Thursday, October 23, 2014

Charging Stations

Cars are parked somewhere 23 hours a day – that’s where we need charging stations



Navigate this Report
Back to Electric Vehicles Index
1. Background

2. Acronyms/Definitions
3. Business Case
4. Benefits
5. Risks/Issues
6. Success Factors
7. Next Steps
8. Case Studies
9. Companies
10. Links

1.Background
  • Great interest and investment in electric vehicles is changing the future complexion of transportation and represents a significant demand for new products and services, including bi-directional information flow in AMI systems and smart charging systems. Today only 0.02% of light-duty vehicles are grid-connected, but most forecasts estimate ultimate penetration of this market at 8-16%, with some aggressive estimates at 37%, by 2020.
  • Building an infrastructure for PHEV’s may seem somewhat futuristic, but it isn't. The first-generation plug-in hybrid vehicles (not counting the relatively small number that have been retrofitted by hobbyists and EV fanatics) hit the market in 2010. PHEVs and EVs require new supporting infrastructure, including charge stations in public locations including:
    • Apartments, condominiums and hotel garages
    • Employee parking locations
    • Public lots and curbside
    • Retail
    • Recreation


2. Acronyms/Definitions
  1. AB 2565 - Rental property: electric vehicle charging stations - California law passed in August  2014 - Requires an owner of a commercial or residential property to approve the installation of an electric vehicle (EV) charging station if it meets specified requirements and complies with the owner's process for approving a modification to the property and makes a term in a lease of a commercial property, executed, renewed, or extended on or after January 1, 2015, void and unenforceable if it prohibits or unreasonably restricts the installation of an EV charging station in a parking space.

  2. Battery Exchange - Electric Vehicles are limited by the battery’s capacity and the time to recharge it. A battery exchange system is sometimes proposed as a solution; swapping a depleted battery for a fully charged one at an “electric filling station”. Battery exchange will work best when battery types are standardized and there is a relatively low number of vehicles. This model has been proposed for both Denmark and Israel and is part of the Project Better Place introduction strategy supported by Renault/Nissan.

  3. BDC - Battery Data Control - System that automatically adjusts charging rates to minimize charging time while maximizing battery life A maximum charge time is set as a backup to avoid overcharging. Incorporating battery power storage into current automobile frames will require systems to monitor the status of the battery including battery charge and temperature.

  4. Cell Reversal - Reversing polarity of terminals of a cell or battery due to over-discharge.

  5. Commercial Vehicle Depot Charging - It could be useful for the efficient operation of commercial vehicles to have access to three phase power for charging their high capacity batteries. The operational requirement for maximum usage of a vehicle will benefit from quick charge during a planned operational break such as reloading or driver lunch break. These connections should be available at most industrial or light commercial sites.

  6. Conductive Charging - Requires a connection via a plug like many household appliances.

  7. CHAdeMO (sometimes spelled CHΛdeMO) - The trade name of a quick charging method for battery electric vehicles delivering up to 62.5 kW of high-voltage direct current via a special electrical connector (500V and 125 amps). It is proposed as a global industry standard by an association of the same name. CHAdeMO is an abbreviation of “CHArge de MOve", equivalent to “charge for moving”, and is a pun for "O cha demo ikaga desuka" in Japanese, meaning “How about some tea” (while charging) in English. CHAdeMO was formed by The Tokyo Electric Power Company, Nissan, Mitsubishi and Fuji Heavy Industries (the manufacturer of Subaru vehicles). Toyota later joined as its fifth executive member. Three of these companies have developed electric vehicles that use TEPCO's DC connector for quick charging
    CHΛdeMO logo

  8. Deep Discharge - Discharge of the battery to below the specified voltage cutoff before the battery is replaced or recharged.

  9. DOD - Depth of Discharge - The percent of rated capacity to which a cell or battery is discharged. Normally stated as a percentage of the nominal ampere-hour capacity; 0% DOD means no discharge. DOD is the inverse of SOC: as one increases, the other decreases. While the SOC units are percent points (0% = empty; 100% = full), the units for DOD can be Ah (e.g.: 0 = full, 50 Ah = empty) or percent points (100% = empty; 0% = full). As a battery may actually have higher capacity than its nominal rating, it is possible for the DOD value to exceed the full value (e.g.: 52 Ah or 110%), something that is not possible when using SOC.

  10. Duty Cycle - The time duration and use frequency during which a battery is drained (i.e. 2 hours/day).

  11. EPS - Electrified Parking Spaces

  12. EVSE - Electric Vehicle Supply Equipment - The device that the vehicle connects to. Level I EVSEs are unique cord sets that integrate the EVSE and its required safety functionality into a box
    connected in-line with the cord, and which can plug into a traditional 110 volt plug with a dedicated 15 amp circuit. Level II EVSEs need to be mounted and wired to an electrical panel at 220 volts.
    Several safety issues will require the use of EVSEs instead of simple cords that connect an outlet to a vehicle. Properly designed EVSEs will ensure that vehicles are properly connected and grounded before power begins to flow; they will prevent a driver from pulling away while the vehicle is still plugged in; and for batteries that have out-gassing, they will necessitate proper ventilation for charging.

  13. Fast Charging Stations - Require more complex chargers than currently deployed commercially. Larger commercial vehicles would prefer to have three phase (65 amp) charging to ensure a quick turnaround of delivery vehicles; this is widely available on commercial premises but not elsewhere. Building in quick charge capability to a vehicle will however add further costs. Typically quick charge could take a battery from 20% to 80% capacity in 10 to 15 minutes but with potentially significant impacts on the generation and transmission/distribution networks. These chargers will be designed such that they can detect battery cell chemistries to prevent damage due to an inappropriate charging profile. The problems of supply attendant with fast charging are discussed in sections 6 and 8; these problems could be overcome by the siting of a substation close to any fast charging station, or by local energy storage at the station. With the initial growth of EVs in city areas, well distributed fast charging stations will afford a high degree of security for nervous potential users. For EVs to expand outside city areas these stations are essential.

    Designed for commercial applications, these chargers range from 30 kW to 250 kW with the goal
    of a complete charge in less than 10 minutes. Level III chargers will be significantly more expensive than Level I or II chargers and are expected to be available at commercial charging establishments. As an example, a Level III charger operating at 50 kW can fully charge a 24 kWh battery in approximately 25 minutes and could cost between $25,000 and $50,000. This happens to be about the same as the cost of a typical gas station pump. Fast charging rates will likely not be limited by the details of the standard, but rather by grid infrastructure capability and the tolerance of the battery chemistry.

  14. GFCI - Ground Fault Circuit Interrupter - An electrical wiring device that disconnects a circuit whenever it detects that the electric current is not balanced between the energized conductor and the return neutral conductor. Such an imbalance is sometimes caused by current leakage through the body of a person who is grounded and accidentally touching the energized part of the circuit. Also known as ground fault interrupter (GFI) , an appliance leakage current interrupter (ALCI) or residual current device (RCD)

  15. Home Charging - The most common location for charging an electric car will be at home utilising a 240V/13A or 16A connection. This will require a switchable socket and a surge protection device, but should not pose any problems for most homes.

  16. ICE – Internal Combustion Engine

  17. IEC - International Electrotechnical Commission

  18. IEC 62196 - Standards for Plugs, socket-outlets and vehicle couplers - Conductive charging of electricity vehicles - Part 2: Dimensional interchangeability requirements for pin and contact-tube vehicle couplers. Standard allows a 1 or 3-phase current up to 250Amp. AC.

  19. IEC 62196-2 Type 2 - Europe has yet to agree on a regional plug standard, which has the potential to restrain a market of consumers that are likely even more motivated to buy plug-in vehicles than those in the United States. The IEC has been working on the 62196-2 Type 2 plug standard  for several years. This plug would enable charging at either single phase or three-phase AC power up to 43.5 kW that is available in many parts of Europe.

    However, various camps in Germany, Italy, and France are at odds on the specification, and a June 2011 meeting to reconcile the differences proved futile. The German automakers are fairly unified around technology proposed by Mennekes Elektrotechnik as well as the European Automobile Manufacturer’s Association. Despite the lack of a European standard, EV charging infrastructure is currently being installed today, with hundreds of street-side charge spots that are “dumb” outlets that provide the available power from household current without the additional safety or smart charging features that will benefit consumers and utilities in North America.

    The German contingency also wants a single plug standard that could handle fast direct current (DC) charging as well, which would result in a fairly large connector that some view as too unwieldy for consumers to safely operate. In Japan and the United States, automakers and equipment manufacturers believe that two charge ports on the vehicle, (CHAdeMO for DC charging, and J1772 or an alternative plug for residential charging) is acceptable to consumers.

  20. Inductive Charging - Requires no direct plugged connection, only proximity. Inductive charging carries a far lower risk of electrical shock, when compared with conductive charging, because there are no exposed conductors. The ability to fully enclose the charging connection also makes the approach attractive where water impermeability is required; for instance, for electric hygiene devices, such as toothbrushes and shavers, that are frequently used near or even in water. Inductive charging makes charging mobile devices and electric vehicles more convenient; rather than having to connect a power cable, the unit can be placed on or close to a charge plate.

    The main disadvantages of inductive charging are its lower efficiency, higher cost and increased resistive heating in comparison to direct contact.

  21. JEVS G105-1993 (Japan Electric Vehicle Standard) from the (JARI) Japan Automobile Research Institute which was the basis for CHΛdeMO Level III charging. Tokyo Electric Power Company (TEPCO) has developed patented technology and a specification for high-voltage (up to 500 V DC) high-current (125 A) automotive fast charging via a JARI Level-3 DC fast charge connector.

  22. Level I Charging System – Uses the traditional 110 volt outlet. Though relatively slow, it may be sufficient for many PHEV owners.

  23. Level II Charging System -Specified at between 208 and 240 volts (the voltage used in many homes by clothes driers, ovens, and well pumps). The longer charges required by larger EV batteries will likely convince many consumers to opt for higher-power Level II charging.

  24. Level III Charging System - 480 V DC 125 amps. Also known as Fast Charging, Level 3 facilities utilize direct current. Most electric vehicles (EVs) have an on-board charger that uses a rectifier to transform alternating current from the electrical grid to direct current suitable for recharging the EV's battery pack. Cost and thermal issues limit how much power the rectifier can handle, so beyond around 240V and 75 Amp it is better for an external charging station to deliver direct current (DC) directly to the vehicle's battery pack. Level III will allow a fast charge for a driver who forgot to or was unable to charge overnight, or who is travelling beyond the range of the vehicle without the time to stop and wait for a slower charge. Level III chargers will also likely need to be deployed along intercity roads to provide charging opportunities for longer trips. While Level 1 and Level 2 charging uses the standard SAE J1772 plug, standards for Level 3 are under development.

  25. NEC 625 – National Electrial Code for Electric Vehicle Charging System I – General, II – Wiring Methods, III – Equipment Construction, IV – Control & Protection, V – EV Supply Equipment Locations

  26. Overcharge - The forcing of current through a cell after all of the active material has been converted to the charged state.

  27. Over-Discharged - Discharge past the point where the full capacity of the cell has been obtained.

  28. Primary Battery Detection - Primary batteries are not designed to be recharged. Many chargers can detect a primary battery and then terminate the charging process.

  29. Public Charging Points - For practical and peace of mind reasons the abundance of public charging points will be important. There are a number of potential methods for charging for their use including an annual fee with free access or charging by the unit of time used. These chargers will need to be deployed both on streets and in car parks. Other areas of consideration are charging access for blocks of flats and work based charging. Charging points, like water and power distribution networks and telecommunications networks, could be designated as regulated assets, typically enabling the service provider to cover installation and operating costs and achieve an adequate return on their investment. This could be an incentive for utility firms to install them.

  30. Rated Capacity - The average capacity delivered by a cell or battery on a specified load and temperature to a voltage cutoff point, as designated by the manufacturer; usually an accelerated test approximating the cell or battery’s capacity in typical use.

  31. Roaming - The ability to charge at different locations. The capability for the electric vehicle to charge as easily as a gas powered engine will be critical to mass deployment. This can be enabled by the Electric Vehicle but needs participation of a Clearing House and a nationwide effort on a common standard.

  32. SAE – Society of Automotive Engineers - Publishes automotive related standards in North America.

  33. SAE J1772 Plug and Receptacle
  34. SAE J1772- A North American standard for electrical connectors for electric vehicles. It covers the general physical, electrical, communication protocol, and performance requirements for the electric vehicle conductive charge system and coupler. The intent is to define a common electric vehicle conductive charging system architecture including operational requirements and the functional and dimensional requirements for the vehicle inlet and mating connector. The Standard defines Level I and Level II charging as well as the interface between the vehicle and the EVSE.

    Level I and Level II charging utilize the same plug that actually plugs into the car. What is different is how those plugs are connected to the grid. SAE has also defined direct current (DC) fast charging, commonly referred to as Level III charging. The connector is designed for single phase electrical systems with 120V or 240V such as those used in North American and Japan and is designed to support electrical current up to 70A. The round 43 mm diameter connector has five pins and supports communication over power lines, to identify the vehicle and control charging.

    J1772 covers the physical interface, control, and data signals for the coupler, including a control pilot signal, which:
    • Verify that the vehicle is present and connected
    • Transmit supply equipment current rating to the vehicle
    • Allow energizing and de-energizing of the charge current circuit
    • Monitor equipment grounds
    • Establish vehicle ventilation requirements (e.g. battery pack fans commanded on or off)


    The standard also provides for a proximity detector that will detect a plugged in coupler even if the charger is de-powered, to help prevent the vehicle operator from driving away with the coupler still engaged. Performance requirements include impact resistance and a life- span of 10,000 cycles.

  35. SAE J2293 - Standard for Energy Transfer System for Electric Vehicles - In addition to the specifications defining the physical connectors, interfaces, and power levels, SAE is also developing specifications that will govern the communication between vehicles and the grid. This standard defines all characteristics of the total EV Energy Transfer System (EV-ETS) necessary to insure the functional interoperability of an EV and EVSE of the same physical system architecture. The ETS, regardless of architecture, is responsible for the conversion of AC electrical energy into DC electrical energy that can be used to charge the Storage Battery of an EV.

  36. SAE J2836/1: Use Cases for Communication between Plug-In Vehicles and the Utility Grid. The standard, published in 2010, establishes use cases for two-way communication between plug-in electric vehicles and the electric power grid, for energy transfer and other applications.

    It also provides a set of communication requirements for use with various load management and rate programs that will be established by utility companies related to the charging of plug-in electric vehicles. The various utility programs will enable consumers to charge their vehicles at the lowest cost during off-peak hours, and helps the utilities reduce grid impacts by minimizing electric vehicle charging during peak periods.

  37. Smart Charger - A charger that monitors the batteries condition and automatically terminates the main charge when it senses the battery is near full. Uses a microprocessor to monitor the battery voltage characteristics to determine when it is fully charged. Typically an algorithm based on a change of voltage is used with optional backup systems using temperature or timers. Often a low rate trickle charge is used to top the battery off or to maintain a full charge on the battery. Characteristics:
    • When compared to timer controlled chargers, smart chargers can typically charge batteries faster without impacting performance
    • Relatively expensive due to advanced circuitry
    • Generally higher battery temperatures associated with fast charging (less than 1 hour)
    • Fast charging can negatively impact battery cycle life

  38. SOC – State of Charge - Condition in terms of the rated capacity remaining at a given point in time. The SOC is typically stated as a percentage.

  39. SBS - Smart Battery System – A specification for determining accurate battery readings. It allows operating systems to perform power management operations based on remaining estimated run times. Through this communication the system also controls the amount the battery is charged. Communication is carried over an SMBus.

  40. Three Phase Power - Three circuit conductors carry three alternating currents of the same frequency which reach their instantaneous peak values at different times. It is the most common method used by grids worldwide to transfer power. It is also used to power large motors and other large loads. Fast charging using three phase power may not be possible for most cars, but it could be desirable for larger vehicles such as vans and buses.

  41. Trickle Charging - A method of recharging in which a secondary battery is either continuously or intermittently connected to a constant current supply that maintains the battery in a fully or near full charged condition. Typical trickle charges are between 0.03C and 0.05C. (ampere-hours)

  42. TSE - Truck Stop Electrification - Allows truck drivers to turn off their engines and plug into all weather electrical and communication outlets during mandatory rest periods. This reduces fuel costs, toxic exhaust emissions, maintenance costs and provides a better night's rest.

  43. UL2202- Standard for Electric Vehicle (EV) Charging System Equipment. Device Standard for Charging Stations Safety

  44. UL2231- Standard for Personnel Protection Systems for Electric Vehicle (EV) Supply Circuits Device Standard for Personal Protective Devices –Charge Current Interrupting Device

  45. UL 2251 –Standard for Plugs, Receptacles and Couplers for Electric Vehicles


3. Business Case
  • PHEV battery charging will need to take place at a number of disparate locations – home, work, public car parks, and on-street. Smart metering will need to be widely available to optimize energy draw from the grid and enable the vehicle user to select the most cost efficient charging. This will enable the network to predict off peak requirements and to recognize and bill individual users. So far, charging points are in an early stage of their development. Charging Stations will not only need to be designed and manufactured in high volume, but they will need to be installed, networked and maintained.
  • For PHEVs to dominate the market they will require similar levels of range and flexibility to those offered by current internal combustion vehicles (ICVs) Offering such high capability EVs will require a step change in battery technology,
  • Where is charging infrastructure required?
    1. Home Base – 50 – 65 % of parking time (residential – fleet locations)
      • Residential –
      • Multi-unit Dwellings – Urban/Suburban Areas (variety)
      • Generalized – Overnight Lot or Street Parking
      • Parking Structures
    2. Workplace – ~30 % of the time Company Lots, Private Lots, Street and Parking Structures
    3. Public - Commercial Establishments (varies 4% - 10% weekdays)
    4. Lot, Street and Parking Structures (varies on weekends)
  • It may mean swapping batteries at your local service station just like people now swap propane tanks to power their grill and for the same reason—to avoid the fill-up wait, which might be hours for a battery.
  • The hardware cost is fairly straightforward. A standard 110-volt station costs $1,200, while a 220 charger costs $2,500. (Fast DC chargers will likely cost more.) The cost will be paid up front or might get baked into a service contract. Installation adds additional costs, which will be overseen by third parties. The cost varies by geography: Arizona will likely be cheaper than San Francisco because homes are newer, already have robust residential wiring (thanks to the need for air conditioning), and a lower cost of living.
  • On October 12, 2011, Audi, BMW, Daimler, Ford, General Motors, Porsche and Volkswagen agreed to support a harmonized single-port fast charging approach for use on electric vehicles in Europe and the United States

    The system is a combined charging approach that integrates all charging scenarios into one vehicle inlet/charging connector and uses identical ways for the vehicle to communicate with the charging station.  Agreeing upon a single, harmonized DC fast charging system will help infrastructure planning, reduce vehicle complexity and improve the ownership experience for electric vehicle customers.

4. Benefits
  • See Benefits from PHEV Overview Blog
  • Fast Charging - convenient, safe, and truly fast charging stations that recharge EV battery packs in less than ten minutes - rendering concerns about EV driving range a thing of the past. With its new, universal EV charging adapter, AV seeks to ensure safe and reliable charging for all EVs and HEVs. Scheduled for commercial rollout in 2010, the PosiCharge EV fast charge system is a powerful tool
  • Improved Charging Efficiency – Current technology performs more work and uses less energy than with yesterday’s charging technologies.
  • Cost Effective Commercial Vehicle Charging Points - The availability of charging points is unlikely to be an issue for commercial vehicles where charging can take place at the depot, but there are a number of challenges for cars.
  • Battery Exchange Benefits
    • Lower Up-front Cost - With the battery separated from the car, the down payment and resistance toward going electric goes way down. When you buy a Toyota, you don't buy eight years of gasoline. Since the battery accounts for about one-third of the cost of an electric car, the sticker price will be far lower than competing cars sold with batteries.
    • Battery Degradation- Consumers don't have to worry about their battery degrading. In fact, their cars will stay younger longer because Better Place will circulate newer, longer-lasting batteries into the fleet.
    • Batteries will decline in price over time. - A couple years ago, lithium-ion batteries sold for around $900 a kilowatt hour, according to various estimates. Now lithium batteries sell for less than $500 a kilowatt hour. In December 2010 study, Deutsche Bank (DB) analysts revisited some figures posted in its previous report and lowered their projected future costs for automotive batteries. DB's December 2010 study pegged the cost of lithium-ion batteries at $250 per kWh by 2020, a substantial reduction from the $350 per kWh it forecasted back in November 2009



5. Risks/Issues
  • Regulatory Framework - One looming -- and possibly contentious -- issue is whether or not charging companies will be regulated as if they are utilities. Recently, Michael Peevey, the president of the CPUC, has signaled that that the CPUC may be inclined not to regulate these groups. California utilities are split on this question; PG&E, SCE and Sacramento Municipal Utility District claim that the charging providers are utilities, while San Diego Gas & Electric has stated that they should not be regulated.

  • Consumer Confidence - In order for users of EVs to feel confident about purchasing vehicles and undertaking journeys, they will need reassurance that sufficient street parking/charging is available. Given the average journey length of 9 miles and that 93% of journeys are shorter than 35 miles, many cars will only occasionally use charging points away from their homes but, in order to have confidence in the vehicles, it will be important that public points are widely available.

  • Range Anxiety - The current practical EV range limit is about 75 miles. Although this is sufficient to cover over 93% of all two-way journeys made, this is only about one fifth of the range of current ICEs. Consumers will have to adopt new “refueling” regimes and be prepared to have to wait considerably longer than current refueling times to enable continued use of their vehicle or to hire a long range ICE vehicle when needed. Li-ion batteries will continue to develop, offering higher energy density resulting in increased ranges to ease this problem. It is generally thought that electric cars with a comparable capability to current ICE vehicles will need a technological breakthrough, possibly only appearing towards the end of the time frame considered in this study. Until then there will be a degree of user anxiety regarding range surrounding whether there is enough charge left to complete their journey, but this should ease with familiarity and improved capability.

  • Private vs. Public Charging - Government agencies need to walk a fine line in building out the electric vehicle charging infrastructure; too little public charging, and people may not buy the vehicles. But if people get used to charging for next to nothing, private charging networks may not get off the ground.

    The government is keen on eliminating “range anxiety” — the fear that an electric vehicle might run out of battery power before it can be recharged — that could discourage consumers from buying electric vehicles. But if charging is readily available for free or at very low cost it could discourage the private sector from getting involved. The actual cost of the electricity to recharge a vehicle is on the order of $1 or so, depending on where you live.

    Charging equipment companies such as Coulomb want to sell to retail establishments, such as restaurants, shopping malls, and parking garages that would recoup their investment by charging access fees. To date there’s been little investment in private charging stations, which is understandable as the vehicles won’t arrive for another year.

    At $3,000 or more for a charging station, it will take a lot of vehicle charge sessions to recoup the investment. If people can charge at home for less than that or at free public stations, they may balk at having to pay several dollars for a charge. Therefore, privately owned stations could have a hard time attracting customers, or may only be able to charge a buck or two, which could make it very challenging to turn a profit.

  • Plug Access - Not everyone has a socket — a secure place to park their car and recharge it. Those living in apartment buildings, for example, lack this ability. Even where a plug exists, it may not have sufficient amperage to handle the load. Charging at parking bays is more likely to be during the day and therefore electricity charges would be greater. This would be an incentive for most to only charge back at home overnight, however, in areas of high density housing there is minimal dedicated parking and overnight charging will pose a significant problem. If this has to be done at a parking bay it could be a major disincentive. With limited off street parking available in cities, roadside charging points will be required to enable overnight charging and some fast charging capability in sufficient numbers to ensure their availability. Limited availability of charging points would create a supply restriction of the market.

  • Connection Standards - While Level I and II standards have recently been adopted in North America, there is not yet a standard for Level III charging. What does the connection between the car and the socket look like? Can it be standardized across vehicles? Doing so would avoid the rat's nest of incompatible connectors that we've come to expect from cell phones. And such connections will need to carry more than just electricity. They'll also need to enable smart communications, such as the ability to sell energy back to the grid, which involves billing or financial transactions. Incompatible connections may be fine for a phone, but not for a car, where a universal connection standard — akin to computers' USB cables and plugs — would ensure that any vehicle could connect to any plug, anywhere — and do so safely and durably.

    In Europe, various camps in Germany, Italy, and France are at odds on the specification, and a  IEC 62196-2 Type 2 meeting in June 2011 to reconcile the differences proved futile. The German automakers are fairly unified around technology proposed by Mennekes Elektrotechnik as well as the European Automobile Manufacturer’s Association. Despite the lack of a European standard, EV charging infrastructure is currently being installed today, with hundreds of street-side charge spots that are “dumb” outlets that provide the available power from household current without the additional safety or smart charging features that will benefit consumers and utilities in North America.

    The German contingency also wants a single plug standard that could handle fast direct current (DC) charging as well, which would result in a fairly large connector that some view as too unwieldy for consumers to safely operate. In Japan and the United States, automakers and equipment manufacturers believe that two charge ports on the vehicle, (CHAdeMO for DC charging, and J1772 or an alternative plug for residential charging) is acceptable to consumers.

  • Billing - Models for the settlement of PEV charging and discharging pricing, costs, and cross-utility payments are developing slowly, with significant technical and policy/regulatory unknowns. Proposals range from complex schemes for billing back to the driver’s (or the owner’s) home utility, simple charging as with current gasoline stations, to mixtures of prepaid and billed services as with cellular phones. When charging stations are ubiquitous, these issues will become even more important.

  • Safety Issues with Inductive Coupling - It is a safe assumption that any sizeable charging scheme would use inductive coupling. Trying to design connectors to do all: handle high power, have many cycles, work in an outdoor environment, and be cost effective is a tall order for a galvanic approach.

  • Long Residential Charge Times - In the US, 240V residential service is split phase (two 120V single phase lines that are 180 degrees out of phase from each other). Getting three phase service into a residence only serviced by single phase could be extremely expensive, so the bulk of three phase charging stations will probably be at places that already have the service - restaurants, shopping centers, hotels, etc.

  • Economics of Charge Stations - A profitable business model for public charging infrastructure has not been reliably demonstrated. The only way for consumers to recover the cost of an expensive battery is to defray it over time with comparatively cheap electricity. This upper bound on the price consumers are willing to pay to charge their vehicles, and the readily available substitute of home charging, places an upper limit on what consumers will be willing to pay for public charging.

    PHEVs require new supporting infrastructure, such as charge stations. Economies of scale for these services may or may not exist. The uptake of EVs and PHEVs is unlikely to be uniform across cities, neighborhoods or even streets, but charging points will need to be in place ahead of market uptake as no consumer would buy such a vehicle if they are unable to easily recharge their vehicle. Therefore a degree of under-utilization of charging points would be expected as the market develops. Current charging points cost between $8,000 and $12,000 to manufacture and install and this represents a significant cost which would need to be recouped within any business plan.

  • Infrastructure for High Charging Rate - Fast charging will require an on-board charger capable of accepting higher rates of charge, which would be an additional cost on the vehicle. The problem with the idea of rapid charge / discharge for things like cars is the total amount of energy and therefore power required. Residential charging is fundamentally limited by the distribution networks in neighborhoods. Anything much more than 4kW on a wide scale would require new transmission infrastructure. For locales where a lot of power could be concentrated, heating becomes the next big issue. Recharging a totally electric car with decent range is a 30kWh - 50kWh proposition. Try and compress that into 10 minutes and the charging power rises to the neighborhood of one quarter megawatt. Thank you but I will personally stand at a safe distance from any machine delivering those kinds of power levels.

    The amount of power loss in wiring grows as the square of the current, which is to say the inverse square of the charging time. Power loss drives temperature rise almost linearly. Safe power levels are limited by wiring insulation, and current ratings. The latter a function of the wire diameter and acceptable temperature rise.

    The amount of total energy loss in wiring for a single charge up cannot be reduced below inverse proportion to the charging time. Under optimal conditions, charge up 10kWh pack in 10 minutes has one half the total energy loss in the wiring as doing the same thing in 5 minutes. real conditions, the losses grow at an even higher rate.

    How will the capital costs associated this EV build-out be recovered from ratepayers?

  • Limits to Fast Charging - Even if the supply power can be increased, most batteries do not accept charge at greater than their charge rate ("1C"), because high charge rate has adverse effect on the discharge capacities of batteries.

  • Safety - 10 minute charges for a 200mile range translates to delivery of approximately a quarter MW. That's not easy, but from a power delivery standpoint perhaps possible. It is still a very dangerous power level. If a safety switch malfunctions, inopportune energizing could take out a pacemaker, or literally slam someone holding the device into the side of the car or other nearby ferrous metal. As dangerous as quarter MW levels are to charge in minutes, charging in seconds would require multi MW levels that I just don't see happening. Industrial electrocutions run about 700 per year. This is in a controlled environment with personnel who are supposed to be trained. Gas stations have trouble enough keeping the credit card readers working. Complex, systems involving high power delivery present very serious and difficult: safety, reliability and cost challenges.

  • Roaming - Vehicle roaming within and across utility regions. Identification of vehicle ID to premise ID for automated billing –Volt owner directly billed for electricity used. Applies in multi family dwelling, public and workplace charging environments –Potential for 3rdparty aggregator.

  • Charging Infrastructure Challenges (roughly in order of priority)
    1. Outreach to Multi-unit Dwellings (Prop. Mangers/Owners + HOAs) (6 months prior to need)
    2. Residential - Single Family Dwellings (options)
    3. Residential – Multi-unit dwellings (implementation of outreach)
    4. Workplace Charging – Organized entities with specific goals
    5. Commercial – Organized entities with specific goals
    6. General Access

  • Battery Exchange Issues
    • Fear, Uncertainly and Doubt. - It's just plain weird to buy a car but lease the most expensive component. Nissan recently announced it would initially not try battery rental strategy in the U.S. with the Leaf, due to negative response to the concept in customer surveys.

      Americans hate renting. Graduating from renting an apartment to buying a home has become enshrined as hallmark of adulthood. And if there's one thing we hate more than renting, it's sharing stuff with strangers. Who had this battery before me? Is that smoke coming from the hood? The first time someone gets in a bad accident or the car conks, watch them blame it on some stranger's battery. How will this impact the resale price of the car? What if Better Place goes out of business? Is this like getting a car from Hertz? You might pay more money and feel cheap at the same time.

    • Battery Removal - The battery pack for an average passenger car will weigh 250 to 300kg. To provide good weight distribution and thus safe handling of the car, the battery pack could be specifically designed for that vehicle and therefore integrated into the structure. If this were the case then to change the battery pack will be far more time consuming and difficult than those we are used to in our current ICVs, and will require specialized handling equipment.

    • Safety – The electrical connection between the battery and the vehicle carries a very high current, and it is this connection that would need to be made and broken each time the battery is exchanged. At best, it will cause wear and degradation at the key link between the two components, at worst; it has the potential to cause a massive discharge, with all the consequences that might ensue.

    • Inventory Stocking Costs - The battery pack shape and the electrical architecture is likely to be unique to each vehicle, unless standards were introduced; so every exchange station would have to carry a considerable stock of fully charged batteries even to support the most popular vehicle models. This would entail considerable financial outlay, which would have to be paid for by the end user.

    • Hostility from Car Makers - The battery is one-third of the price of an electric car. That means car manufacturers only get to sell two-thirds of a car, leaving them and their dealers less wiggle room for haggling and making a profit. That should really warm car makers up to this. Car manufacturers -- on the whole, a conservative lot -- also worry about safety, warranties and design homogenization.

    • Future Government Support - The only direct federal support for deployment of charging infrastructure, however, was a short-lived ARRA-funded Transportation Electrification Initiative, which provided $400 million to several communities to expand charging infrastructure in 2009.

6. Success Factors
  • Close cooperation between manufacturers, utilities, battery suppliers, the government and consumers.
  • Battery exchange would require a high level of vehicle standardization. The development of charging infrastructure will need to keep pace with the developing market to ensure consumer confidence in the ability to recharge their vehicles with minimal inconvenience.
  • There should be standardization of recharging systems to maximize commonality and minimize development of manufacturer specific systems.
  • On street charging will be necessary to encourage EV and PHEV uptake and regulated asset status for charging points would aid their deployment.
  • Utility Roaming and Service Roaming
    • Regions have multiple electric utilities
    • A smart charging network lets the user have the same experience regardless of what utility’s region they are in
    • An open charging network allows cross-billing and authorization with other smart charging networks
    • Must have the ability to charge any car, subscriber or not
  • A secure, safe, reliable way for consumers to charge their electric vehicles anywhere they park
  • The ability to transition from gasoline tax revenues to tax models appropriate to electric vehicles
  • Leverage existing recreational vehicles access to grid power already available at over 16,000 RV parks nationwide
    • Safe, simple, reliable hookups
    • Up to 12 kW at each hookup
    • More RVs than FFVs + NGVs
    • Over 30 million people with RV experience
    • Standard approved hardware • 120V/240V • 50A rating typical • GFCI at newer parks

6. Next Steps
  • Estimates are that 80 percent to 85 percent of charges will occur at home. As a result, a substantial portion of the charging market will likely revolve around hardware sale.
  • Should there be a statewide EV rate?
  • How can EV prices be made simple and clear for all customers? Should EV load be separate from the household load (and the block/tiered pricing schemes in place)?
  • Will a separate meter be required?
  • Can a foundation for the vehicle-to-grid concept be put in place right from the beginning?
  • Reseach & Development

    • Vehicle Metering and Applications
    • Market/Rate Structures
    • Settlement Process
  • Installation is a lot cheaper if you plan for it. Parking spots should be provisioned with conduit at least
  • Wide acceptance of plug-in cars demands a public charging network
  • Plan for a large scale deployment
  • Building codes should be modified to promote GEV adoption

8. Case Studies

  1. Ecotality is in the middle of deploying the EV Project, of which the DOE is funding half of its $230 million price with the other half coming from private investors.   On August 5, 2009, The Electric Transportation Engineering Corp. Ecotality,was awarded $99.8 million by the DOE to set up a car charging network with 12,750 charging systems in Portland and three other Oregon cities, three cities in Tennessee, and in Seattle, San Diego, Phoenix and Tucson. In June 2010, the Project was granted an additional $15 million by the U.S. Department of Energy.  There will be 400 DC chargers installed by ECOtality as part of the EV Project.

    ECOtality is deploying chargers in major cities and metropolitan areas across the United States. Chevrolet Volt and the Nissan LEAF are partners in The EV Project and drivers who qualify to participate receive a residential charger at no cost. In addition, most, if not all of the installation cost, are paid for by The EV Project.
    EV Project Locations August 2012



    The EV Project collects and analyzes data to characterize vehicle use in diverse topographic and climatic conditions, evaluates the effectiveness of charge infrastructure, and conducts trials of various revenue systems for commercial and public charge infrastructures. The ultimate goal of The EV Project is to take the lessons learned from the deployment of the first thousands of EVs, and the charging infrastructure supporting them, to enable the streamlined deployment of the next generation of EVs to come.

    The EV Project has qualified LEAF and Volt customers for participation based upon home electrical power capabilities. Because a significant amount of vehicle charging takes place at EV driver residences, a portion of The EV Project funding supports home charging units, or more correctly called "Electric Vehicle Supply Equipment" (EVSE). In exchange for allowing the collection of vehicle and charge information, participants receive a Blink wall mount charger at not cost, and in select locations, up to a $1200 credit toward the installation. This information includes data from both the vehicle and the EVSE, including energy used and time and duration of charger use.

  2. Walgreens is planning to install 800 electric vehicle chargers by the end of 2012. They've already learned it doesn’t have to be flashy, because people are using charge station finders in their car or on their smart phone – rather than driving around aimlessly looking for signs that say “charge here.” Second, it doesn’t have to be right next to the door, but it also gets expensive if it’s too far away from the electrical room. Lastly, 480-volt DC charging is the way to go – if you can get it. There are hundreds of DC chargers coming online in the next six months to a year.

    Walgreens first got interested in offering electric vehicle charging when it was approached by NRG Energy to be a partner in its Freedom Charging Network in Texas. Earlier this year, NRG Energy announced it would install 70 stations in the Dallas/Fort Worth area and another 50 in Houston. (Only a fraction of those will be at Walgreens locations.) With a go big or go home attitude, Walgreens decided this was one way to set itself apart. “We realized the value from a competitive standpoint to be the first mover,” said Menno Enters, director of energy and sustainability at Walgreens.

    Although Walgreens is enthusiastic about DC charging, it is installing only about 150 nationwide because of physical limitations – but not financial ones. “We wanted to maximize DC charging,” said Enters, “but our power infrastructure is not set up to have DC charging.”

    Even if the bulk of the chargers are level 2, Enters said those could still offer a top off, even if it's not a fill up. Also, as more utilities get on board, there could be upgrades down the road to allow for more DC stations. Enters said that when they started calling utilities about electric vehicle charging, few were interested, and now they’re calling back asking to have Walgreens participate in EV charging pilots. Walgreens does not have the liberty of picking up its stores and moving them to a spot where DC charging would be ideal.

    Eight hundred chargers make Walgreens by far the current leader, and if they hit their target of 20 percent being DC chargers, they will also be a retail leader in fast charging. But others could be close behind. “Since they stepped into the space, we are getting a tremendous number of inquiries about installation at other retailers.” Said Gerzancyh. Walgreens said it is also hearing rumors of others following in its footsteps.

    To keep up with demand, 350Green just placed an order for 900 level 3 DC fast chargers from Efacec with 145 being delivered this year. Walgreens is working with 350Green and is assessing other charging companies in each locality for the rollout. There are no immediate plans to expand beyond the initial 800 chargers in 2012, but rather take a watch and wait approach as more EVs take to the road. “We have set out the bait and now we have to wait for the fish to bite,” said Enters. “We’ve had district managers ask about getting one, maybe dozens, cause people are asking if we’ll have charging if they get an electric car.”

9. Companies Global sales of electric car charging stations was just $69 million in 2010, but analysts predict the EV charging industry to swell to $1.1 billion by 2013 — and even though they won’t have any plug-in vehicles ready until 2012, the world’s largest automaker wants a piece of it. Toyota and a growing number of electrical heavyweights including Siemens and GE are jumping into an industry of many small and medium-sized companies. And because of the sheer size, brand recognition and distribution networks that these new players bring to the table, the cottage industry surrounding electric car chargers is abut to get a serious shock to its system.
  1. 350Green - Founded in Washington, DC in June 2008, and now headquartered in San Diego, CA - A developer of wide scale electric vehicle charging networks in major cities in the United States and around the world. Expertise is in site selection, engineering, construction and marketing for the Plug-in Electric Vehicle charging infrastructure, having been an initial partner in The EV Project, a $230 million private public-partnership for the installation of charging stations in US cities. Currently working on a roll out of the EV infrastructure in several major U.S. cities.

    In addition to work on infrastructure planning, owns and operates the network as well as the relationship with the customers. The system provides monthly access to the entire network of the charging stations, conveniently located in public areas, parking lots, garages and other locations easily accessible to drivers.

    350Green, one of Walgreen’s partners for installing the chargers, also just announced s separate project for 73 fast chargers in the Chicago area. Mariana Gerzancyh, CEO and co-founder of 350Green said her company has not had constraints for DC charging but that’s because 350Green is coordinating with local utilities from the start to identify a suitable location for the stations.

  2. ABB, a large power and automation equipment conglomerate, announced in July 2011 that it has acquired Dutch EV charging company Epyon Power. Epyon, a spin-off of Delft University of Technology, provides DC charging stations and supporting network software. One of Epyon’s electric charging patent applications ’048 Application “Electric charger for an accumulator or battery” is directed to an electric charger for rapid charging.  ABB also invested $10 million into Ecotality in January 2011.

    In May 2012, ABB entered the US market for electric vehicle charging solutions with the launch of its best-selling Terra 51 direct current (DC) charger, marking the start of a infrastructure rollout that will drive the adoption of electric mobility. The Terra 51 will be manufactured in New Berlin, Wisconsin and is available for delivery in the second half of 2012.

    The Terra 51 is an intelligent DC fast charger that reduces electric vehicle charging times from eight hours, using regular alternating current (AC), to as little as 15 to 30 minutes. The Terra 51 was initially launched in Europe in 2010 as the region’s first commercially available DC charging station and is well established as the leading fast charger in terms of installed base, reliability and functionality.

  3. Aerovironment , Monrovia, CA- As the leading supplier of fast charge systems for industrial electric vehicles (EVs), AV has applied its unmatched battery and charge system expertise to improve electric and hybrid electric vehicle productivity and performance.

  4. Clipper Creek - Auburn, CA - The first on the market with high-rate charge stations that is compatible with all major automakers' Plug-In Hybrid and Electric Vehicles.

  5. Columb Technology (cool-ohm), Campbell, CA - The Leader in Networked EV Charging Infrastructure. Coulomb Technologies provides a map of charging station locations in the USA. Even though it doesn’t cover all available stations, it’s a step in the right direction. It would be nice to see all stations worldwide on Google Maps, giving information about the supplier, availability of electricity and charging characteristics.

    In May 2012, Coulomb completed $47.5 million in Series D financing. Braemar Energy Ventures and Kleiner Perkins Caufield & Byers led the financing and were joined by Toyota Tsusho Corporation and existing investor Rho Ventures. Existing investors including Voyager Capital, Siemens Venture Capital GmbH, Harbor Pacific Capital Partners and Hartford Ventures also participated. The financing will enable Coulomb to expand its operations and further grow the ChargePoint(R) Network, the largest network of independently owned charging stations in the world, and expand the deployment of its next generation cloud-based charging solutions for electric vehicles. Additionally, Coulomb will expand its position in both existing and new markets. Scott DePasquale from Braemar and Michael Linse from Kleiner Perkins have joined Coulomb's Board of Directors.

  6. Eaton Corporation,  Cleveland, Ohio, a diversified power management company with 2010 sales of $13.7 billion, has teamed with Murphy Oil USA to establish a series of DC fast charging stations at select retail fuel outlets across the U.S. The collaboration, which previously involved one test location at a Murphy Oil outlet in Tennessee, builds on the success of that project.  Murphy Oil, which operates more than 1,000 fueling stations in 21 states, sees added value in serving the burgeoning electric vehicle sector with DC fast charging stations. In addition, their co-location at many Walmart stores provides increased exposure for the new technology.

    The display on Eaton's Vacaville rapid charger shows that the i-MiEV's batteries were charged to 8.8 kilowatt-hours in just six minutes and 26 seconds.
    Eaton is currently the only DC fast charging station manufacturer in the U.S. that has a product that is already available for installation. In fact, their fast charging equipment was used in the country's first publicly accessible DC fast charging outlet in Vacaville, CA.

  7. Ecotality (NASDAQ: ETCY) San Francisco, CA - Ecotality hopes to generate revenue from four sources: hardware and equipment sales, monthly subscription fees from consumers and fleet owners, advertising at the charging stations, and grid services to utilities.

    Subscription fees at the most basic level to Ecotality's Blink Network  act as an insurance policy. For $5 to $10 a month, Ecotality subscribers will be able to reserve time at public chargers, get text messages about the state of the charge in their car, and get maps and directions to chargers. A social network for Ecotality customers will let them trade tips and advice on EVs. Subscriptions do not include home electricity and won't likely include power at public chargers at the most basic levels. Utility services will mostly revolve around ensuring that home charging occurs at night. Ecotality will receive fees for managing and timing home charging. Programs -- such as giving consumers large discounts (3 cents per kilowatt hour) if they comply with managed charging programs -- might get funneled through car charging service networks.


    Ecotality has struggled to make a profit, posting a $22.5 million loss in 2011 and a $16.4 million loss in 2010. The company did post a $1.2 million profit in the first quarter of 2012 and has been receiving investment and licensing deals with ABB Technology Ventures, a European firm looking to bring the company’s Blink charging system to that continent.

    ECOtality has been coming under attack for its use of federal funds to build out its cross-country charging network. A congressional panel is looking into the company’s grants, and the SEC is investigating  the company’s recent financial dealings. Republican presidential candidate Mitt Romney has attacked ECOtality’s federal funding in an ad connecting it and thin-film solar leader First Solar to Solyndra

  8. Ecotality North America- Phoenix, AZ - formerly Electric Transportation Engineering Corporation (eTec), a subsidiary of ECOtality(NASDAQ:ECTY), and is a recognized leader in the research, development and testing of advanced transportation and energy systems. Manufactures the Minit-Charger line of fast-charge systems for airport ground support equipment, material handling equipment, transit vehicles (buses) and light duty passenger cars. One of the oldest electric vehicle charging equipment manufacturers (10 years) It has installed more than 5,500 charging stations for on-road electric vehicles, material handling, airline, marine and transit applications., eTec has installed more charging stations for on-road applications (400) than any other company in the world.

    Announced in March 2010 that its Chinese partner, Shenzhen Goch Investment, landed a $1.5 billion credit line, and that Shenzen Goch has committed $300 million of that credit line to finance sales of ECOtality’s electric vehicle (EV) charging systems to utilities, governments, and commercial and retail clients around the world. The credit line, offered by the China Construction Bank, will allow ECOtality to finance vehicle charging projects for its customers and reduce the upfront capital they otherwise would have needed to invest to get the projects moving.

  9. eVgo (pronounced ee-vee-go) - Houston, TX - The first U.S. commercial chain of charging stations, It is set to announce that it will have a total of 60 electric-vehicle charging stations in place by Labor Day 2011. It is owned by NRG EV Services, a subsidiary of NRG Energy, one of the largest electricity providers in Texas. So far, eVgo has said it plans to offer a subscription service through which customers get unlimited access to its stations for a set monthly fee, and it is developing a smartphone app that will alert users to nearby charging stations.

    The eVgo network will consist of two types of charging stations: 480-volt DC rapid chargers, which take about 30 minutes to recharge an electric vehicle, and 240-volt Level 2 chargers, which take about four hours to recharge a vehicle.

    The eVgo "Freedom Stations" will be open 24 hours a day, and offer both types of chargers. Twenty-five of those will be open in the Dallas/Fort Worth area, and 35 in the Houston area by Labor Day. A total of 70 will be in place in the Dallas/Fort Worth Area and 50 in the Houston area by 2012, according to NRG.

    Customers of eVgo pay a flat monthly fee of $49 to $89, which can allow access to charging stations both at home and on the road. For the higher levels of membership, customers can get free power from their home chargers during off-peak hours.

    In May 2012, ECOtality filed a lawsuit asking a California court to block a proposed settlement between NRG and the state that would see about 200 public chargers and some 10,000 charging systems built in the state. While NRG says the $100 million investment is a fair way to discharge a $1 billion overcharging infraction committed by a company it acquired, ECOtality calls it a backdoor way to monopolize the market.

  10. GE Wattstation - A version of the GE WattStation a Level 2 (240V) device designed for home use --launched in April 2012.

     GE has partnered with ServiceMagic, a leading website connecting consumers with service professionals, to provide a network of certified electricians for reliable installation of the electric vehicle charger in the home. GE Capital, working with ServiceMagic, will provide financing options to qualified customers, enabling customers to pay for the charger and installation costs over time. The wall-mounted device, costs about $1,000 plus installation.

    WattStations will rely on PayPal as the exclusive payment provider. PayPal will be embedded in the WattStation Connect mobile app, available now for iOS and Android, and will also soon power an RFID payment card.  WattStation Connect app users will be able to find nearby WattStations through the app, get directions and check the availability of the station. To pay, they will scan a QR code on the machine to identify the WattStation and pull up pricing information. Then they’ll select how they want to pay, either by a flat rate or pay as you charge. Users will complete their transaction through PayPal and can begin charging.
    Wall Mount GE Watt Station for Residential Use

  11. IdelAire, Knoxville, TN - Allows drivers to shut off their engines by providing heating and cooling wherever long-haul trucks congregate and idle. The only "retrofit" is a $10 window adapter for the truck.

  12. NRG Energy  - Princeton, NJ b- NRG Energy is obligated by a legal settlement to invest $100 million in battery electric vehicle (BEV) charging infrastructure in California.  According to NRG Energy, these investments resolve “all outstanding claims and disputes” pertaining to litigation between Dynegy, bought by NRG Energy in 2006, and the state, represented by the California Public Utilities Commission (CPUC), over unsatisfactorily fulfilled electricity contracts during the 2000-01 energy crisis.

    Investments will includeL
    1. A $50.5 million investment in 200 eVgo Freedom Station sites installed at  commercial and retail locations, each with a level-three DC fast charger as well as a level-two medium-speed charger The eVgo Freedom Stations’ level-three DC fast chargers, each capable of putting a 50 percent charge on a fully electric vehicle in fifteen minutes, will constitute the U.S.’ biggest fast-charger network. The focus of the effort will be in the areas of Los Angeles (110 stations), San Francisco (55), San Joaquin Valley (15) and San Diego County (20), where BEV interest is expected to be highest. NRG Energy will locate at least 20 percent of them in urban areas where they will be more accessible to low- and moderate income groups

      The stations will be owned and operated by NRG Energy and be much like theAeroVironment-built stations in NRG’s Houston charger network. They will be credit- and debit-card accessible. Plug-in vehicle drivers will have both pay-as-you-go and subscription access. Pay-as-you-go prices will be no more than $15 per charge during peak demand periods and $10 per charge during off-peak hours.

    2. A $40 million investment in 10,000 make-ready electrical installations, upgraded to 30 amp-capable and prepared for either a level-one or level-two charger installation to be completed within 24 hours to 48 hours

    3. A $9 million investment in advanced BEV charging technology and BEV car sharing programs. The investment will move the technology forward and expose more people to it. A total of $5 million will go to develop battery storage for peak demand periods, very high power charging capability, or for vehicle-to-grid pilot programs. The other $4 million will go to EV car sharing programs and job training programs in the charger infrastructure field.

  13. Project Better Place, Palo Alto, CA, Israel , Denmark, Australia, Hawaii, Canada - To ensure that we can confidently drive an EV anytime, anywhere, Better Place is developing and deploying EV driver services, systems and infrastructure. Subscribers and guests will have access to a network of charge spots, switch stations and systems which optimize the driving experience and minimize environmental impact and cost.

    In early 2010 Better Place announced a $350-million Round B led by HSBC Group -- 1.85 billion kroner and 1.305 billion shekels, to be exact. It ranks as one of the largest cleantech deals in history, with a pre-money valuation of $900 million.

    It is creating a market-based transportation infrastructure that supports electric vehicles, providing consumers with a cleaner, sustainable, personal transportation alternative. The main obstacle to the mass adoption of electric cars is driving range and costly batteries. Better Place eliminates these barriers through the use of swappable batteries to extend the range of the car and by owning the batteries directly so the driver doesn’t have to. With an infrastructure of battery charging spots and battery exchange stations, drivers experience the feeling of infinite range at a cost less than the cost of driving an internal combustion engine (ICE) car.

    CEO Shai Agassi comes from enterprise software giant SAP and is one of the industry poster boys for IT execs hoping to make a splash in the greentech world.

  14. Schneider Electric , a €19 billion French company and a world leader in active energy management solutions, launched its own residential charger EVlink™ in February 2011 that includes a delayed charging option and an LED display.

    On May 7, 2012, Schneider announced U.S. availability of its new EVlink DC Quick Charger for EVs. Schneider says users can charge 80% of their EV battery in less than 30 minutes using the charger.

  15. Siemens In February 20111, Siemens announced it is launching a charging point Charge CP700A on the European market which can charge electric cars with a normal battery capacity within an hour. The charging power has been doubled to 22 kW in the new series, which cuts the charging time in half.

  16. ShorePower (formerly ShurePower) Rome, NY - Currently deploying Electrified Parking Spaces (EPS) across North America. Shorepower provides EPS for Truck Stop Electrification (TSE) as well as electric vehicles and plug-in hybrid electric vehicles. Shorepower TSE allows truck drivers to turn off their engines and plug into all weather electrical and communication outlets during mandatory rest periods. This reduces fuel costs, toxic exhaust emissions, maintenance costs and provides a better night's rest.

  17. Toyota Motor Corp will launch home battery chargers for electric and plug-in hybrid cars in 2012 as it starts selling new models of environmentally friendly cars, the Nikkei business daily reported in February 2011. The chargers, which will be compatible with non-Toyota cars, will come in two types, the Nikkei reported, citing company sources. One would extend from the exterior wall of a home and the other would be for setting up in a garage. The company expects to sell 20,000 to 30,000 units in the first year, with each costing about several tens of thousands of yen to 200,000 yen ($2,405) including installation costs, the Nikkei added.

9. Links
  1. Clean Techies - Tag: Charging Stations 
  2. Electric Transportation Applications - Urban Electric Vehicle (UEV) Technical Specifications – Effective January 1, 2003
  3. e-mobility Berlin was formed last year by two German industry giants, utility RWE and car manufacturer Daimler. Daimler plans to provide and service 100 Mercedes and Smart electric cars until the end of 2009, while RWE is handling the development of infrastructure and operation of the 500 charging stations. Daimler has been testing 100 Smart electric cars in London since 2007.
  4. Austrian Mobile Power platform was formed in July by six major Austrian companies, lead by national utility company Verbund. The companies agreed upon an initial joint investment of 50 million EUR and aim to bring 100,000 electric vehicles to Austrian roads by 2020. A test fleet of 100 cars will be starting as early as 2010, and it will be increased up to 1,000 EVs by 2013.http://www.sgiclearinghouse.org/standards?q=node/1905&lb=1

Wednesday, October 22, 2014

Markets and Pricing


If consumers are willing to accept more variability in price, they can get a discount from a flat base rate because the cost of delivering service goes down





J. California Net Metering 
wednesday, october 22, 2014 
The solar industry and the state’s utilities disagree over just what impact net metering has on electricity rates, utility costs and grid operations.



I. Community Solar
TUESDAY, August 19, 2014
“What if everyone, absolutely everyone, could own their own solar panels?”

Under Development




H. Texas Retail Electricity Market 
TUESDAY, APRIL 1, 2014
Electricity deregulation allows multiple companies to compete for business in an electric market, but some argue that the system implemented in Texas in 2002 has led to higher prices for consumers.



WEDNESDAY, OCTOBER 2, 2013
Smart meters don't offer much value to consumers unless coupled with dynamic pricing, California PUC is currently researching whether or not to replace tiered rates.


F. Community Choice Aggregation
THURSDAY, AUGUST 16, 2012
Procures renewable sources of electricity and partners with a utility to distribute energy to local communities, You get all the advantages of cleaner, greener, healthier energy consumption AND all of the advantages of the established, experienced energy provider.


E. Wholesale Electricity Markets
sunday, august 5, 2012
Once generated, electricity must be able to instantaneously find an end use. The precise balancing act between creating electricity and getting it to the end user requires the ultimate just-in-time market.

Regulatory market to create competition can also hamper smart grid development. The rules force separation of supply, wholesale transmission, and retail distribution functions. But all those areas need to coordinate to optimize smart grid planning and data usage.



MONDAY, APRIL 16, 2012
Obligates utilities to buy renewable electricity at above-market rates set by the government.



monday, October 31, 2011
How will frequency regulation and load management be monetized?



MondaY, june 11, 2011
Experience in the introduction of retail competition has been mixed

TUESDAY, MARCH 22, 2011
By breaking the link between the utility's sales and profits, decoupling creates an incentive for utilities to sell less energy and focus on energy efficiency.






California Net Metering Debate

August 2014 - Added Def. Value of Solar
October 2014 - Added link to LBL Study Financial Impacts of Net-Metered PV on Utilities and Ratepayers: A Scoping Study of Two Prototypical U.S. Utilities

The solar industry and the state’s utilities disagree over just what impact net metering has on electricity rates, utility costs and grid operations.




Navigate this Report
Back to Markets & Pricing Index
1. Background

2. Acronyms/Definitions
3. Business Case
4. Benefits
5. Risks/Issues
6. Success Criteria
7. Next Steps
8. Companies/Organizations
9. Links

1.Background
  • AB-327the controversial California bill that tackles residential electricity rate reform and solar net metering policy in one fell swoop, was approved by the state Senate on Sep 9, 2013 and the Senate revisions passed the Assembly on Sep 12.   Gov. Jerry Brown has indicated his support.

  • Utilities have long argued that net metering doesn’t adequately compensate them for the costs they face in supplying solar-equipped customers with grid power while the sun isn’t shining. Too many net-metered customers could force utilities to raise rates on all non-solar customers, and eventually lead to a death spiral for utilities that end up paying out more than they’re taking in from their customer base. They argue that poor rate payers who cannot afford solar end up subsidizing rich home owners who have the capital to invest in roof top systems.

  • Solar advocates, by contrast, point to studies that show that net metering of distributed solar power is a net asset, rather than a liability, to the grid at large. Those benefits can stretch from lowering the average cost of electricity for all users, to helping meet the state’s aggressive goals to supply more and more of its power from renewable resources in the coming years.

  • Under current California low, Net Energy Metering (NEM) allows solar owners to roll their meters backward for every kilowatt-hour they send to the grid (up to the point where their bills zero out). The return they get on the electricity they generate is the same retail rate they pay for what they consume. Since the top electricity tiers are very expensive, solar can be very competitive.

  • NEM for California's IOU's is currently capped at 5%. Utilities and the CPUC have disagreed how the 5% should be calculated.

  • The California Solar Initiative was structured when it was launched in 2007 as a ten-step incentive program, and we are now at step ten. There is not another incentive program that will replace that.


2. Acronyms/Definitions

  1. ABx 1 - During the energy crisis, the Legislature passed ABx1 (Keeley, 2001) to protect California ratepayers from rampant price fluctuations due to a dysfunctional wholesale electricity market. ABx1 1 authorized the Department of Water Resources (DWR) to issue revenue bonds to purchase power at such prices the department deemed appropriate, on behalf of the cash-strapped investor-owned utilities (IOUs) which couldn't keep up with the volatile wholesale prices. Among other stabilizing efforts, ABx1 1 included a provision that prohibited the CPUC from increasing rates for usage under 130% of baseline(tiers 1 and 2) until DWR bond charges were paid off. Those charges continue.

    Because rates in the two lowest tiers were frozen, increased costs for generation, distribution, transmission and new programs created by the Legislature and the CPUC, have been disproportionately borne by those customers whose electricity usage falls in the upper tiers.

  2. SB 695 - In 2009 SB 695 (Kehoe) was signed into law as an urgency statute. Among its provisions, the bill removed the freeze on tier 1 and tier 2 rates and intended to allow for gradual rate increases through 2018 at which time the caps for those increases would sunset. Different formulas were created for Non-CARE customers and CARE enrollees.

    As a consequence, beginning Jan 1, 2010, the CPUC could grant increases in rates charged to non-CARE residential customers for tier 1 and 2 rates by the annual percentage change in the Consumer Price Index from the prior year plus one percent, but not less than three percent or more than five percent per year. Increases in tier 1 and 2 rates for the residential CARE program were statutorily tied to annual cost of living adjustments for CalWork's benefits not to exceed three percent per year. The IOUs were also permitted to add a third tier of rates for CARE enrollees. Prior to SB 695, CARE enrollees were subject to charges under only the first two rate tiers.

    The provisions of SB 695 resulted in three to five percent increases on tier 1 and 2 rates for non-CARE customers and resulted in a commensurate decrease in rates for tiers 3, 4, and 5. The rates for CARE enrollees in tiers 1 and 2 have not increased due to the suspension of COLAs for the CalWork's program, except for the addition of a third tier for CARE enrollees in the PG&E service territory. The rate adjustments, overall, were revenue neutral to the IOUs.

    In PG&E service territory the gap between tier 1 and tier 5 decreased by 17 cents, but tier 5 was still 2.65 times higher and 21.88 cents per KWh more.

  3. Rate History Since SB 695
    PG&ETier 1 Tier 2Tier 3Tier 4Tier 5CARE1CARE2CARE3
    Mar-1011.8813.5028.5642.4849.788.329.569.56
    Jan-1112.2313.9128.0138.9838.988.329.569.56
    Jan-1212.8514.6029.5233.5233.528.329.5612.47
    May-1313.2315.0431.1135.1135.118.329.5613.97
    .
    SCETier 1 Tier 2Tier 3Tier 4Tier 5CARE1CARE2CARE3
    Jan-1012.1614.1520.8224.3227.828.5310.6716.04
    Jan-1112.3514.3423.8027.3030.808.5310.6718.24
    Jan-1212.6015.5123.8027.3030.808.5310.6718.17
    Jan-1312.8515.9827.2231.2231.228.5310.6720.76
    . In the SDG&E rates which took effect on Sep 1 2013, the rates for tiers 3 and 4 increased more than 20% going to more than $0.34 per kWh in tier 3 and $0.36 in tier 4. A recent notice to customers from SDG&E's president reported the expected impacts - if a bill is now $250, then it will increase to $325 in September. A $100 electric bill will rise to $115. .

    SDG&E
    Tier 1 Tier 2Tier 3Tier 4CARE1CARE2CARE4CARE4
    Mar-1013.4115.4927.1629.1610.0511.7117.0817.08
    Jan-1113.8115.9528.1530.159.9611.6216.9916.99
    Jan-1214.3316.5824.8326.839.9511.6116.9816.98
    Jan-1314.7617.0824.5028.509.9511.6116.9716.97
    Sep-1314.7617.0834.6736.379.9511.6116.9716.97
    .
  4. SB 743 (Steinberg/Padilla) - modifies the index to which CARE enrollee rate increases are tied to strike CalWorks and add the Consumer Price Index.

    The rates for CARE customers in tiers 1 and 2 have not increased due to the suspension of COLAs for the CalWorks program. Consequently, assistance to CARE customers is far greater than intended.

    On Sep 12, the energy provisions were deleted and the bill was changed to streamline CEQA for a new downtown Sacramento sports arena.   Status: Passed Senate and Assemby Sep 12, 2013,

  5. AB 1755 (Perea, 2012) - authorized the CPUC to approve a fixed charge for residential customers beyond the statutory caps on rate increases for Tier 1 and Tier 2 customers. Status: Senate Floor Inactive File.

  6. CARE - California Alternate Rates for Energy - Program to discount rates for low-income gas and electric customers defined as those with incomes no greater than 200% of the federal poverty level and permits no more than three rate tiers.

    Currently, CARE customers are to receive a 20% discount off of their electric and gas bills. However, because of the cap on Tiers 1 and 2, the effective discount can be much higher if CARE customer is using more than 130% of the baseline allocation. In some instances, Pacific Gas and Electric (PG&E) has reported providing discounts in the range of 60% off of the otherwise applicable bill. (See IOU Charts below)

  7. Cross Subsidies - Recovering costs incurred by one group of customers from another group of customers. For example, California has an explicit policy to shift the cost of the CARE program discounts to all non-CARE customers

  8. Economic Efficiency - Obtaining maximum consumer satisfaction from available resources. In the rate design context, economic efficiency is achieved when pricing reflects the marginal cost of generating and delivering electricity, including externalities.

  9. Externality - A cost or benefit that is not included in the market price of a good because it's not included in the supply price or the demand price. Pollution is an example of an externality cost if producers aren't the ones who suffer from pollution damages. Externality is one type of market failure that causes inefficiency.

  10. Fixed Charges - In the spring of 2010 PG&E, as part of its triennial rate case, PG&E applied to the CPUC to establish a fixed customer charge of $3 for all non-CARE residential customers, and $2.40 for all CARE enrollees. Although the CPUC recognized a growing disparity in rates, they rejected the charge on legal and policy grounds and characterized it as "the most significant change in residential electric rate design in the last decade."

    Legally the CPUC opined that the statutory caps on rate increases for tier 1 and 2 residential customers included any new or increased fixed rate charges. They specifically found that the commission was "prohibited by law from approving PG&E's customer charge to the extent the total bill impacts exceed these statutory limitations on baseline rate increases.".

    Sacramento Municipal Utility District imposed, for the first time, a fixed charge of $10 per residential customer in 2012, which was increased to $12 this year, and there are plans increase the charge $2 per year for 3 to 4 years. Why the tool is critical now is not readily apparent; the costs of electric service now labeled as "fixed" are not new. The IOUs argue that the lack of a fixed charge has caused high usage customers to pay unfairly high bills and created an artificially attractive market for customer-owned generation because the highest tier rates are far in excess of cost. A fixed charge would bring down upper tier rates but the lack of a fixed charge didn't exacerbate the upper tier rates, the rate freeze on tier 1 and 2 customers is largely to blame.

  11. GRC - General Rate Case - Proceedings currently take place every three years before the CPUC. The GRC will set the base revenue requirements for electric/gas operations. These base revenues recover the utility's operation and maintenance expenses, depreciation, and taxes and provide a return on invested capital.

  12. Market Rate Net Metering - The user's energy use is priced dynamically according to some function of wholesale electric prices. The users' meters are programmed remotely to calculate the value and are read remotely. Net metering applies such variable pricing to excess power produced by a qualifying systems.

    Market rate metering systems were implemented in California starting in 2006, and under the terms of California's net metering rules will be applicable to qualifying photovoltaic and wind systems. Under California law the payback for surplus electricity sent to the grid must be equal to the (variable, in this case) price charged at that time.

  13. Marginal Cost - The cost of providing one additional unit of a good or service. In the electric utility context there are several types of marginal costs – energy, generation capacity, transmission capacity, and distribution capacity. The change in utility costs resulting from an additional customer or additional use of energy or capacity, or the change in costs related to a change in output. The CPUC uses marginal costs in allocating the utility’s revenue requirement to customer classes, and as reference points in rate design. In the California ratemaking context, short-run marginal costs would reflect current market conditions (e.g., over- or under- capacity situations), while long-run marginal costs would include the entire cost of new facilities.

  14. NEM - Net Energy Metering - An electricity policy for consumers who own renewable energy facilities (such as wind power and solar power), and allows them to use generation whenever needed, instead of just when generated.

    The rules vary significantly from place to place: if net metering is available, if and how long you can keep your banked credits, and how much the credits are worth (retail/wholesale). Most net metering laws involve monthly roll over of kWh credits, a small monthly connection fee, require monthly payment of deficits (i.e. normal electric bill), and annual settlement of any residual credit. The treatment of annual excess generation ranges from lost, to compensation at avoided cost, to compensation at retail rate. In California, excess generation is rolled over indefinitely.

    There is considerable confusion between the terms "net metering" and "feed-in tariff". In general there are three types of compensation for local, distributed generation:

    1. Feed-in Tariff (FIT) which is generally above retail, and reduces to retail as the percentage of adopters increases.    See my post -  Feed-in Tariffs (FIT)

    2. Net Metering - which is always at retail, and which is not technically compensation, although it may become compensation if there is excess generation and payments are allowed by the utility. Net metering only requires one meter. A feed-in tariff requires two.

    3. Power Purchase Agreement (PPA) - compensation which is generally below retail, also known as a "Standard Offer Program", and can be above retail, particularly in the case of solar, which tends to be generated close to peak demand.


  15. Net Purchase and Sale - A different method of providing power to the electricity grid that does not offer the price symmetry of net metering, making this system a lot less profitable for home users of small renewable electricity systems.

    Under this arrangement, two uni-directional meters are installed—one records electricity drawn from the grid, and the other records excess electricity generated and fed back into the grid. The user pays retail rate for the electricity they use, and the power provider purchases their excess generation at its avoided cost (wholesale rate). There may be a significant difference between the retail rate the user pays and the power provider's avoided cost.

  16. Rate Cost Components: In California, rates are unbundled into generation, distribution, and transmission components based on key costdrivers for each component.
    • Generation Costs: Costs related to generating power to produce electricity. Typically defined in terms of capacity costs (e.g., $100/kW) and energy costs ($0.08/kWh).

    • Transmission Costs: Costs associated with the transmission system for moving power long-distances or at high voltage, regulated primarily by FERC.

    • Distribution Costs: Costs associated with distributing power to customers (e.g., poles and wires, meters). Typically defined in terms of capacity costs ($/kW) and customer costs ($ per customer)

    • PPC - Public Purpose Charges: Costs associated with a variety of programs, including energy efficiency, demand response, solar and distributed generation, low-income and medical needs


  17. Tier Rates - Residential electric rates in California's IOU territories are generally designed in a four or five-tiered structure based on the customer's quantity of electricity usage. Within prescribed usage tiers, the amount of electricity consumed is priced at increasing per-unit rates. Tier 1 is the customer's "baseline" - the level deemed necessary to supply a significant portion of the reasonable energy needs of the average residential customer; Tier 2 applies to usage between the baseline and 130% of that amount. Baseline levels vary depending on the climate of the region (e.g. hotter regions have a higher baseline).

    This multi-tiered conservation pricing structure grew out of the energy crisis. Prior to that time, a two-tier pricing structure was common.
    PG&E Tier Rate History  Source: TURN

  18. TOU - Time-of-Use Rates - (See my post Dynamic Pricing)  With time-based rates, utilities charge different prices based on the time of day electricity is used. The different charges should reflect the ups and downs of wholesale power prices due to supply and demand. In hot climates, power is typically most expensive late summer afternoons and early evening hours, when heavy air-conditioning use causes spikes in electricity use. With time-of-use or TOU rates, energy charges are higher during the hours of peak demand but lower at all other times.

    This creates financial incentives for consumers to shift energy use to the less expensive off-peak hours, which relieves the strain on energy supplies. However, customers in the hot climates cannot shift air conditioning use to another time of the day like they can their laundry.

    Peak demand dictates the size of generators, transmission lines, transformers and circuit breakers for utilities even if that amount lasts just a few hours a day. Power generation which is able to quickly ramp-up for peak demand often uses more expensive fuels, is less efficient and has higher marginal carbon emissions. Most natural gas plants in California's fleet are older and lack the fast-start technology, consequently they must idle until needed to meet peak demand and in that stand-by mode continue to produce emissions.

    TOU rates are advocated by many environmental groups who argue that the rates help rein in peak demand and avoid building new power plants. Some electric utilities similarly advocate for TOU because the rate reflects the principle of cost-causation and requires customers to make decisions about energy use when it has the highest cost and encourage customers to shift significant amounts of energy use away from the peak hours when power is most costly.

    TOU metering is a significant issue for solar power systems because they produce energy during the daytime peak-price period, and produce little or no power during the night period, when price is low. When this is the case, the effective output of a solar panel is increased, as more electricity can be consumed than is produced.

    • In Nov 2011, the CPUC approved a decision imposing mandatory time-variant pricing programs on small business customers of PG&E in two stages, beginning in November 2012.

    • In Dec 2012, the CPUC approved a decision imposing mandatory time-variant pricing programs on small business customers of SDG&E starting in November 2014, with an optional program commencing in November 2013.
  19. Value of Solar - The basic concept behind value of solar is that utilities should pay a transparent and market-based price for solar energy. The value of solar energy is based on:
    1. Avoiding the purchase of energy from other, polluting sources
    2. Avoiding the need to build additional power plant capacity to meet peak energy needs
    3. Providing energy for decades at a fixed price
    4. Reducing wear and tear on the electric grid, including power lines, substations, and power plants x
  20. Source: Institute for Local Self-Reliance

    Value of solar is not like net metering, where producing energy reduces your electricity bill just like turning off a light. As adopted, Minnesota’s value of solar formula includes all of the basic components of the theoretical policy, however, the overall adopted policy had some good elements that were lost in the legislative process.

    Source: Institute For Local Self-Reliance


3. Business Case
  • Utilities argue: "An electricity bill’s per-kilowatt-hour charge has three primary portions, the generation portion of the charge, the amount for that kilowatt-hour to actually be generated, the transmission portion of the charge, the part you pay for the use, construction, maintenance, etc., of the transmission line between the generation station and the local substation, and the distribution charge that is very similar to the transmission portion but is for the distribution system that actually allows the electricity to be delivered. NEM customers avoid paying non-generation components of rates for the portion of their electricity."

    Instead of NEM, SCE would like a “buy-all/sell-all (BA/SA) model” in which customers pay standard retail rates and get some payment for every kilowatt-hour they produce. BA/SA, however, would reimburse not the retail rate but only the generation portion of the retail rate.

  • Solar advocates argue: "Cost in our electric infrastructure in California is driven by peak demand. There is a huge benefit to reducing peak, and that is what the residential rooftop solar supported by NEM does. There are costs, but there are also benefits, and it works out that it is not really a subsidy.”

    A study on the cost-effectiveness of NEM in the Pacific Gas and Electric (PG&E) service territory by Crossborder Energy that concluded that, “on average over all customer classes, NEM does not impose costs on non-NEM customers,” adding, “on average, over all customer classes, NEM may now be cost-effective throughout the investor-owned utilities’ territories.”

  • SB 327 As Ammended
    1. Requires the California Public Utilities Commission (PUC), when it approves changes to electric service rates charged to residential customers, to determine that the changes are reasonable, including that the changes are necessary in order to ensure that the rates paid by residential customers are fair, equitable, and reflect the costs to serve those customers.

    2. Requires PUC to consider specified principles in approving any changes to electric service rates.

    3. Requires PUC to report to the Legislature its findings and recommendations relating to tiered residential electric service rates in a specified rulemaking by January 31, 2014.

    4. Recasts and revises limitations on electric and natural gas service rates of residential customers, including the rate increase limitations applicable to electric service provided to California Alternate Rates for Energy (CARE) customers.

    The Senate amendments, substantively revise this bill by adding new provisions
    1. Require the IOUs to provide annual distribution plans and for the PUC to approve those plans, if it finds them reasonable, in each IOU General Rate Case.

    2. Revise the current Net Energy Metering (NEM) statute to specify the maximum program capacity for customers in IOU service areas, require the PUC to develop a new NEM program by July 2015 and establish a transition to the new NEM program by 2017. The new NEM program is to be based on electrical system costs and benefits to nonparticipating ratepayers and remove both the total system capacity cap and the one megawatt project size limit. Existing NEM customers will be transitions no later than December 2020 to the new NEM.

      AB 327, as amended, calls for the CPUC to create a new study to serve as the basis for the state’s big three investor-owned utilities to develop brand-new net metering programs by the end of 2015, and instructs them to put those new programs in place in 2017.

      The bill states "There shall be no limitation on the number of new eligible customer-generators entitled to receive service pursuant to the standard contract or tariff after January 1, 2017" This means the current 5% cap for NEM of aggregate consumer demand will be eliminated.

      The three IOUs defined aggregate consumer demand as “coincident” peak demand. Renewables advocates argue that “non-coincident” peak demand should be used.

      Coincident peak demand is the designated period when all sectors (residential, commercial and industrial) reach their maximum electricity consumption and the state’s consumption peaks.

      Non-coincident peak demand is the sum of the individual peaking demands of all customers in the three sectors. Residential peak is typically late afternoon, commercial peak is early mid afternoon, and industrial peak can be at night. That sum of all peaks is greater than the total peak demand at any one time of the day.

      When the installed DG capacity eligible for NEM divided by the peak demand gets to five percent, the utilities are off the hook. So they want that bottom number to be smaller. Renewables advocates want just the opposite because the larger number keeps what one solar advocate called their “backbone” incentive in place.

      In April 2013, the CPUC concluded that the legislature “did not intend ‘aggregate customer peak demand’ to mean coincident peak demand

      Solar and ratepayer advocates were concerned that individual utilities might seek to alter the rates and tariffs that net-metering customers face in ways that could reduce their value. To counter that possibility, the new amendment to AB 327 requires that any such changes take place during a “rulemaking proceeding involving every large electrical corporation.”

      That means that the state’s three IOUS's, PG&E, SCE, and SDG&E, won’t be free to make changes on their own, but will have to collectively seek changes in a major CPUC process

    3. Provide the PUC with authority to require IOUs to procure renewable energy generation above that which is required in the 33% Renewable Portfolio Standard.

    4. Authorize the PUC to approved fixed monthly charges no greater than $10 for residential customers and $5 for low-income customers beginning in 2016. Specify discounts for low-income customers are not to exceed 30% to 35% of the average non-low-income customer.

      AB 327 doesn’t change rates itself. “Rate reform is going to be decided by the CPUC. All that AB 327 does is give the CPUC some more tools in that process.

    5. Establish that by 2018 the default rate schedule for residential customers shall be based on Time of Use and establishes provisions to protect senior or other vulnerable customers, in hot climate zones, from unreasonable hardship.

    6. Add technical amendments to the provisions related to residential electricity rate reform.

  • PUC Residential Rate Design Proceeding (R.12-06-013) is underway. On June 28, 2012, PUC initiated a proceeding to examine current residential electric rate design, including the tier structure in effect for residential customers, the state of time variant and dynamic pricing, potential pathways from tiers to time variant and dynamic pricing, and preferable residential rate design.

    This PUC proceeding is open to the public and allows interested parties opportunities to participate by making comments on PUC rulings, making rate design proposals, commenting on proposals made by others, commenting on proposals made by staff, and commenting on any decision made by PUC. According to the public schedule, final rounds of comments are due mid-summer 2013. This would be followed by a draft decision, which is also open to comments. (See 7. Next Steps and  9. Links below)

4. Benefits
  • Reducing Peak Demand - Solar advocates argue "Cost in our electric infrastructure in California is driven by peak demand. There is a huge benefit to reducing peak, and that is what the residential rooftop solar supported by NEM does. There are costs, but there are also benefits, and it works out that it is not really a subsidy.”

  • Incentives for Conservation & Energy Efficiency - Large fixed charges can undermine customer incentives to reduce consumption and undertake energy efficiency improvements. For example, if you used 500 kilowatt-hours of electricity per month (about average for a California customer) and your rate was 15 cents for each of those kilowatt-hours, it might take two years to recover your investment in new energy efficient lighting.

    But if the utility charged you a $25 fixed charge per month, and reduced your rate to 10 cents per kilowatt hour to compensate, it would now take three years for that same energy efficiency investment to pay back because you cannot avoid that $25 charge and you would have to save 50 percent more kilowatt hours to recover your investment. Similar impacts would occur for consumers considering the installation of rooftop solar.

    (Note: AB327 permits fixed charges, but does not require them,

  • Reduced GHG - SB 327 makes it clear NEM will be additive to the state's 33% RPS goal for renewable energy.

5. Risks/Issues
  • Cost Calculation Methodology - Utilities' "all-in cost" is what energy experts call the "avoided cost." An avoided-cost analysis does not consider longer-term impacts. It is very hard for traditional utility people to see rooftop solar as a resource because they do not control it. As a result, they don’t consider it a resource; they think of it as opportunity energy, so they are not willing to consider cumulative impacts.

    In the absence of real data, utilities assume a simplistic binomial distribution of costs and benefits. The straw man is that solar either avoids transmission and distribution costs or it doesn’t, and the conclusion is that since it doesn’t, because PV has to be connected to the grid, therefore all the costs apply to solar and none are avoided.

    Will there will be worst-case days with both high peak demand and high cloud cover? I'd say "no" for a California summer heat wave, but I'm not responsible for maintaining the grid. Maybe a giant wildfire blots out the sun?

    In addition, economics change based on PV penetration. Enough solar on the grid will collapse peak hour demand. That has already happened in Germany. When high peak demand falls then the spread between the wholesale cost of midday power and late night power goes away. The most expensive power will be found just before solar kicks in and right after it goes away. In that potential future case, end-user solar would be sending relatively low value electricity to the grid and taking back more expensive.

  • Stranded Costs -   Utilities argue "An electricity bill’s per-kilowatt-hour charge has three primary portions, the generation portion of the charge, the amount for that kilowatt-hour to actually be generated, the transmission portion of the charge, the part you pay for the use, construction, maintenance, etc., of the transmission line between the generation station and the local substation, and the distribution charge that is very similar to the transmission portion but is for the distribution system that actually allows the electricity to be delivered. NEM customers avoid paying non-generation components of rates for the portion of their electricity."

  • Unfair Upper Tiers  - If a family can't buy or lease solar to shave the tier 3 and 4 electricity rates off of their bill, and if they don't qualify for enrollment in the CARE program, the cost of electricity, particularly in hot climates, can be a tremendous burden.

  • Legislative Rate Making - There is little disagreement between that the indices and freezes on tier 1 and 2 residential rates must be eliminated and that any modification for those rates must be gradual so as to prevent ratepayer shock. But should the Legislature provide a framework for rate design to reflect and protect its priorities? Some argue that restrictions in statute amount to "legislative ratemaking"

  • Equity - Utilities argue the beneficiaries of net metering are relatively rich home owners, while relatively poor rate payers who cannot afford to install solar or do not own their own homes have to support more fixed costs.

  • Time Lag in Net Metering Contracts - Under existing law, net metering would be suspended completely as of 2014, AB 327 removes that suspension. Utilities and the solar industry have been working under a deadline imposed by the CPUC, which would force net metering programs to cease as of the end of 2014. AB 327, as currently amended, would put that worry to rest.

    Under current law, there are no grandfathering protections at all for existing net metering customers. Everything under this is additive. These are all additional protections that nobody had before.

  • Impact on Current Net Metering Contracts - It was feared AB 327 would subject today’s existing net metering contracts to review and potential rewriting, as the CPUC comes up with a new net metering regime. That led some groups to decry the bill as an attempt to undercut their investment in solar.

    The Sep 2013 bill revisions address this concern by setting a deadline of Mar 31, 2014 for the CPUC to set a procedure for how it will deal with “grandfathering” existing net metering contracts into the new program that AB 327 requires it to create. It also states that “Any rules adopted by the commission shall consider a reasonable expected payback period based on the year the customer initially took service under the tariff or contract.”

    While that doesn’t change the fact that existing net metering contracts will be subject to change, it does address the concern that the previous version of the bill was “creating a lag time of uncertainty as the market waited for the new rules.

  • Net Metering Cap - Several years ago, the CPUC extended the cap for net metering from 2.5 percent to 5 percent of each IOU's nameplate capacity, but there’s been a longstanding dispute about how the  cap should be calculated.  Once the total number of customers signed up for net metering exceeded that cap, in terms of their kilowatt contribution to their utility’s total power mix, new customers would have been excluded.

    AB327 removes all legal uncertainty, and makes clear how the cap is calculated. As amended,, it sets clear figures for when each utility will reach that cap. That will either come as of Dec 31, 2016, or at the following capacities, whichever come first: 607 megawatts for SDG&E; 2,240 megawatts for SCE; and 2,409 megawatts for PG&E.

  • Consumer Backlash to TOU Rates - The impacts of TOU rates would be especially felt by inland climates where air conditioning use is the highest and drives peak demand in the state. if not managed well, the imposition of mandatory TOU rates on customers will result in a significant customer revolt. Even with effective notice and education of customers about how to manage TOU rates, the inland regions of California will be hit the hardest due to their reliance on air conditioning during the summer months.

    SMUD announced its TOU rate structure this year but customers will not be switched to TOU until 2018. To ensure that customers have adequate notice and education and to gain customer acceptance, delay default TOU and permit mandatory TOU with bill protection beginning in 2020.


  • Low Income Incentives - Because lower rates tend to encourage greater electricity consumption, should assistance for low-income households be offered as a fixed monthly credit, similar to food stamps, rather than as a rate discount?

6. Success Criteria In 2007 the CPUC adopted principles for rate design and expressed intent to use those as guidance in the Residential Rate Design Proceeding currently underway
  1. Rates should be based on marginal cost;
  2. Rates should be based on cost-causation principles;
  3. Rates should encourage conservation and reduce peak demand;
  4. Rates should provide stability, simplicity and customer choice; 
  5. Rates should encourage economically efficient decision-making.
7. Next Steps
  • The CPUC initiated a rulemaking on policy guidance for rate design in the summer of 2012 (R.12-06-013). They intend to consider how the state's energy policy goals for 2020 are affected by retail rate design and how rate design policies can and should be used to meet long-term climate and energy policy goals in an effort to align rates with policy objectives. More specifically, the proceeding will examine "whether the current tier structure continues to support the underlying statewide-energy goals facilitates the development of customer-friendly technologies, and whether the rates result in inequitable treatment across customers and customer classes."

8. Companies/Organizations
  1. CPUC - California Public Utilities Commission, San Franciso

  2. DRA - Division of Ratepayer Advocates San Francisco - A California state agency whose statutory mission is to obtain the lowest possible rate for service consistent with reliable and safe service levels. In fulfilling this goal, DRA also advocates for customer and environmental protections.

  3. PG&E - Pacific Gas and Electric, San Francisco

  4. SCE - Southern California Edison, Rosemead

  5. SDG&E - San Diego Gas and Electric, San Diego

  6. SMUD - Sacramento Municipal Utility District, Sacramento

  7. TURN - The Utility Reform Network, San Francisco

9. Links
  1. Financial Impacts of Net-Metered PV on Utilities and Ratepayers: A Scoping Study of Two Prototypical U.S. Utilities - Satchwell, Andrew, Andrew D. Mills, Galen L. Barbose,  - Lawrence Berkeley National Lab (LBL) - September 2014  A scoping analysis to quantify the financial impacts of customer-sited PV on utility shareholders and ratepayers and to assess the potential efficacy of various options for mitigating those impacts.The analysis relied on a pro-forma utility financial model that LBL previously developed for the purpose of analyzing utility shareholder and ratepayer impacts of utility-sponsored energy efficiency programs.The findings from this scoping study point towards several high-level policy implications.

    1. First, even at 10% PV penetration levels, which are substantially higher than exist today, the impact of customer-sited PV on average retail rates may be relatively modest (at least from the perspective of all ratepayers, in aggregate. At a minimum, the magnitude of the rate impacts estimated within our analysis suggest that, in many cases, utilities and regulators may have sufficient time to address concerns about the rate impacts of PV in a measured and  deliberate manner.

    2. Second and by comparison, the impacts of customer-sited PV on utility shareholder profitability are potentially much more pronounced, though they are highly dependent upon the specifics of the utility operating and regulatory environment, and therefore warrant utility-specific analysis.

    3. Finally, LBL found that the shareholder (and, to a lesser extent,ratepayer) impacts of customer-sited PV may be mitigated through various “incremental” changes to utility business or regulatory models, though the potential efficacy of those measures varies considerably depending upon both their design and upon the specific utility circumstances. 
    4. Importantly, however, these mitigation strategies entail tradeoffs – either between ratepayers and shareholders or among competing policy objectives – which may ultimately necessitate resolution within the context of broader policy- and rate-making processes, rather than on a stand-alone basis.

    5. Areas for future research include 
      • examining: the relative impacts of customer-sited PV compared to other factors that may impact utility profitability and customer rates;
      •  the combined impacts of customer-sited PV, aggressive energy efficiency, and other demand-side measures;
      •  the rate impacts of customer-sited PV and various mitigation measures specifically on customers without PV and differences among customer classes; 
      • a broader range of mitigation options; 
      • potential strategies for maximizing the avoided costs of customer-sited PV;
      •  continued efforts to improve the methods and data required to develop reliable and actionable estimates of the avoided costs of customer-sited PV.

  2. Minnesota Value of Solar
  3. Free the Grid 2012 - policy guide that grades all 50 states on two key renewable energy programs: net metering and interconnection procedures.

  4. AB-327 Electricity: natural gas: rates: net energy metering: California Renewables Portfolio Standard Program.

  5. DSIRE - The Database of State Incentives for Renewable Energy

  6. DRA's Presentation on Rate Design Basics.

  7. CPUC -  Residential Rate Design Proceeding  (R.12-06-013)

    Aug. 27, 2012, 9:30 a.m. – 4 p.m.: Workshop to Discuss and Refine Preliminary Questions including transitioning to Time Varying and Dynamic Rates for Residential Rate Structure Rulemaking
  8. Dec. 5-6, 2012: Public Workshops on the CPUC's proceeding to Conduct a Comprehensive Examination of Investor Owned Electric Utilities’ Residential Rate Structures (R.12-06-013)
  9.  CPUC Workshop - December 6, 2012 - Retail Rate Reform Proceeding
    [Agenda]
    [Archive Video Part 1] [Send Eclip]
    [Archive Video Part 2] [Send Eclip]
     CPUC Workshop - December 5, 2012 - Retail Rate Reform Proceeding
    [Agenda]
    [Archive Video Part 1] [Send Eclip]
    [Archive Video Part 2] [Send Eclip]

    June 25, 2013Workshop on Time Varying and Dynamic Rates

     CPUC Workshop - June 25, 2013 - Time Varying and Dynamic Rates
    [Agenda]
    [Archive Video Part 1] [Send Eclip]
    [Archive Video Part 2] [Send Eclip]