California Regulators Redirect Electric Transportation Strategy; Stakeholders Protest

The California Public Utilities Commission late last week terminated its docket on transportation electrification and opened a new one to create a more coordinated strategy for electric vehicles and their integration into the electric grid.

The order, particularly in its draft form, attracted opposition from industry stakeholders, who filed a letter with the commission on December 11, two days before the commission’s unanimous approval of the order (R13-11-007).

Advanced Energy Economy, BYD North America, eMotorWerks, Gridlots, Proterra, and Siemens Digital Grid asked that the commission withdraw the proposed order, saying it would “effectively put a freeze on all new utility transportation electrification applications for at least two years.”

They argued that the order contradicts S.B. 350, the California law that seeks to promote transportation electrification and requires the commission to devise rules to implement that goal.

The stakeholders also objected to the timing, saying the proposed order was introduced with little notice before the December 13 meeting, depriving stakeholders the opportunity for review and comment.

The result, they said, would be “tremendous regulatory uncertainty for the business community.”

Opens Transportation Electrification Framework

During the meeting at which the commissioners approved the order, Commissioner Carla Peterman, who has led many of the commission’s efforts on transportation electrification, said she appreciated the concerns of stakeholders who criticized the order but “the intention is the opposite. It is to provide better regulatory certainty.”

Other commissioners expressed similar sentiments supporting Peterman, who is stepping down as commissioner at the end of the year.

Commissioner Cliff Rechtschaffen explained the need for the order, saying that the commission’s approach to transportation electrification since it was first taken up in 2013 has been “done in an ad hoc, reactive, non-coordinated way.”

In addition, Rechtschaffen said, several key issues are still pending and need to be taken up in the Transportation Electrification Framework (TEF) that the new order opens. Pressing issues he mentioned include electric rate design, such as for demand charges for direct current fast charging stations, and vehicle to grid integration.

“To get to the next level, we need a more coordinated strategy; we need a strategy that is cost effective, equitable and provides market certainty to third party market players. The OIR (Order Instituting Rulemaking) takes an important step in this area,” Rechtschaffen said.

Taking a slower road?

“We need more of a strategic framework. We are sympathetic to the state needing a strategy,” said Matt Stanberry, vice president for market development at Advanced Energy Economy. But his concern, shared by other signatories to the AEE letter, is that the new docket freezes development of transportation electrification at a critical point.

Language in the original draft had two dates, one establishing a cutoff of Dec. 1, 2018, after which new transportation electrification proposals would be considered under the new TEF rules, and a second referencing that the TEF process would be resolved in 24 months. Adding in time for comments and for the rules to be drafted, reviewed and finalized would, in effect, lead to a four-year freeze on applications, Stanberry said.

“We know that most PUC proceedings don’t generally run on time. They tend to be strenuously debated, so they tend to have a lengthy process,” Stanberry said.

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The final order removes the date references. Instead the language says the commission will decide whether or not new applications will be judged by the old or by the new criteria. That still amounts to regulatory uncertainty, Stanberry said.

In the meeting, Peterman said that none of the nine pending applications, representing nearly $1 billion, would be delayed because of the order. The commission has already approved more than $1 billion in utility spending on transportation electrification.

Walk and chew gum

“From our vantage point,” Stanberry said, “we can walk and chew gum at the same time. So, we don’t have to stop progress to determine a new strategy. Those things can happen in parallel.”

Stanberry also said that the timing of the order is “pretty concerning,” coming as it does when California is “well behind” on charging infrastructure to meet goals. The California Energy Commission estimates the state has to expand charging infrastructure from less than 16,000 non-residential chargers to over 155,000 chargers by 2025 to support the goal of having 1.5 million vehicles on the road by 2025. “It is clear that California has a long way to go in six years,” the stakeholders wrote.

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