5. Preliminary Scoping Memo

The general scope of this proceeding is to address the issues delineated below. To the extent the background legal, technical and tariff sections discuss scope, these sections are incorporated into the preliminary scoping memo by reference.

Within the scope of this proceeding, we seek to achieve the following:

· Determine how the Commission should assess and assign the costs and benefits of electric vehicle charging infrastructure expenditures and related electricity system investments;

· Consider the principles and criteria that should guide the Commission's policies regarding standardized and expedited residential meter installation,22 EVSE,23 EVSE meters, and related charging infrastructure investments;

· Consider the principles and criteria that should guide the Commission's policies regarding standardized commercial and public meters, EVSE, and related charging infrastructure investments;

· Consider the regulatory models and entities that facilitate the anticipated environmental and electricity system benefits associated with alternative-fueled vehicle market growth, the relationship between regulated and non-regulated entities in the residential market, and the legislative modifications that may be required, if any, to facilitate this relationship;

· Consider principles and criteria to guide the Commission's authorization of scaled-up programs for investor-owned utilities designed to build awareness in PHEV and BEV owners of tariff options, EVSE installation processes, safe PHEV and BEV charging, and optimal PHEV and BEV charging to balance driver and grid benefits;

· Consider the potential near-term impacts of PHEV and BEV charging on the local distribution system, and how to ensure electricity reliability while supporting PHEV and BEV load;

· Consider how PHEV and BEV policies and tariffs impact natural gas vehicle policies and tariffs, and how the Commission's policies can be inclusive of both markets without "picking a technology winner";

· Consider how PHEV- and BEV-specific demand response programs may mitigate on-peak PHEV and BEV load impacts on the electric distribution system;

· Consider a default tariff requirement for time variant PHEV and BEV tariffs, and statutory changes, if any, that may be required to allow such tariffs;

· Consider expanding the applicability of utility residential time variant PHEV and BEV rates to commercial and public charging facilities, low-speed vehicle24 PHEVs and BEVs, and other electric-drive vehicle classes;

· Consider modifications to existing TOU rates for PHEV and BEV to make off-peak recharging more economically attractive at residential locations;

· Consider dynamic rate design options, vehicle charging regulations, and policy adjustments to incorporate PHEV and BEV charging with intermittent renewable energy supply, including, but not limited to, photovoltaic (PV) arrays over residential and commercial charging stations and off-peak charging to take advantage of overnight wind resources expected in the utility resource portfolio;

· Consider relevant pending state and federal regulations and legislation, including the California Air Resources Board Low Carbon Fuel Standard, California Senate Bill 626 (Kehoe), and the American Clean Energy and Security Act of 2009;25

· Consider standards and protocols needed for the deployment of "smart" PHEV and BEV charging infrastructure in California and the Commission's role, if any, in encouraging related standards; and

· Consider other issues suggested by stakeholders which we believe are needed to guide Commission policy related to PHEVs and BEVs.

5.1. Questions

We pose the following questions for all interested parties to address in comments filed in this proceeding. We also invite parties to identify additional issues that the Commission should consider in this rulemaking. Parties should identify the question to which they are responding.

Residential Charging Infrastructure and Policy

1. What types of residential metering arrangements are appropriate for PHEVs and BEVs and why? Should the Commission require a particular metering arrangement, or should it allow more flexibility in metering arrangements by investor-owned utilities or others? If so, why?

2. How will electric vehicle meters or sub-meters and EVSE's interact with the advanced meters currently being installed across the service territories of investor-owned utilities? What policies does the Commission need to consider concerning any such interaction?

3. What kinds of equipment and electrical improvements will typically be needed to support residential charging for PHEVs and BEVs, e.g., EVSE's, metering, electrical system upgrades? Who should pay for residential equipment and improvements required to support PHEVs and BEVs, and why?

4. What policies should the Commission adopt to encourage competition and innovation in the market for residential infrastructure development for PHEV and BEVs?

5. Should the Commission consider allowing utilities to invest in and rate-base residential electric vehicle charging in order to encourage and support early adoption of PHEVs and BEVs? If so, what components of the infrastructure should the utility be authorized to invest in, e.g., wiring upgrades, EVSE? Should utility investment continue once the market matures? What impact might this have on the competitive marketplace relating to electric vehicle charging infrastructure by non-utility entities?26

6. If a utility proposes to own customer-premises EVSE's, how will the Commission ensure that near-term EVSE and metering capital investments are interoperable with future generations of PHEV and BEV technology? 27

7. What approaches are there to provide PHEV and BEV charging for owners who do not have regular access to a garage for residential recharging (including single family dwellings and multiple dwelling units (MDUs) like apartments, condominiums, and duplexes)? What regulatory issues does the Commission need to address relative to infrastructure for such residents?

8. How can the Commission, in coordination with utilities, relevant state agencies, federal authorities, local governments, and other entities, streamline EVSE permitting, installation, and approval processes from the time of PHEV and BEV purchase to EVSE activation? What jurisdictional barriers should be assessed to achieve a streamlined permitting, installation, and activation process for residential EVSE?

Commercial and Public Charging Infrastructure and Policy

9. How should electricity used for PHEVs and BEVs be metered at commercial and public charging facilities?

10. Who should pay for commercial and public meters, EVSE, and related upgrades?

11. How should the Commission ensure that commercial and public charging facilities are cost-effective, openly-accessible, and interoperable with a Smart Grid system?28

12. Are additional building codes needed for residential, commercial and public charging facilities to supply sufficient electrical services to PHEVs and BEVs? What role, if any, can the Commission play in this regard?

13. What policies should the Commission adopt to facilitate competition and innovation in the commercial and public infrastructure market?

14. What issues need to be addressed related to the relationship between regulated electricity utilities and third-party electric vehicle service providers that are proposing and/or implementing charging services at residential, commercial and public locations?

Legal Issues Related to the Ownership and Operation of Charging Infrastructure

15. Under what circumstances are third-party electric vehicle service providers public utilities and/or electrical corporations pursuant to Pub. Util. Code § 216 and Pub. Util. Code § 218? What implications do Pub. Util. Code § 216 and Pub. Util. Code § 218 have on the competitiveness of the third-party electric vehicle service provider market? If the Commission has jurisdiction over third-party electric vehicle service providers, what is the appropriate level of regulatory oversight?

16. What statutory changes, if any, should the Commission propose to the legislature to encourage innovation and competition in the charging infrastructure market?

Codes and Standards

17. Please identify current and pending Society of Automotive Engineers vehicle design and interface technical requirements, the Underwriters Laboratory listed components and systems, and the National Electric Code, California Electric Code, and California Building Code Regulations that govern the installation, operation, and maintenance of charging infrastructure at the residential, commercial, and public charging EVSE. How does the timeframe for each code and standard adoption impact current and future vehicle and EVSE products? What role, if any, can the Commission play in improving or encouraging this process?

18. How important is consumer choice as to Charging Levels ((Level 1, 2 or DC)? If important, how may the Commission best balance driver and grid benefits for all residential, commercial, and public charging infrastructure?

19. What role can the Commission play to ensure EVSE compatibility with a unified EVSE conductive charge coupler standard (J1772) for all residential, commercial, and public charging EVSE within regulated utility service territories? What role can the Commission play to ensure that EVSE be forward-compatible with emerging Society of Automotive Engineers loads, messages, and programs communication standards (J2293, J2836, and J2847)?

Electrical System Impacts

20. What are the potential electrical distribution system impacts associated with geographically concentrated PHEV and BEV charging in the near-term? How will utilities anticipate these impacts and make capital investments needed to ensure service network reliability? How should the utility capital investments be paid for and recovered?

21. What commercial and public infrastructure options are most likely to be deployed, e.g., Level 1 charging facilities, Level 2 charging facilities, "service station" model DC charging facilities, and/or battery swap stations? Should the Commission adopt policies to favor certain charging options taking into consideration cost-effectiveness, grid benefits, ability to meet PHEV and BEV driver charging demand, and ability to reduce BEV driver "range anxiety"?29

22. What potential load shape impacts associated with PHEV and BEV charging should utilities anticipate in the near-term? How can time variant pricing, demand response programs, and advanced meters mitigate load spikes associated with uncontrolled, simultaneous charging found to occur at specific times of day, for example, when drivers arrive home from work? How should the Commission address potential load spikes if a large number of customers begin charging simultaneously when lower electricity rates apply under TOU rate schedules?

23. In the long term, what are the benefits and drawbacks on electric generation and transmission associated with projected PHEV and BEV market growth in California?

Tariff-related

24. Should the Commission authorize a default time variant electric vehicle rate applicable to all residential electric vehicle tariff customers? What changes, if any, to the rate protection provisions of AB-1X30 are needed to authorize a default time variant electric vehicle rate applicable to residential customers?

25. What rates should apply to customers charging their PHEVs or BEVs at commercial, industrial, and public charging facilities that are in the same service territory as their home utility?

26. What rates should apply to third-party operators of commercial charging facilities? Should the Commission establish new rates for commercial charging facilities taking into account the costs and benefits created by these entities?

27. How should a customer pay when charging a PHEV or BEV in another utility's service territory? Please evaluate options set forth below, or suggest alternative approaches:

    a. A customer pays a posted price for electricity to a specific electric charging provider at the time of the transaction, similar to how gasoline is purchased.

    b. The second utility bills the customer's home utility and the home utility adds the electric vehicle electricity cost to the customers' energy bill. A third-party clearing house could facilitate these transactions.

    d. A customer has a relationship with a third party charging provider and pays that third party wherever the customer charges.

    e. A customer has a choice of all or some of the above options.

28. What types of costs and benefits are generated by electric vehicle adoption on different aspects of the electricity system, including transmission, distribution and procurement costs?

29. Should the electric vehicle rate structure be designed to align rates with the system costs and benefits of PHEVs and BEVs, and if so, how? Should the Commission assign additional costs and benefits attributable to PHEVs and BEVs to specified electric vehicle rate classes or socialize the costs and benefits attributable to PHEVs and BEVs to all customer classes? Should the PHEV and BEV rate classes bear existing rate component costs?

30. Should the electric vehicle rates reflect the marginal cost of service, particularly for off-peak electricity charging and, if so, how?

31. Should rate incentives be created for electric vehicles to be paired with distributed generation incentive programs, such as the California Solar Initiative (CSI) and Self-Generation Incentive Program? Should rate incentives be created for electric vehicles to be paired with demand response programs? How should these incentive programs be incorporated into electric vehicle rate structures? Who should pay for such incentives?

32. Under what circumstances can utilities and third parties aggregate PHEV and BEV services to participate in California Independent System Operator (CAISO) ancillary service markets? What policies, if any, does the Commission need to consider in this regard?

Low Carbon Fuel Standard

33. What recommendations, if any, should the Commission make to the California Air Resources Board regarding the treatment of electricity under the Low Carbon Fuel Standard? 31

34. If a utility generates and sells credits under the Low Carbon Fuel Standard regulation due to customers' use of electricity as a transportation fuel, what should the utilities do with the revenue from the credits?

Programs and Incentives

35. Should utilities and/or government provide low-interest finance incentive programs for residential and commercial EVSE? Should these programs incorporate tax incentives available through the American Recovery and Reinvestment Act (ARRA) of 2009?32

36. Should utilities and/or government provide incentives that encourage customers to purchase higher-efficiency electric vehicles rather than less efficient electric vehicles, and if so, how should the incentives be structured?

37. How should the Commission ensure that any policies developed related to electric vehicles provide a level playing field for transportation fuels and technologies?

38. How could electric vehicle adoption impact other Commission policies and initiatives including the Renewable Portfolio Standard, the Long-Term Energy Efficiency Strategic Plan, energy efficiency goals, and zero net energy homes goals?33

Education and Outreach

39. What entities and programs best facilitate customer outreach and education regarding convenient and timely EVSE installation options and customer tariff education to ensure awareness of off-peak versus on-peak charging costs?

Scope

40. Should the Commission consider natural gas vehicles as part of this rulemaking, or consider natural gas vehicle issues through utility filed Application(s) and/or Advice Letter(s)? What are the near-term tariff, infrastructure, incentive programs or other issues that the Commission should address with respect to natural gas vehicles?

41. Should the Commission consider medium-duty electric vehicles, heavy-duty electric vehicles, and off-road electric vehicles as part of this rulemaking? If so, what issues specific to these vehicles should the Commission consider?

5.2. Proposed Schedule

The assigned Commissioner and/or Administrative Law Judge will, by subsequent ruling(s), provide additional scheduling details and may alter the schedule contained herein as they deem necessary. Consistent with Pub. Util. Code § 1701.5, we set a time period for resolving this rulemaking at 18 months as set forth in Pub. Util. Code § 1701.5.

Proposed Schedule

August 20, 2009

Issuance of Order Instituting Investigation.

October 5, 2009

Responses and Opening Comments addressing scope, schedule, and other procedural issues and responding to the questions above to be filed with the Commission.

November 6, 2009

Reply Comments to be filed with the Commission.

In addition to comments and rely comments responding to the questions set forth in Section 5, workshops and additional comments may be needed to establish a thorough record.  Following receipt of the initial comments and replies, we anticipate holding a prehearing conference.  At the prehearing conference, we will address scope and scheduling issues, including whether this rulemaking should be divided into two phases with the first phase addressing urgent matters. After the prehearing conference, the assigned Commissioner will issue a ruling refining the scope and procedural schedule.

22 "Meters" may include dual meter adapters, sub-meters, or second meters to measure electric vehicle electricity usage.

23 See fn. 11.

24 A "Neighborhood Electric Vehicle" (NEV) is defined as a "Low Speed Vehicle" (LSV) by the National Highway Traffic Safety Administration's (NHTSA) Federal Motor Vehicle Safety Standard (FMVSS) No. 500. Per FMVSS No. 500, http://avt.inel.gov/nev.html

25 California Air Resources Board, "Proposed Regulation to Implement the Low Carbon Fuel Standard Volume 1, Staff Report: Initial Statement of Reasons"
Appendix A at p. A-23/397, March 5, 2009. See, also, fn. 5.
http://www.arb.ca.gov/fuels/lcfs/030409lcfs_isor_vol1.pdf; Senator Kehoe, SB 626, February 27, 2009, ( http://info.sen.ca.gov/pub/09-10/bill/sen/sb_0601-0650/sb_626_bill_20090227_introduced.pdf); American Clean Energy and Security Act of 2009, § 121 (a) amendment of § 111 (d) of the Public Utilities Regulatory Policy Act of 1978 (16 U.S.C. 2621(d)) http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=111_cong_reports&docid=f:hr137.111.pdf.http://www.greencarcongress.com/2009/05/waxmanmarkey-20090517.html

26 Please define a "mature market" in your response. For example, "mass-market" could mean electric vehicles sold after 100,000 or another milestone figure of electric vehicles are registered in California markets.

27 For example, automakers currently exclude a second meter or sub-meter from planned factory-production PHEV and BEV models. Future vehicle designs may include an on-board meter with the currently available on-board vehicle charger and communication hardware and software.

28 See Energy Independence and Security Act, Title XIII § 1301, (characteristics and functions of a "smart grid") as cited in R.ulemaking 08-12-009, Order Instituting a Rulemaking to Consider Smart Grid Technologies Pursuant to Federal Legislation and on the Commission's own Motion to Actively Guide Policy in California's Development of a Smart Grid System, pp. 4-7.

29 For a definition of each charging option, please see Section 3.1. "Range anxiety" is sometimes defined as BEV driver concern over limited battery capacity to meet daily driving range or an extended trip of longer distance. Existing charging stations in California are mapped at http://www.evchargermaps.com.

30 Assembly Bill 1X, (Stats.2001-2002, 1st Ex. Sess., c. 4 (A.B.1), § 3, eff. Feb. 1, 2001), an act to amend Section 366.5 of, and to add Section 360.5 to, and to repeal Section 355.1 of, the Public Utilities Code, and to add Division 27 (commencing with Section 80000) to the Water Code, relating to electric power.

31 "For electricity used as a transportation fuel, the regulated entity under the Low Carbon Fuel Standard regulation is determined to be (A) the load-serving entity or provider of electricity services, (B) the electricity services supplier, (C) the owner and operator of the electric-charging equipment, and (D) the owner of a home with electric vehicle charging equipment." California Air Resources Board, "Proposed Regulation to Implement the Low Carbon Fuel Standard Volume 1: Staff Report: Initial Statement of Reasons," Appendix A, p. A-23/397, March 5, 2009, http://www.arb.ca.gov/fuels/lcfs/030409lcfs_isor_vol1.pdf. " `Credits' and `deficits' means the measures used for determining a regulated party's compliance with the average carbon intensity requirements in Sections 95482 and 95483. Credits and deficits are denominated in units of metric tons of CO2E." California Air Resources Board, "Proposed Regulation to Implement the Low Carbon Fuel Standard Volume 1: Staff Report: Initial Statement of Reasons," Appendix A, p. A-6/379, March 5, 2009.

32 Homeowners and utilities are eligible for the installation tax credit. The credit is up to 50% of the cost of electricity conduits for recharging. Conduit costs are a significant portion of the total EVSE cost; ARRA section 1131, http://www.irs.gov/pub/irs-drop/n-07-43.pdf, p. 211.

33 Load increase due to PHEV and BEV charging increases the renewable energy procurement requirement to meet the 20% and possible 33% Renewable Portfolio Standards. For example, load increases will also offset energy efficiency gains. However, PHEV and BEV load results in net emissions reductions that support California greenhouse gas emissions reductions goals. A typical PHEV user will use 2,900 kWh/year; a typical gasoline-powered vehicle user will use the equivalent of 10,000 kWh/year in gasoline usage, Mui, Simon, July 15, 2009 Smart Grid workshop. http://www.cpuc.ca.gov/NR/rdonlyres/6805C484-2439-495A-82DF-B7BF8F0853F8/0/SimonMuiNRDC.pdf

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