California Public Utilities Commission Takes Actions to Electrify Transportation

Transportation electrification is now the central element in California’s efforts to fight climate change, as the transportation sector represents the largest share (41%) of greenhouse gas (GHG) emissions in the state. Transportation emissions are also the largest source of diesel and NOx emissions, with the result that portions of California experience some of the unhealthiest air in the United States.

The California Public Utilities Commission (CPUC) plays several key roles in promoting the state’s goal of achieving widespread transportation electrification. These include promoting utility investments in charging infrastructure where needed to fill market gaps and priority areas; designing rates so that electricity is a cheaper option than conventional fuels while encouraging smart charging; and managing the grid so that it can handle the additional load from electric vehicles and integrating that load in a way that provides grid benefits. We are carrying out these responsibilities through a variety of decisions and actions. In the past several months we have issued four decisions that address different priority areas: charging in uneconomic locations, electric vehicle rate design, access to electric cars for low income customers, and electrifying medium and heavy-duty vehicles.

In November we approved pilot programs for electric vehicle (EV) charging in parks, beaches and schools for PG&E, SDG&E, SCE and Liberty Utilities. These programs implement two laws passed in 2018 encouraging park, beach and school electrification, locations where it may otherwise be uneconomic to install electric vehicle chargers. Together, the utilities will spend around $50 million to install as many as 800 charging ports. Between 25% and 100% will be located in disadvantaged communities, depending on the program.

We also recently added new rate options for EV customers. One significant barrier to EV adoption for commercial and industrial customers is that they typically pay a demand charge, a monthly charge for their highest demand during the month. This demand charge can be a large portion of a large customers bill. Last year the Legislature directed the CPUC to rethink how demand charges should work for electric vehicle charging. In October, we approved a new set of PG&E electric vehicle rates for commercial and industrial customers, a group that includes transit fleet operators, owners of electric delivery trucks, and providers of public charging stations. The new rate eliminates demand charges and instead implements a model similar to the fees on cell phone bills: subscription charges. Each customer will be able to “buy” a block of capacity that should meet its highest demand and then manage its charging to not surpass it. For example, a bus fleet operator, instead of plugging in all its buses at the same time in the evening, can stagger its charging throughout the night to decrease its maximum demand (and, subsequently, the amount of grid build-out needed to serve that fleet). Due to this decision, large EV customers should pay a much smaller portion of their bill as these fixed charges and hopefully save money compared to gasoline.

Another Commission decision earlier in the fall addressed an important priority area: ensuring that low income residents are not left behind as we transition to electric vehicles. We approved a $4 million PG&E program that invests in charging infrastructure for low to moderate income customers. The decision includes additional incentives for those customers, including a rebate to compensate for the purchase of a home EV charger, as well as for the panel upgrade often necessary to install the charger.

Finally, on August 15 we authorized over $100 million for SDG&E’s medium and heavy-duty program, with 30% of that budget set aside for disadvantaged communities. Although medium and heavy-duty vehicles represent only 10% of all vehicles in the state, they are responsible for 25% of the GHG emissions from the transportation sector. We expect the program to electrify approximately 6,000 vehicles ranging from forklifts to school buses to semi-trucks.

Through these and other actions, the CPUC will continue to tackle the compelling challenge of electrifying California’s transportation sector.