Originally published on the ECOreport.
On February 9, 2015, Pacific Gas and Electric (PG&E) brought forward a proposal to install more than 25,000 EV charging stations within its territory. Readily embraced by environmentalists, the project faced opposition from ratepayers (questioning the value of this investment) and other EV charging service providers (who did not relish direct competition from a utility).
Last October. PG&E reached a settlement with 10 interested parties that reduced the project to almost a third of its original size. Pointing out that “No proposal is supported by all parties, and no party supports all of the proposals made,” a California Utilities Commission (CPUC) judge brought forward a new proposed decision of his own. Only, according to Tom Ashley, head of government relations for Greenlots, the proposed terms for what is still the largest EV charging program in North America “could have a chilling effect on utility investment in EV infrastructure.”
North America’s Largest EV Charging Program
“Involving utilities changes the game. We’ve been reliant upon government funding, limited automotive investment and very limited private investment. Their involvement can allow EV adoption and ultimately this entire market to scale much faster,” said Ashley.
He added, “A utility revenue and profit model is built on this regulatory process and approval for ratebasing infrastructure investment, in the ratepayers interest, that result in an agreed upon rate of return on those investments. … If the utilities are investing in this space, and especially if they are owning and operating the charging infrastructure, there is a business model. They can make money. They can be motivated to invest in this space.”
Administrative Law Judge Darwin E. Farrar’s decision calls for PG&E to “deploy the service connection and supply infrastructure (make-ready infrastructure) to support up to 7,500 Electric Vehicle Level 2 charging ports” for a cost not exceeding $130 million.
Cutting The 100 DC Fast Chargers
He also cut the 100 DC fast chargers that were in the original deal. Ashley described DC fast chargers as “the single most challenging sector” for attracting private investors “because all of the challenges in a level 2 scenario are amplified. Everything costs more.” It is not attractive to ratepayers, whose primary interest is profit.
“However, DC fast charging is incredibly important to the growth of EV adoption. They make the idea of owning an EV more attractive to people who do not have a designated parking space, whether they live in a multi-unit community or a house that relies on street parking. This is the element of the settlement agreement that Greenlots is most passionate about,” said Ashly.
PG&E’s Proposed 35% Ownership
“PG&E may own up to 35 percent of total Electric Vehicle Supply Equipment (EVSE) ports projected to be installed through the pilot,” though only if these units are in disadvantaged or multiuse communities, and “PG&E shall present all customers with the option to own the EVSE.”
This complicates the process for everyone until PG&E reaches its 35% quota.
“I’m not saying that the program will reach that 35% number. I think it will because I don’t think the site hosts want to own this stuff and have the responsibility for maintaining it. That said, it is possible that all (PG&E’s) customers choose to own.”
Regardless of their choice, individual sites are to choose who is operating and maintaining their infrastructure.
“This challenges the utility’s ability to ensure that infrastructure is up and running reliably. They view transportation as a clear path to optimize the grid at a distribution level, even at a larger level. In a utility ownership scenario, the utility is going to have direct visibility, direct communication and possibly a level of control over the charging on that system. They can send signals. They can facilitate shaping that charging load to optimize the grid whatever they want to, whether it is rapid for renewables, making better use of baseload power at night, or any of a number of things,” said Ashley.
Is This A Bad Precedent?
Ashley believes this deal sets a bad precedent for other utilities thinking about investing in electric transportation. Utilities could lose interest if they do not believe their transportation/electification investment is going to optimize the grid or, even worse, that it could harm it.
The CPUC could vote on judge Farrar’s proposed decision as early as its next business meeting, December 15, 2016.
All photos courtesy Greenlots
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