2 cents per mile instead of traditional fuel taxes.
Participants in OReGO receive credits for fuel taxes paid and enjoy lower registration fees compared with non-participants. For EV drivers, that can mean reducing a two-year registration fee from $316 to about $86. The program was designed to test whether per-mile fees could serve as a long-term replacement for the state’s gas tax, which has historically funded road and bridge maintenance.
Despite its innovative approach, enrollment in OReGO has remained limited, hovering at around 800 participants statewide. Privacy concerns, technology requirements, and the voluntary nature of the program have kept participation modest, though state officials have used it to refine systems for mileage tracking and fee collection.
The newly proposed system would make per-mile charges mandatory for electric and hybrid vehicles. That represents a fundamental shift from experimentation to statewide policy.
As federal and state policymakers across the U.S. debate how to replace declining gas tax revenues, Oregon’s shift could serve as a blueprint. States including Hawaii have already approved similar mileage-based approaches, though Oregon’s system is the most advanced in terms of technology and real-world testing.
Q&A
What’s changing in Oregon’s EV road-use program?
Oregon is proposing to shift from its current voluntary pay-per-mile program (OReGO) to a mandatory per-mile road usage fee for electric and hybrid vehicles. Starting in 2027, EV owners would pay around 2.3 cents per mile, and plug-in hybrids would be phased in by mid-2028. Alternatively, drivers could choose a flat annual fee of about $340, replacing existing supplemental registration surcharges.
How has Oregon’s voluntary OReGO program performed so far?
The OReGO program, launched a decade ago, remains limited in scope—only about 800 participants statewide. It allows members to pay per-mile fees (roughly 2 cents per mile) in exchange for lower registration costs; for example, two-year registration fees can drop from about $316 to $86 for EV owners in the program. However, concerns over privacy, technology requirements, and its voluntary nature have kept enrollment low.
Why is Oregon considering this shift from gas taxes to per-mile fees?
The move reflects a fundamental change in how transportation infrastructure is funded. With EVs and efficient gas vehicles paying little or no gas tax, revenue for road and bridge maintenance has declined. A per-mile charge ensures that drivers contribute based on actual road usage, rather than fuel consumption. The shift represents a move from a consumption-based tax to usage-based funding to maintain long-term infrastructure financing.
What challenges and debates are surrounding the proposed fee?
Key concerns include:
- Privacy issues: Tracking mileage may require data collection, raising worries about surveillance and data security.
- Fairness and cost: Critics argue that EV drivers—who already paid higher registration fees—could end up paying more than drivers of gas vehicles. Some analyses suggest EV drivers may pay more than vehicles with 20 MPG, though state officials dispute this, saying EVs would still pay less overall if the gas tax increase proposed by the Governor proceeds.
