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Sunday, July 29, 2012

EV Rate Design

California SB 626 requires the CPUC, in consultation with the CEC, CARB, utilities, and the motor vehicle industry,  to develop infrastructure sufficient to overcome any barriers to the widespread deployment and use of plug-in and electric vehicles, and to adopt rules by July 1, 2011, on  infrastructure and policy upgrades necessary for the widespread use of plug-in hybrid and electric vehicles.

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1. Background

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

The Grid Can Handle PEVs . . . But There Are Impacts Source: EPRI

  • Electric transportation can reduce greenhouse gas emissions, improve local air quality, and reduce on oil, but consumers will not adopt electric vehicles without adequate charging infrastructure. There needs to be regulatory clarity to encourage the state's entrepreneurs and investors to develop charging solutions that will satisfy consumer needs and work harmoniously with the electric grid.

  • It is clear that electric vehicle charging could represent a new and substantial increase in load. In addition, if electric vehicle charging occurs during peak periods, electric vehicle charging could lead to greater use of lower efficiency and higher greenhouse gas emission peaking generating units. Electricity rates can provide electric vehicle owners a financial incentive to charge at some times rather than others, e.g., charge when the economic and environmental impacts on the grid are lowest.

  • The benefits of off-peak Electric Vehicle charging are manifold and accrue to the Electric Vehicle owners and non-Electric Vehicle owners alike. Off-peak charging places less strain on the distribution system, avoiding adverse impacts to the electric grid and reducing the need for costly infrastructure upgrades. Concentrating Electric Vehicle charging in off-peak periods will also dampen increases in energy procurement costs resulting from the addition of this new load: not only is energy more expensive during peak periods, but significant levels of on-peak charging could actually increase incremental procurement costs.

  • At the November 18, 2009 CPUC prehearing conference and in comments, parties requested the Commission address issues related to the provision of electric vehicle charging services by entities other than the electrical corporations currently regulated by the Commission as public utilities. Parties described the resolution of these issues as “critical” to bringing private investment to California for electric vehicle charging infrastructure and requested the Commission address these issues as soon as possible.

  • EV Rates Questions - What types of time variant rates should be offered to electric vehicle owners? What characteristics should electric vehicle rate designs have? How should residential electric vehicle rates be designed given the inverted-tier rate structure? For residential customers, should the utility offer whole house time-variant rates for electric vehicle owners, rates that only apply to electric vehicles, or both? What types of rates should apply to stand-alone commercial and public electric vehicle charging? What types of rates should apply when an electric customer offers electric vehicle charging services and has other electricity uses?

  • EV Metering Policy Questions - Metering could occur through the main meter in the residence, an on-car arrangement, through a separate revenue-grade meter serving a dedicated electric vehicle load or through a sub-meter. Separate metering could be important if the Commission implements special electric vehicle rates programs, Smart Grid integration, and other values to be gained through time differentiated tracking. Electric utilities will also need to consider the metering rules contained in the CARB’s Low Carbon Fuel Standard.

    Various meter ownership arrangements are also possible. The meter could be owned by the utility, the vehicle owners, or a third party.

  • Utility Cost Recovery Questions - Should utilities be permitted to make expenditures in residential, commercial and public charging infrastructure? How should a utility recover expenditures on charging infrastructure? Should utility costs be recovered directly from the users of the infrastructure or from the wider body of ratepayers? How should a utility recover costs of distribution system upgrades attributable to electric vehicles? Should utilities seek recovery of expenditures related to electric vehicles through general rate cases or are special applications necessary and appropriate?

2. Acronyms/Definitions
  1. Demand Charge - Electric power use is metered in two ways: on maximum kilowatt use during a given time period (i.e., kW demand typically measured in 15-minute or 30-minute intervals) and on total cumulative consumption in kilowatt hours (kWh). A customer's electric rate is set using a complex process of tracking cost of services and often seeking regulatory approvals.

    Ten 100-watt light bulbs burning for 1 hour consume 1,000 watt-hours or 1 kWh. Note that in both examples, the consumption is 1 kWh, however, look how differently the second situation impacts the utility from a demand perspective. The serving utility must now be prepared to provide ten times as much 'capacity' in response to the "demand" of the 10 light bulbs operating all at once.

    The general theory is that demand charges reflect the utilities' fixed costs of providing a given level of power availability to the customer, and energy charges reflect the variable portion of those costs as the customer actually uses that power availability. In the past, residential energy tariffs did not include a demand charge because most homes have a pretty similar demand profile and the meters capable of measuring both demand and consumption were too expensive to justify having one on every home. Now that smart meters that can record the power use during either a 15- or 30-minute time window, demand charges for residential use are a possibility.

    The peak demand used for billing purposes in any month can be:
    1. Time of Day: Dependent on the time of day (i.e., on-peak {usually during the day} and off-peak {usually at night time periods) and/or the day of the week (e.g., Monday through Friday and separately for weekends): The metering system tracks the highest usage anytime during the month under the appropriate time windows. These pricing schedules are generally referred to as Time of Use (TOU) rates.

    2. Seasonally Differentiated: For example, the demand charge might be higher during the summer than during the winter, or vice versa.

    3. Declining Blocks: This is where the demand charge up to a given level is at one price with the price declining above that level. For example, the demand charge might be $10 per kW up to 10,000 kW demand, and drop to $6 per kW for demands in excess of 10,000 kW.

    4. Interruptible Blocks: The demand charge depends upon whether the customer can reduce electrical demand to a given level if it is notified in advance by the utility. The price reduction often varies with the time of notice (i.e., the discount is higher if shorter notice is given). Some utilities also offer direct load control for air conditioning and water heating equipment, the utility itself can cycle this equipment on and off for brief periods.

    5. Ratchet: Certain rate designs incorporate minimum billing demands based upon historical peak demands. For example, if the peak demand last summer was 500 kW and the rate design has a 50% ratchet, the minimum billing demand would be 250kW (500 kW times 50%) for the following eleven months, regardless of whether the actual demands were lower.

    Some stakeholders have suggested that demand charges should be included in Electric Vehicle residential rates as an additional incentive to offpeak charging and to recover costs of upgrades to the distribution system needed to accommodate Electric Vehicle charging.

    Demand charges are not currently a component of residential rates. Instead, in the residential setting, capacity costs are recovered through volumetric charges. In the context of residential Electric Vehicle rates, a demand charge could be included as a rate component so that Electric Vehicle customers who place higher costs on the electric system by, for example, charging on-peak or at higher voltages, are assessed rates based on the maximum demand they impose on the distribution circuit.

    Some parties, including SCE, DRA, NRDC and Green Power Institute, stated that residential demand charges may not be necessary since time–of-use rates can accomplish capacity cost recovery. SCE also noted that costs associated with a particular customer class could be more easily recovered through a simple customer charge. Nevertheless, some of these same parties acknowledged that demand charges are a more precise tool for recovering demand-related costs.

    In contrast, SDG&E stated that increasing the time-of-use differentials could lead to the potential under recovery of the costs to serve a growing Electric Vehicle customer group. SDG&E suggests this argues for the need to introduce fixed and demand charge components to the Electric Vehicle rate structure. The CPUC was persuaded that adding demand charges to residential Electric Vehicle rates would be too great a change to residential rates at this time. Instead, we direct each utility to re-evaluate the feasibility and benefits of an Electric Vehicle residential demand charge in its next review of Electric Vehicle rates for 2013.

  2. Electric Vehicle Service Provider Rates in Residential Settings - An electric vehicle service providers might operate in a residential location. For example, an electric vehicle service provider may provide all the equipment required to charge an Electric Vehicle at a home together with a charging service, in which the electric vehicle service provider separately charges customers for the electricity used to charge their vehicle. In this case the electric vehicle service provider, not the homeowner, would be the utility’s customer.

    In July 2011, the CPUC found that in order to preserve equitable, cost of service treatment and maintain a level playing field between utilities and electric vehicle service providers, existing residential Electric Vehicle rates should apply to electric vehicle service providers operating in the residential setting. Electric vehicle service providers should only be eligible for residential rates designed to serve Electric Vehicle load and, therefore, would not be eligible for non-time-of-use general service rates in the residential context.

  3. Inter-Utility Electric Vehicle Residential Rates - In the August 20, 2009 OIR, the CPUC asked parties whether special arrangements were necessary for a residential customer to pay for electricity when charging an Electric Vehicle in another utility’s service territory. For example, should the utilities establish a single billing procedure to link all Electric Vehicle electric usage, regardless of the service territory within which the Electric Vehicle charging occurs, to a customer’s home utility.  In July 2011 the CPUC found  that it is premature for the Commission to direct the utilities to implement inter-utility billing and left open the possibility that further development of this concept may be useful in the future.

  4.  SB 626 (Kehoe) Electrical Infrastructure Plug-in Hybrid and Electric Vehicles - This law passed in 2009 requires the CPUC, in consultation with the CEC, CARB, utilities, and the motor vehicle industry, to to develop infrastructure sufficient to overcome any barriers to the widespread deployment and use of plug-in and electric vehicles, and to adopt rules by July 1, 2011, on specified matters, including infrastructure upgrades necessary for the widespread use of plug-in hybrid and electric vehicles.

  5. LEV - Low Emission Vehicle -

  6. MDU - Multi Dwelling Unit - In the MDU setting, the Electric Vehicle owner may not be the utility’s electric customer. Multiple Electric Vehicle owners may use the same charging
    equipment. Submetering at MDUs and workplaces requires additional evaluation to determine what protocols and policies are needed to support these options.

  7. PEV - Plug-in Electric Vehicle -

  8. NEV - Neighborhood Electric Vehicle - The U.S. Department of Transportation classifies low-speed electric vehicles as a NEV. Although federal regulations certify NEVs as “street legal,” NEVs are not required to have air bags and cannot travel on highways or freeways. NEVs are therefore restricted to roads with a 35 mile per hour speed limit or less.

  9. Whole House Rate - A residential single meter Electric Vehicle rate, while specifically designed for Electric Vehicle charging, is applied to a residence’s entire electricity usage. SCE’s and PG&E’s single meter Electric Vehicle rates are tiered, while SDG&E’s are not. All of the utilities’ single meter rates are optional (opt-in), meaning a residential customer must make a proactive voluntary decision to go onto the Electric Vehicle rate. The challenge of single meter Electric Vehicle rate design  is to structure a simpler, cost-based, time-of-use rate that avoids the disincentives for Electric Vehicle use associated with tiered rates but still recovers the incremental cost to serve Electric Vehicles.

    NRDC and the EVSP Coalition note that the existing single meter Electric Vehicle rates effectively place the customer into the upper tiers of the rate structure due to the increased electric usage resulting from the customer’s Electric Vehicle load. As a result, such rates subject Electric Vehicle load to what these parties describe as high vehicle mileage costs. While removing the tiers from the single meter rate would address this issue, NRDC also expressed concern that switching Electric Vehicle charging from a tiered single meter rate to a non-tiered single meter rate could eliminate the conservation signals provided by the tiers.
Residential Metering Options -
Service Planning / Installation Perspective Source: PG&E
Residential Metering Options -
Billing Perspective Source: PG&E

3. Business Case
  • The number of utilities offering EV tariffs has increased from eight a year before to 22 in July 2012, but that still represents just 6% of utilities nationwide, according to a new report from Northeast Group. And though a number of the utilities offering EV tariffs are located where you might expect – in California and Michigan – they actually crisscross the country, from Alaska to Georgia.

    Of the 22 utilities in 11 states that are offering EV tariffs, the report indicates:
    • Most have taken two main forms -- time-of-use (TOU) and flat rate plan
    • They are typically one-half the cost of standard electricity tariffs to recharge an EV

  • Each California IOU currently offers a residential PEV Time of Use (TOU) tariff. Each PEV TOU tariff is either for bundled household load and vehicle load, or segregated vehicle load. A vehicle load rate requires separate metering.
  • In June 2010, the CPUC approved new temporary experimental rates for plug-in electric vehicles for San Diego Gas and Electric Company (SDG&E) customers as part of the utility's Pricing and Technology Study.
    • The Study will be performed by SDG&E, in collaboration with ECOtality, Inc. and Nissan. The experimental rate schedules will begin January 1, 2011, and will remain in effect until November 30, 2012 (or until the completion of the Study). ECOtality was the recipient of a U.S. Department of Energy stimulus grant to fund the deployment of electric vehicles and charging systems in five U.S. cities, including San Diego. "The Study will help the state better understand the impacts of different rate structures on how and when customers charge electric vehicles," said CPUC President Michael R. Peevey. "This information is critically important as we contemplate a future with widespread electric vehicle usage, given the additional electricity demand these vehicles create and the associated impacts on the grid.

    The Study “will examine the complexity of the behavioral relationships that are manifest as price elasticities, which measure the sensitivity of PEV charging to the on-peak/off-peak time-of use (“TOU”) price differential, the overall electricity price level, prices of substitutes, customer demographics, and other relevant factors.” The Study’s working hypothesis is that greater variations in time-varying pricing, together with the use of accommodative vehicle technology, will shift more charging activity to off-peak periods. For the purposes of this Study, “technology” refers to the communication and control devices that will facilitate convenient and economic “smart charging” behavior.
    Through the ECOtality project, the first 1,000 purchasers of Nissan LEAF electric vehicles in San Diego will receive free home charging equipment. Each Nissan car owner will also become a participant in SDG&E's Pricing and Technology Study. The objective of the Study is to benefit California's understanding of how electric vehicles interact with the electric grid. The Study's working hypothesis is that greater variations in time-varying pricing, together with the use of accommodative vehicle technology, will shift more charging activity to off-peak periods. The project will also provide approximately 1,500 additional Level 2 Public/Commercial Chargers and 50 Fast Chargers. The California Energy Commission (CEC) awarded $8 million to Ecotality as matching funding for this project, which will likely result in additional Public/Commercial charging infrastructure being deployed to the San Diego region.
  • In July 2010, after reviewing legal briefings on the matter in an open regulatory process, the CPUC concluded in a Phase 1 Decision that providers of electric vehicle charging services should not be regulated as public utilities.  The CPUC found that the provision of electric vehicle charging services does not make an entity a public utility and that electric vehicle service providers are, with certain exceptions, end-use customers of a regulated utility.  The CPUC also identified sources of broad regulatory authority (such as the authority to set rates) to address the potential impacts of PEVs on the grid, and to ensure the state meets its greenhouse gas emission reduction goals.  (Press Release)

    The July 2010 Decision notes that legislative codification of the summary conclusion, namely that providers of electric vehicle charging services should not be regulated as public utilities, would remove additional barriers to widespread deployment and use of PEVs by providing statutory surety. 
  •  On March 15, 2011, the CPUC issued a Proposed Decision of President Michael R. Peevey  addressing “Phase 2” issues in the proceeding, establishing policies to overcome barriers to PEV deployment, and complying with SB 626.  The Proposed Decision addresses:
    • PEV Rates, including cost allocation issues
    • PEV Metering Arrangements
    • Utility Notification Policies
    • Utility Customer Education and Outreach programs
    • Utility Demand Response Programs for PEVs.
  • In July 2011, the California Public Utilities Commission (CPUC) released its Phase 2 Decision establishing policies to overcome barriers to electric vehicle deployment.  The decision complies with Public Utilities Code Section 740.2 ( Senate Bill 626 Kehoh) by:
    • Directing electric utilities to collaborate with automakers and other stakeholders to develop an assessment report to be filed in this proceeding to address a notification processes through which utilities can identify where Electric Vehicles charging will likely occur on their electric systems and plan accordingly. To ensure this notification system develops in a timely fashion, the utilities must jointly file the assessment report in this proceeding within 150 days of the effective date of this decision.

      In connection with this proposal, SCE, PG&E, and SDG&E requested Commission approval of initial funding to support the evaluation of the data clearinghouse. This request was denied, however, utilities are not precluded from seeking recovery of reasonable costs of any utility notification systems in future rate cases.

      NRDC expressed support for a notification process. CFC requested Commission scrutiny of data-related privacy issues. DRA urged the Commission to reject funding on the basis that ratepayers should not bear the cost of the initial evaluation for the utilities’ Electric Vehicle data collection.

      In some instances, an Electric Vehicle buyer might voluntarily inform the utility of the physical location of charging. Electric Vehicle buyers are motivated to contact utilities to, for example, obtain service under an Electric Vehicle electric rate schedule. Electric Vehicle buyers have little motivation, however, to contact a utility for the purpose of notifying utilities of the location of the Electric Vehicle charging. In addition, no formal standardized notification program exists so that a utility can identify all Electric Vehicles being introduced into their service territories.

    • Affirming that, with certain exceptions, the electric utilities’ existing residential Electric Vehicle rates are sufficient for early Electric Vehicle market development, and, similarly, that existing commercial and industrial rates are sufficient in the early Electric Vehicle market for non-residential customers. The decision also sets out a process to reexamine Electric Vehicle rates in 2013. By then the Commission will have a better understanding of customer charging behavior and more Electric Vehicle load profile data to inform future rate design.

    • Because a single meter Electric Vehicle rate motivates a customer to better manage the peak impacts of the entire household’s electricity usage, not just the energy used for Electric Vehicle charging, we will not prohibit single meter Electric Vehicle residential rates. The CPUC hopes that when we revisit rates for Electric Vehicles in 2013, inexpensive submetering technology will be readily available, obviating the need for such rates. As this outcome is not certain, the CPUC encourages SCE to continue exploring the feasibility of a non-tiered single meter rate, and directs PG&E to do likewise.

    • Considering opportunities to migrate toward new and lower cost metering technologies for Electric Vehicle charging and sets out a process to develop an Electric Vehicle metering protocol to accommodate increased Electric Vehicle metering options, such as submetering.

    • Determining that until June 30, 2013, the costs of any distribution or service facility upgrades necessary to accommodate basic residential electric vehicle charging will be treated as shared cost.
    • Requiring utilities to perform load research to inform future CPUC policy.
    • Addressing utility ownership of electric vehicle service equipment
4. Benefits
  • Load Leveling - Assuming that approximately 76% of drivers charge during a normally low-demand “off-peak” period, additional PEV load can flatten the daily load curve and improve grid load factors. A flattened load shape results in more efficient utilization of power plants and transmission / distribution assets, which lowers average electricity costs.
  • One idea raised by Brett Williams of UC Berkeley's Transportation Sustainability Research Center entails tracking and treating electrons for "fuel services" differently than electricity for powering other stuff.

    Electric utilities in California are "de-coupled" -- i.e., not incentivized by how much electricity they sell. What if they were "coupled" on the electricity they sold for fuel services or if e-fuel was treated differently? The utilities would have a stake in the penetration and performance of EVs and V2G.
    Williams of the TSRC suggested that this might make sense because in the near-term there will be a need to track these EV electrons for carbon credits or so a tax can be applied to make up for lost revenue from gasoline road taxes.

5. Risks/Issues
  • Geographic Rate Confusion - Another potential PEV tariff issue is the disparate and potentially confusing range of PEV rate options offered by different utilities to electricity customers/EV drivers. PEV rates differ amongst the IOUs and municipal utilities. The rate difference may be particularly problematic for residential electricity customers/EV drivers that charge at home in one utility service territory, and charge at work or another residential location in another utility service territory. As an example, a residential electricity customer/PEV driver may have a primary charging location in a small utility whose service territory is embedded in a larger IOU service territory.

  • High Residential Inclined Block or Tiered Rates - Tiered rates increase as a customer’s cumulative usage increases during a billing period and are intended to promote energy conservation.  Electric Vehicle charging is incremental to existing household load, and, therefore, if included with other household load via a single meter, may push the customer into the highest rate tiers. Because tiered rates climb steeply, the bill impact for the Electric Vehicle purchasers could be significant. Exposing the Electric Vehicle owners to tiered rates may raise charging costs enough to discourage prospective Electric Vehicle purchasers. For Electric Vehicle owners, tiered residential rates may also discourage overnight charging of Electric Vehicles at home, perversely encouraging on-peak charging at the workplace or other non-residential settings.

  • Cost of Second Residential Meter - A dedicated second meter that can help reduce monthly utility bills. But it may involve a small upfront utility fee and potentially thousands of dollars in installation costs. To be eligible for IOU PEV rates for segregated PEV load, the customer’s service requires an advanced meter that can communicate sub loads to the utility and a second hardware device to communicate PEV sub load to the advanced meter. The CPUC has authorized the installation cost of an advanced meter for every customer by 2012-2013 pursuant to the Advanced Meter Infrastructure proceeding. The cost of the second device would be born by the customer, as it is located on the “customer side” of the meter. Utilities are working toward standardizing the cost and technical aspects of the second device.

  • Submeter Ownership - Customer ownership of meters allows customers to respond to technology changes and to directly incur the costs and, likewise, receive the benefits of adopting innovations in metering. The effect of competition for meters could produce cost savings for customers. Disadvantages to customer owned meters include the potential for lack of standardization of metering functionality, the need to have a governmental agency verify meter performance, and elimination of the opportunities to reduce costs through utility economies of scale.

    In their July 2011 decision, the CPUC found that Electric Vehicle submeters should be treated consistent with the treatment of any other equipment located on the customer side of the meter. The primary meter will remain under the ownership of the utility. A submeter would measure Electric Vehicle load and be used by the utility in its billing calculations. This arrangement will provide utilities with control over the total billing level and limit opportunities for fraud or meter tampering. Most likely, incidences of fraud would be limited to tampering with the submeter’s calculation of the Electric Vehicle subload, which does not impact the utility calculation of the total load at the primary meter.

    Parties generally agreed that a need exists for an Electric Vehicle submeter protocol to determine rules for customer-owned meters.

  • Should utilities be permitted to own electric vehicle service equipment? - Utility ownership of this equipment could provide safety advantages, reduce customer cost, and support utility notification of location where vehicles will be charged. However, utilities can not recover costs related to electric vehicle service equipment from ratepayers. The CPUC did not find convincing evidence that utility ownership of electric vehicle service equipment will result in safety advantages over electric vehicle service equipment owned by customers or other entities. Municipal governments already have permitting requirements that review project installations for their safety merits. Additionally, national standards on electric vehicle service equipment couplers and other equipment features ensure manufacturers’ adherence to safety standards. They also found speculative the assertion that utility ownership of electric vehicle service equipment will reduce customer costs.

  • Utility Cost Recovery Policy for Residential Upgrades and Extensions - Utilities anticipate the need to make infrastructure upgrades to accommodate the added load from residential Electric Vehicle charging. For example, if a residential customer installs electric vehicle service equipment, the utility may determine that the distribution transformer, a service panel, or other equipment needs to be upgraded to facilitate vehicle charging. There is a great deal of variability depending on whether residential customers will respond to incentives to charge off-peak. A preliminary PG&E analysis suggests “distribution upgrade costs to accommodate charging for residential circuits may be as much as five to twenty times greater on-peak as compared to off-peak.

    According to California's Rule 15, an upgrade to equipment serving multiple customers is generally considered a utility expense and the associated cost is borne by the general body of ratepayers.

    The cost allocation of upgrades to equipment serving a single customer, which is governed by Tariff Rule 16, is more complex. For equipment upgrades due to increased electricity usage designated as “new and permanent load,” the customer is provided an “allowance” to off-set the costs of the upgrade. The allowance is a fixed dollar amount for all residential customers within a utility service territory. Generally, any upgrade costs up to the dollar amount of the allowance are paid for by the general body of ratepayers and any costs in excess of the allowance are paid for by the specific customer served by the equipment.

    While TURN argues that a PEV does not fit the definition of permanent load, the CPUC decided that from a broader policy perspective, it makes sense to treat PEV as permanent load.

    In some instances, the costs of residential upgrades to enable Electric Vehicle changing will exceed the allowances provided under Rules 15 and 16. The CPUC decided in July 2011 that between the effective date of this decision and June 30, 2013, service facility upgrade costs to enable basic (in most cases to encompass Level 1 and 2 charging for at least one vehicle) Electric Vehicle charging that exceed the residential allowance will be treated as common facility costs rather than being paid for by the individual Electric Vehicle charging customer.

  • Quick Charging Facilities Cost to Grid - These DC charging facilities, are designed to charge an electric vehicle battery to 80 percent capacity in approximately 30 minutes by drawing as much as 50 to 250 kilowatts. As a result, quick charging facilities place a considerably higher kilowatt demand on the electric system than even the fastest Level 1 or Level 2 charging. While the impact of quick charging on Electric Vehicle adoption is projected to be positive, its impact on peak demand and distribution infrastructure is uncertain.

    It is expected that quick charging will most commonly be available at non-residential sites or electric vehicle service provider charging spots and will function similarly to a gasoline filling station. The CPUC found the tariffs now available in the commercial and industrial context are characterized by a number of design features and eligibility requirements that serve to ensure that electric vehicle service providers bear the costs appropriate to their impacts on the electric system. These include all or some combination of time-of-use rates, demand charges, and/or eligibility criteria that limit the capacity under a given tariff to a pre-defined maximum.

  • PEV Tariff Scope - Should PEV rates apply to small battery capacity low-speed PEVs and electric motorcycles? The PG&E electric schedule E-9 tariff currently excludes “low-speed electric vehicles and electrically powered motorcycles as defined by the California motor vehicle code.” While NEVs are not intended to replace highway VMT, they are an important means of reducing short trips under three miles, which comprise nearly half of all trips. The U.S. DOE states that NEVs are “very efficient in terms of initial capital costs, fuel costs, and overall operating expenses.” The CARB ZEV mandate provides credits for NEVs used. The ARRA also makes NEVs eligible for consumer tax credits, and the AQIP program funds NEV purchase incentives. Moreover, the 2005 NEC Article 625.2 incorporates NEVs into the definition of electric vehicles. Therefore, to the extent that the PEV rate incents increased PHEV, BEV, and NEV usage, it would seem illogical to exclude NEVs from rate applicability.

  • Highway Tax Replacement - The California and Federal Departments of Transportation rely on highway tax and sales tax from gasoline for highway construction and maintenance. California tax, federal tax, and sales tax amounts to $0.735/gallon. This tax equates to $0.02/kWh on BTU basis or $0.08/kWh per mile basis, which is currently not assessed on PEV rates. In the long term, a policy to levy an equal tax on all alternative fuels, including biofuels or hydrogen, may be needed to avoid significant loss of transportation network funding. Alternatively, such a tax may be implicitly achieved via the cap-and-trade pricing mechanism, once transportation fuels are including in the cap. At that point, all fuels, including petroleum and alternative fuels, will effectively be internalizing the cost of CO2e from well-to-wheels. Alternative fuel taxes, if they apply to electricity fuel and other alternatives, may require California Legislative or other coordinated state agency action.

  • Carbon Market Rules - AB 32 cap-and-trade emissions allowance allocation policy that does not address the anticipated transfer of emissions from the transportation to the electricity sector associated with transportation fuel “switching” from petroleum to electricity.

    Electricity utilities may face a disincentive to support electrification if penalized for emissions due to load supplied to electric vehicles. Assuming allowances are allocated on a sectoral basis, failure to make available additional allowances to the electricity sector due to electrification to the electricity sector risks overburdening ratepayers with the cost of transportation sector emissions. Provided that electrification occurs at a significant scale, regulators should consider a policy to shift allowances from the transportation sector to the electricity sector, while not changing the total cap on the pool of allowances.

6. Next Steps
  • Additional research is needed to inform policies for the next stages of Electric Vehicle market development. Presently, many uncertainties surround the evolving market for Electric Vehicles and charging services. Among these uncertainties are the extent to which consumers will charge vehicles off-peak versus on-peak and consumer response to various time-of-use rate designs and metering arrangements. It is also unclear whether consumers in the residential context will react to time-of-use rates differently compared to consumers in the MDU context.

    Two studies that will yield instructive results are Ecotality’s Electric Vehicle Project and Coulomb’s ChargePoint America.

  • The CPUC ordered that the following Electric Vehicle load research be completed by January 1, 2013 so it can inform the Electric Vehicle rate design recommendations submitted with PG&E’s 2014 General Rate Case (rate design phase) and SCE’s and SDG&E’s rate design window applications in 2013.
    • Track and quantify all new load and associated upgrade costs in a manner that allows Electric Vehicle load and related costs to be broken out and specifically identified. This information shall be collected and stored in an accessible format useful to the CPUC.
    • Evaluate how metering arrangements and rate design impact Electric Vehicle charging behavior. 
    • To the extent relevant, determine whether participation in demand response programs impacts Electric Vehicle  charging behavior. 
    • Determine how charging arrangements, including metering options and alternative rate schedules impact  charging behavior at MDU. 
    • Evaluate whether distribution costs are increased by different charging levels, i.e., Level 1, Level 2, and quick charging, in public locations. 
    • Separately track costs associated with Electric Vehiclerelated residential service facility upgrade costs and treated as “common facility costs” between the effective date of this decision and June 30, 2013, and propose a policy and procedural mechanism to address these residential upgrade costs going forward.
7. Companies/Organizations
  1. CARB - California Air Resources Board - Responsible for implementing California's SB32 Plan to reduce GHG. Within California, the electricity sector accounts for only 25% of economy wide emissions, yet the sector is responsible for reducing 40% of emissions to meet 2020
    goals, according to CARB’s Scoping Plan. The Plan recognizes that the transportation sector must be responsible for reducing its share of the economy wide emissions and not expect other sectors, such as electricity, to make up the difference.

  2. California Department of Food and Agriculture - Will play a key role in any submeter process as the regulator of non-utility measurement devices used in commercial transactions.

  3. CEC - California Energy Commission -  Responsible for California Energy Codes It could update Title 24 to provide mandatory, minimal (20-30A @ 240V) EV home infrastructure requirements including upgraded service entrance (i.e. 200A-320A service) for new home construction and incentivize further charging (50-70A@240V).or update Title 24 for MDUs to allow for minimum EV infrastructure installation for new construction.

  4. CPUC - California Public Utilities Commission - Regulates privately owned electric, natural gas, telecommunications, water, railroad, rail transit, and passenger transportation companies. In response to Senate Bill 626 (Senator Christine Kehoe, 2009), and to make sure the electric utilities the CPUC regulates are prepared for the projected statewide market growth of plug-in electric vehicles s (PEVs), the CPUC initiated an Alternative Fueled Vehicle Rulemaking Proceeding in August 2009.

  5. DRA – Division of Rate Payer Advocates, San Francisco, CA – Public Advocate in California An independent consumer advocacy division of the California Public Utilities Commission (CPUC), Part of the California PUC Our 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.

  6. ECOtality - San Francisco - (NASDAQ: ECTY) Through the ECOtality project, the first 1,000 purchasers of Nissan LEAF electric vehicles in San Diego will receive free home charging equipment. Each Nissan car owner will also become a participant in SDG&E's Pricing and Technology Study. The objective of the Study is to benefit California's understanding of how electric vehicles interact with the electric grid. The Study's working hypothesis is that greater variations in time-varying pricing, together with the use of accommodative vehicle technology, will shift more charging activity to off-peak periods.

  7. NRDC - Natural Resources Defense Council

  8. EV Service Provider Coalition, consisting of Better Place, Coulomb Technologies, Inc. (Coulomb), and Ecotality/eTec, submitted a joint pleading in CPUC EV Rate Proceeding. They claim that the Commission has no jurisdiction over electric vehicle charging service providers that offer electricity as a form of transportation fuel. This coalition supports the analysis in the Scoping Memo and states that over-reaching jurisdiction will stifle competition, innovation and investment in the industry. They suggest the Commission adopt tariff rules to facilitate the provision of electric vehicle services in a manner that is as convenient and seamless as possible.

  9. TURN - The Utility Reform Network, San Francisco CA - Utility watchdog that stand up for consumer rights, affordable rates and a more livable California. For more than 30 years they have challenged California’s powerful energy and telephone companies, saving consumers and small businesses millions, and demanding reliable service and environmentally sound policies. Opposes special deals for EV Owners.

8. Links
  1. Alternative Fueled Vehicle Proceeding - CPUC
    1. July 6, 2011 (Revision 2): President Michael Peevey's Proposed Decision on Phase 2 matters establishing policies to overcome barriers to electric vehicle deployment and complying with Public Utilities Code Section 740.2
    2. July 29, 2010: CPUC Addresses Regulatory Authority to Create Vibrant Market for Electric Vehicle Charging
      Full Decision
    3. California Public Utilities Commission- "Light-Duty Vehicle Electrification In California" May 2009. - A comprehensive white paper created to spot trends, issues, opportunities, and barriers. The CPUC objectives were to ensure that fair and reasonable rates for EVs would be offered, to protect the reliability of the grid, to promote innovation for EV products and services by keeping the various "playing fields" level and open, and to make sure that other critical issues also are being addressed. The CPUC is essentially leading the process of establishing "the rules of the game" for EVs, and since this has never been done before, the results will likely serve as the template for other states and countries going forward
  2. CPUC Resolution E-4334. San Diego Gas & Electric (“SDG&E”) requested approval to establish three new temporary experimental residential rate schedules for plug-in electric vehicle (“PEV”) charging

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