Plugging Away – San Diego’s Plan to “Charge” Toward a Cleaner Grid

rp_Larissa-Koehler-200x300.jpgWe love electric vehicles (EVs) here in California and we want that love to spread. Why? It isn’t because of the cool factor – though, believe me, EVs like the Tesla are undoubtedly cool. Instead, it’s because these cars can offer significant benefits to the environment, electric grid, and economy.

California policymakers feel the love: in March 2012, Governor Brown signed an Executive Order that put an ambitious – and important – goal in place to provide the infrastructure for up to 1 million zero-emission vehicles (ZEVs), which includes fuel cell powered vehicles along with plug-in hybrid and battery EVs, by 2020 and put 1.5 million ZEVs on the road by 2025.

Here are some of the potential benefits of electric vehicles:

  • Reduce harmful pollution. Because EVs don’t produce any emissions from the tailpipe when they are drawing on energy from their battery – unlike traditional gasoline-powered vehicles – they can greatly reduce the amount of harmful pollution from which California suffers. Targeting tailpipe emissions, the largest contributor to dangerous emissions, will help the state meet its greenhouse gas reduction targets and reduce harmful pollutants that are causing elevated levels of smog.
  • Integrate more renewable energy. By charging at times when renewable energy is abundant (i.e., during the day to take advantage of solar and late at night to soak up wind power), EVs can enable the grid to handle more clean energy resources while still maintaining reliability.
  • Avoid increasing use of fossil fuel resources. Because solar power becomes unavailable when the sun goes down, the grid sees a steep increase in the use of fossil fuel-powered energy before sunrise and after sunset. If EVs charge during the day and then draw upon that stored energy when renewable energy is unavailable it will reduce the need for fossil-fueled generators to provide energy during these times of the day.
  • Avoid costs to utilities and residents. Capitalizing on the ability of EVs to integrate more renewables onto the grid can offset the need for additional, expensive transmission and distribution infrastructure as energy needs increase over time. In addition, EVs present an attractive financial proposition – by reducing or eliminating the amount that drivers spend at the gas pump, those who purchase an EV can recover the upfront cost of the car in a matter of years.

San Diego’s Vehicle-Grid Integration pilot project

Some utilities are starting to follow through on increasing EV deployment per the Executive Order, like San Diego Gas & Electric (SDG&E), which submitted an application with the California Public Utilities Commission (CPUC) last year to install 5,500 charging stations over four to five years, with a focus on workplaces and multi-unit dwellings. Because EDF is working on multiple fronts in California to reduce carbon emissions, Jamie Fine, Senior Economist and Interim Idea Bank Director, submitted testimony to the CPUC to give EDF’s perspective on SDG&E’s pilot.

SDG&E’s pilot could benefit California in the following ways:

  • Increase EV deployment. Currently, California is not on track to meet the Governor’s goals – despite state and federal rebates and incentives designed to make EVs more affordable. Installing more charging stations in its service territory can help spur the EV market and accelerate sales to help put us back on target.
  • Diminish anxiety about mileage per charge. You know how anxious you get about your battery running low on your smartphone? This feeling is multiplied when it comes to the vehicle you depend on to get you from point A to point B. By placing charging stations at workplaces and multi-unit dwellings, people don’t have to worry about getting stuck in a place without access to an outlet, alleviating concerns of potential EV owners and making ownership a more viable prospect.
  • Offer of a dynamic electricity rate. SDG&E intends to communicate with its EV customers on their mobile devices and via its website to inform them of day-ahead pricing that links low cost to times that charging would be most beneficial to the grid and environment. Giving drivers an easy way to know when charging offers the lowest cost proposition means that increasing numbers of EVs can be a boon rather than a burden on the grid.

EVs in California: A blessing or a burden?

While EDF is enthusiastic about these potential benefits to Californians, we also asked the CPUC to:

  • Ensure a competitive market. We don’t want to see a situation in which third party charging providers can’t compete, since this would reduce customer choice and slow innovation. Thus, while utilities may be allowed to own charging infrastructure as a means to jumpstart the market, the CPUC should keep a close eye on the developing industry to ensure it remains a healthy arena for entrepreneurs.
  • Hold utilities accountable for delivering benefits. While this pilot is not fully funded by SDG&E’s customers, they will be responsible for a large portion of the costs – ostensibly, because the environmental and grid benefits described above will be spread among all customers in SDG&E’s service territory. However, if people are paying for benefits that are never delivered, this is not fair to the customers footing the bill. Accordingly, the CPUC should consider a system where utility shareholder rewards are based on how well they do in achieving promised outcomes, rather than guaranteeing profits.

Increasing numbers of EVs in California can be either a blessing or a burden – depending on how wisely they are charged. Combining strategic charging with appropriate infrastructure, as SDG&E has proposed doing, can maximize environmental and economic benefits, rather than create a strain on the grid. By exercising caution in the ways described, the CPUC can ensure a thriving, smartly designed, and innovative charging market. Doesn’t helping California become more sustainable look even cooler now?

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  1. James Torrington
    Posted March 18, 2015 at 11:57 am | Permalink

    Interesting article, thank you. Would the costs of these chargers be passed on to all of SDG&E customers, or only those who have these vehicles or volunteer to pay more? With the addition of other green options, such as solar, we either all get the benefit directly, or can volunteer to pay more as a “green” customer. While positive in many ways, it would appear all of us would be footing the bill for those with the funds to purchase these vehicles.

  2. Larissa Koehler
    Posted March 25, 2015 at 10:24 am | Permalink

    Thank you for your comment and your interest in this issue, James. You are correct that these programs will be mostly funded by customers, even those who do not own EVs. SDG&E is also seeking funding from AB 32 (California’s Global Warming Solutions Act of 2006) proceeds for this pilot – so they do not propose having customers foot the entire bill. The reason that customers, even non-EV owners, will be largely responsible for funding this pilot is that the environmental and grid benefits of managed EV charging and increased EV deployment, like reduced combustion emissions and the ability to integrate more renewables, will be shared amongst all of SDG&E’s customers. That being said, EDF feels it is highly important to ensure that customers receive the benefits they are paying for. EDF highlighted in its formal comments in this proceeding the importance of holding SDG&E responsible for delivering promised benefits; to that end, we suggest that the Commission start to consider a performance-based ratemaking system, in which utility shareholders are rewarded for performance in delivering promised outcomes, rather than receiving a guaranteed rate of return.