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Published on March 25th, 2016 | by Kyle Field

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California Public EV Charging Expansion Comes With Growing Pains

March 25th, 2016 by  

The state of California is center stage of the electric vehicle market, and the California Public Utilities Commission (CPUC) is taking steps to make further improvements, but the path forward is anything but clear. In the first few months of 2016, the CPUC has approved two massive new programs aimed at expanding EV charging in California, but not everything is sunshine and rainbows in the Golden State.

These programs are aimed at increasing EV adoption by incentivizing the installation of public EV charging infrastructure, and they highlight the delicate balance required when tapping utilities as a vehicle for incentivizing EV adoption. Utilities already have a vested interest in building out EV chargers in their areas, as new chargers represent new revenue streams, but do utilities need to own the EV charging hardware as well?

Further complicating the situation, as we lean forward into intelligent, dynamic vehicle-to-grid (V2G) applications, the water gets murkier still. Let’s take a look at 3 different approaches to building out and incentivizing EV charging stations by 3 different utilities in the state.

volta_charging

Volta Ad-Supported Public Charging Station

The first program was put forth by one of the major power providers in the greater Los Angeles Area — Southern California Edison (SCE). SCE’s plan looks to encourage and incentivize third parties to install chargers, and accepts the addition of a new revenue stream as the compensation for the deal. SCE’s deal has the utility owning and financing the infrastructure required to prepare EV charging sites but leaves the charging hardware selection up to the owner of the site.

Drawing a firm line between utility and EV charging service provider, the SCE approach attempts to strike a healthy balance between incentivizing EV charging installations by building out required utility-owned infrastructure, while at the same time allowing for competition and market needs to dictate which chargers are installed, how much the charging costs, and what network the chargers use. Under this plan, the cost of the charging can be changed depending on the application: employers have the flexibility to offer charging as a perk for employees, business owners can offer cheap or free charging to lure in customers, or charging can be integrated into the cost of value-add parking lots.

The second program comes from the San Diego utility San Diego Gas & Electric (SDG&E), which is focused on tapping the growing fleet of EVs to stabilize the grid in a modified V2G implementation. SDG&E’s 2015 Annual Supplier Diversity Report shared a concise summary of its approach:

“SDG&E is bringing opportunities for diverse suppliers through our Vehicle Grid Integration pilot. This is a proposal to install thousands of electric vehicle charging stations throughout SDG&E’s service territory within the next five years.”

The SDG&E plan offers many of the benefits of the SCE plan, with the utility financing the cost of infrastructure upgrades required to get a new site ready for EV charging, and gives the owner of the site a choice of chargers, but only from a list of approved chargers. With a focus on V2G, SDG&E had to take a different approach, as not all stations support V2G functionality, which is admittedly more complex than just a standard plug-and-play charger.

In what is likely a pilot constraint, the current program requires customers to schedule charging a day in advance based on the price of electricity and the number of hours they want to charge. This allows customers to micromanage charging costs with specific incentives to charge during off-peak hours.

While the current implementation relies heavily on manual, frequent interaction, this solution is just begging for software automation and controls that would allow customers to put priorities in order and let some algorithms do the day-to-day heavy lifting for them.

For instance, if ending the charging session with a full charge is the priority, the customer might end up paying a premium for the session. Conversely, they might choose a medium pricing bracket and not always end up with a full charge but would always have at least enough to make it home with a 20-mile buffer. This is the most exciting approach to charging and really leans forward into what is possible vs just executing based on the technologies and solutions that exist today. Look for some market-disrupting technologies to come from this pilot.

EVs Charging

Free Charging Santa Monica City Parking Structure

Finally, a proposal by central coast utility Pacific Gas & Electric (PG&E) is seeking approval for a utility-owned and operated charging network. The PG&E approach takes a starkly divergent approach to charging, with taxpayer-funded charging stations serving to extend the monopoly of the electric infrastructure to a new outlet. The utility has gone through several revisions of the proposed program and has been asked to look at the aforementioned programs by SCE and SDG&E as examples of what the CPUC is looking for from the utility.

Interestingly, the solution is completely ratepayer-funded, meaning normal utility customers will pay a premium to add EV charging outlets that are then owned by the utility, from which the utility will profit from the sale of electricity. The program ends up looking like the utility is asking for an interest-free loan from ratepayers, who are the same customers of the very infrastructure being installed with the capital.

Oftentimes, monopolies are permitted when they are seen to be a way to deliver the lowest-cost, highest-reliability service to customers for critical infrastructure. This is the case for electricity, water, and sewer services in most areas because it would just be wasted money to have multiple power lines run to a single house as the owner switches providers. In this case, the monopolistic approach PG&E is proposing serves to increase the cost to install the systems, with a total installed cost that is more than double that of the program proposed by SCE and just under double the price per station proposed by SDG&E.

teslas_supercharging

Tesla Superchargers — Not Ratepayer Subsidized

Ultimately, the great news underpinning all of these proposals is that the CPUC understands the criticality of EVs and public charging infrastructure and is actively working to advocate the expansion of the existing network. These growing pains are natural, but must not be left to fester. Customer interests must constantly be balanced against the needs of the investor-owned utilities (IOUs), and unfortunately, the PG&E program does not quite strike a healthy balance.

Thankfully, there are two shining examples of successful, incentivized EV charging programs by utilities that are already being looked to as benchmark programs by other utilities in California and beyond.

All images by Kyle Field





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About the Author

I'm a tech geek passionately in search of actionable ways to reduce the negative impact my life has on the planet, save money and reduce stress. Live intentionally, make conscious decisions, love more, act responsibly, play. The more you know, the less you need. TSLA investor. Tesla referral link: http://ts.la/kyle623



  • J.H.

    I’ve personally have run in to this issue in Colorado. I currently live on the Nebraska state line, 200 miles east from Denver, with no infrastructure. As an entrepreneur I view it as an UN-taped market place. Out of necessity I’ve decided to build my own pilot program. A public changing station every 50 miles. The first install is tied to my state of the art small wind turbine. The Local coop installed a 3 phase service at (no cost) with in 3 hrs, with a phone call from my car on a trip back from Denver, the truck was in my drive upon arrival. To get to Denver there are four different utilities with four different requirements for 3 phase service. To move 3 phase service is not cheap, some utilities want $25-30k to move a pole across the street, in cash. Our second and third site location will be in the mts just west from Denver. Luckily they have the same utility coop but different from the first install. They need a $500.00 (per) up front engineering report, and then they need cash, paid up front for the install for the service. The utilities and pricing are all over the board. It appears some want new services and others fight it. This all drives the cost, and I for see different pricing at different location because of it. The fourth location will be a 100 east of Denver. At that point, it may be time to buy an EV.
    http://cleantechnica.com/2015/08/08/wind-orchard-energy-chasing-wind-for-electric-cars/

    • Omega Centauri

      I would think it would be a real chicken and egg problem -at least if you want the charge stations to pay for themselves. There are few if any EVs in the area, because there are no charge stations, and anyone financing a charge station is going to have to wait years before there are enough customers to start paying it back.

      • Kyle Field

        Given the importance to the planet of promoting EVs, charging stations can also be built as philanthropic undertakings. Having said that, given the early entry, self sustaining charging stations like this along key corridors are almost guaranteed to payoff as long as they keep up with the latest charging standards/speeds.

  • JamesWimberley

    Standing back, the good news is that utilities now see they will benefit one way or another from electrifying transport: an all-new, off-peak, and flexible market. Can you see the Kochs now winning a lobbying fight with the three California utilities?

  • Ninjaneerd

    While the current implementation relies heavily on manual, frequent interaction, this solution is just begging for software automation and controls that would allow customers to put priorities in order and let some algorithms do the day-to-day heavy lifting for them.

    This! Lots of this!
    I’d love to see microcontracts happen. For example, I plug-in to charge but I specify not to charge if the price exceeds “x” and actually sell back power if price gets above “y” up until my cars battery drops below “zz”%.

    For this to happen though the price of electricity production needs to be known at more discrete times. Unfortunately, for that to happen the PUCs need to stop masking these market indicators through set rate schedules. Really unfortunately is that PUCs don’t seem to understand market signals…

    • JamesWimberley

      Before we hand everything over to our robotic home controllers (“Jeeves”), introducing fine-grained ToD prices would confuse non-automated customers with cognitive overload. I suppose the fine-grained pricing could be conditional on the home automation. Up your game, Nest.

      • Kyle Field

        I think the modern interpretation is “Jarvis” 😀

        I agree – we essentially want/need the Nest of Public charging…

      • Ninjaneerd

        It’s true, having that much information could overload meat based processors, but like you mentioned our homes (or appliances) could be smart and do that optimization for us.

        On the other side, we really need those price signals to allow battery storage to compete (and everything else in the books to allow for wind/solar to be a bigger part of our lives).

  • eveee

    Monopolies always want you to believe that monopoly is the only possibility. Especially when there are others.

    • Ninjaneerd

      Yup!
      The idea of natural monopolies is quite strange. If someone can take my garbage away cheaper or give me electricity cheaper, I think I’ll take it. Monopolies are great if you like to limit innovation and want to pay more for terrible service.

      • neroden

        Natural monopolies really do exist. Look at the historical situation when you had three or four competing railroads trying to serve the same companies. All four went bankrupt, typicallly.

        Nobody ever even tried to do the same thing with roads, it’s so obvious that they’re a natural monopoly.

        Natural monopolies typically arise from a *network* where the main value is in *connectivity*. The monopolies shouldn’t be allowed to control the edges of the network. In electricity, this means “transmission and distribution” is a natural monopoly, but generation and usage and storage are NOT. In roads, the roads are a natural monopoly, but the cars are NOT. In the internet, the fiber optic cables are a natural monopoly, but the rest of it is NOT.

        One characteristic in a natural monopoly is that the monopoly provider SHOULD BE cheaper than any attempted competition. Garbage collection is definitely a natural monopoly. I live in a township next to a city. The city has city-run natural-monopoly garbage collection. The towship has two competing private garbage haulers. The city garbage collection is cheaper than EITHER of the private garbage haulers. The private garbage haulers are so expensive that I just drive my garbage to the dump myself. This is wasteful and means lots of redundant trips to the dump. If I lived in the city, I’d let the city garbage trucks do the work…

        I think private monopolies should be illegal. If there’s gonna be a monopoly it should be under the control of the voters, like the roads and the city garbage collection are.

        Private electricity transmission companies are an abomination; the grid should be owned outright by the government just like the roads are. In the places where it is, you usually get much cheaper prices.

        • Ninjaneerd

          Natural monopolies can create strong barriers to entry, but innovation often times finds a way to subvert the issue and do things better/cheaper. The problem is when companies lobby for regulated control of their “natural monopolies”.

          I think government supported monopolies should be illegal. If someone can come in and provide a better/cheaper service, more power to them.

          I live in a city that pays substantially more for garbage than one city away and everything just outside our incorporated city. I’m friends with the owner of the garbage company in the other city and he’d love to serve us, but the city won’t let him (they’ve granted his competitor a natural monopoly). He runs a more efficient company, with newer better trucks, who’s routes are automated, they recycle more, and he’s cheaper .

          Tell me again why it’s in my best interest to pay more for an inferior product?

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