CA Greenlights Big Utility Effort to Electrify Transport

The California Public Utilities Commission today authorized four utility programs with a collective budget of $738 million to “accelerate widespread transportation electrification,” as required by a landmark clean energy law adopted in 2015. In combination with previously authorized programs, this means California's regulated utilities will be investing approximately $1 billion to eat away at Big Oil’s longtime monopoly over transportation fuels.

Diverting billions of gasoline and diesel fuel dollars that would otherwise go to oil companies can help lower transportation fuel bills—and also utility bills because electric vehicles can be charged when there is spare capacity in the electric grid. This spreads the costs of maintaining the grid over more sales, putting downward pressure on electric rates to the benefit of all utility customers.

Today’s decision authorizing new full-scale programs follows the approval earlier this year of 15 different pilot programs to electrify transit buses, school buses, cranes, agricultural trucks, delivery trucks, airport equipment, and other vehicles, with a collective budget of $43 million.  

The pilot programs will run for about a year each, while the full-scale programs will be implemented over the course of several years. They all stem from the same 2015 clean energy law and they all emphasize deployment in disadvantaged communities that have historically been exposed to dangerous levels of air pollution, largely from the gasoline and diesel vehicles these programs will displace.

Per today’s decision, California’s major investor-owned utilities will help electrify a broad swath of the transportation sector, which is the largest source of pollution in the state.

Pacific Gas & Electric (PG&E) will:

  • Deploy electrical infrastructure to support approximately 300 Direct Current fast-charging stations for passenger vehicles, with a budget cap of $22 million
  • Provide charging infrastructure to support customers investing in medium and heavy-duty electric vehicles of all types (trucks, buses, cranes, forklifts, etc.), with a budget cap of $236 million

Southern California Edison (SCE) will:

  • Provide charging infrastructure to support customers investing in medium- and heavy-duty electric vehicles of all types (trucks, buses, cranes, forklifts, etc.), with a budget cap of $356 million (a significantly bigger budget than PG&E’s comparable program, reflecting the SCE’s service territory is the epicenter of the network moving the nation’s goods and suffers disproportionately from diesel pollution as a result)
  • Implement new time-of-use electric rates designed for high-power charging of light, medium, and heavy-duty vehicles, which encourage charging when the grid is underutilized and which phase in demand charges over time, improving the economics of high-power charging

San Diego Gas & Electric (SDG&E) will:

  • Provide upfront rebates and installation services for up to 60,000 customers to install charging stations at home. The charging stations will include embedded electric meters that will allow customers to use a dynamic rate that encourages charging when renewable energy is abundant and electricity prices are the lowest

It's worth noting the combined $592 million PG&E and SCE investment in charging infrastructure to support zero-emission medium and heavy-duty vehicles authorized today will complement the $290 investment in zero-emission medium and heavy-duty vehicles authorized by the California Air Resources Board on May 25th, pursuant to the Volkswagen (VW) Air Quality Mitigation Trust. The utilities’ provision of necessary electrical infrastructure will allow the state to stretch its VW dollars, funding more zero-emission vehicles and increasing the air quality benefits as a result.

The approval of these programs reflects the support of a broad and diverse group of stakeholders who participated in the commission’s public process to review the proposals. NRDC, the Coalition of California Utility Employees, Plug In America, The Greenlining Institute, Environmental Defense Fund, Sierra Club, Union of Concerned Scientists, Greenlots, Siemens, eMotorwerks, Honda, General Motors, and the Alliance of Automobile Manufacturers had jointly urged the commission to approve the utility programs with eight modifications to the commission’s original proposed decision. We thank the commission for largely adopting those modifications in the final decision adopted today.

Similarly broad support was expressed for utility programs authorized in 2016 with a collective budget of approximately $200 million, which are now being implemented:

  • PG&E’s EV Charge Network program, which is deploying approximately 7,500 charging stations at workplaces and larger multi-family residential buildings
  • SCE’s ChargeReady program, which is deploying 1,000 charging stations at workplaces, larger multi-family residential buildings, and destination locations
  • SDG&E’s PowerYourDrive program that is deploying 3,500 stations at workplaces and larger multi-family locations

As required by state law, the commission has determined those programs are in the interest of utility customers because they promise to provide benefits in the form of safer, more reliable, or less costly service. Widespread transportation electrification can spread fixed utility system costs over more electric sales, putting downward pressure on electricity rates, and it can also lower the costs of integrating wind and solar generation. The near billion-dollar combination of the utility investments approved today and the VW Air Quality Mitigation trust fund investments approved last week marks a critical milestone in California’s efforts to electrify the transportation sector. Californians stand to reap the rewards of that investment in the form of cleaner air, a more efficient electric grid, and less dependence on the global oil market.

About the Authors

Max Baumhefner

Senior Attorney, Climate & Clean Energy Program

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