3. Positions of Parties
3.1. Southern California Gas Company and San Diego Gas & Electric Company
Southern California Gas Company (SoCalGas) and San Diego Gas & Electric Company (SDG&E) (collectively SEU) conclude that electric vehicle2 charging is not a public utility service. SEU cites to D.91-07-018 and D.91-07-0173 for authority to support its argument, which is that the sale of electricity for the sole use as a transportation fuel is not "power" under the Public Utilities Code. SEU also urges that the Commission place the following issues in Phase 2 for immediate consideration: (1) changes to the Electric Tariffs Rule 18 of Southern California Edison Company (SCE) and Pacific Gas and Electric Company (PG&E) and Rule 194 of SDG&E's tariff to accommodate electric vehicle service providers and (2) development of tariffs to offer services to electric vehicle charging customers. SEU recommends workshops to determine the role of the utilities in owning and operating electric vehicle charging infrastructure, both residential and commercial/public charging.
3.2. PG&E
In contrast to SEU, PG&E submits that entities providing electric vehicle charging are public utilities under Section 216. PG&E cites to California Supreme Court cases Greyhound5 and Richfield6 for the proposition that entities providing electric vehicle charging fall within the "dedication to public use" standard. PG&E also addresses its preferred level of regulation. It suggests that flexible regulation or light-handed regulation is appropriate, including non-price regulation of safety, inter-operability, and reliability of equipment and services. PG&E further suggests no need exists for traditional cost-based regulation of pricing, as long as no market power is demonstrated. PG&E also raises the potential that the Federal Energy Regulatory Commission (FERC) would have exclusive jurisdiction over electricity sales to retail entities under the Federal Power Act, 16 U.S.C. §§ 791 et seq., unless FERC disclaims such jurisdiction, citing to Order Disclaiming Jurisdiction, Docket No. ER94-775-000 (April 2, 2001).
3.3. SCE
Similar to PG&E, SCE argues that the Commission does not have the authority to exempt from regulation entities that SCE describes as, clearly public utilities and load-serving entities under the code. According to SCE, legislation is needed to exempt the retail sale of electricity for use as transportation fuel but that the Commission has discretion to determine the appropriate level of regulatory oversight. SCE suggests the Commission treat entities that provide electric vehicle charging as Electric Service Providers (ESPs).7 SCE claims the ESP designation will ensure that entities providing electric vehicle charging operate on a level playing field with investor owned utilities under Tariff Rule 22.8 As another possibility, SCE suggests the Commission regulate the sales of electricity to retail customers at regulated rates, terms and conditions under SCE's Tariff Rule 18. SCE echoes PG&E's concern that in the absence of
Commission-regulated rates, a utility's sale of electricity to an electric vehicle charging provider would be subject to the exclusive jurisdiction of FERC. SCE also takes the position that no regulation is required if entities providing charging services sell no electricity but just the charging equipment and retain no ownership, management, control or operation of such equipment.
3.4. Sacramento Municipal Utility District
Sacramento Municipal Utility District's (SMUD) position is that the Commission should regulate entities providing electricity for electric vehicle charging. In the absence of Commission regulation, SMUD sees complications for infrastructure planning to accommodate electric vehicle growth. According to SMUD, if electricity is sold at a profit, utility status is required. In SMUD's view, regulation depends on the nature of the product sold or the manner of the delivery of the electricity. SMUD believes that exempting electric vehicle charging from regulation would not promote orderly and reliable development of charging. SMUD draws a distinction between electricity and natural gas. SMUD points out that natural gas must be processed (value-added) before it is used as a vehicle fuel and argues that, in the absence of value-added, which does not exist with electricity, regulation is mandated. One exception noted by SMUD is that battery swapping provides a value-added component but charging directly from the grid does not. SMUD notes the importance of imposing the right "rate design" on electric vehicle charging service providers to incent
off-peak charging, which, in SMUD's view, cannot be done if fully unregulated.
3.5. EV Service Provider Coalition
The EV Service Provider Coalition, consisting of Better Place, Coulomb Technologies, Inc. (Coulomb), and Ecotality/eTec, submitted a joint pleading. They claim that the Commission has no jurisdiction over electric vehicle charging service providers that offer electricity as a form of transportation fuel. This coalition supports the analysis in the Scoping Memo and states that
over-reaching jurisdiction will stifle competition, innovation and investment in the industry. They suggest the Commission adopt tariff rules to facilitate the provision of electric vehicle services in a manner that is as convenient and seamless as possible.
3.6. Better Place
Better Place also submitted its own brief. In its brief, Better Place expands upon topics addressed in its joint brief filed with the EV Service Provider Coalition. Better Place reiterates that charging should not be regulated but recognizes the diversity in business models makes determining the boundary between utility/non-utility service difficult. Better Place also submits that no evidence exists of the Legislature's intent to regulate electric vehicle charging. Better Place concludes that electric vehicle charging equipment is not electrical plant because it is not used to deliver "light, heat or power" and, in adopting this interpretation, Better Place relies heavily on D.91-07-018 and cites to
Section 740.39 for support. Better Place argues that the Commission's prior conclusion that natural gas used as a vehicle fuel is not used for "power" in the sense intended by statute is applicable in the case where electricity is used to charge an electric vehicle battery. Better Place further points out that, like compressed natural gas providers, electric vehicle service providers deploy money, time, effort and technology to provide their customers a service, and do not simply sell a commodity. In terms of next steps for this proceeding, Better Place suggests workshops to refine the "exact boundary" of where the responsibility of the investor owned utility ends and the charging providers begins and to refine Rule 18 and Rule 19.
3.7. Coulomb Technologies, Inc.
Coulomb expands upon topics addressed in its joint brief filed with the EV Service Provider Coalition to emphasize that the Commission should support the Scoping Memo position that the Commission does not have the regulatory authority regarding the price that an electric vehicle charging facility operator charges for services or other aspects of operation of such facilities. According to Coulomb, only this outcome will enable a market that will encourage competitive market forces to bring benefits to consumers and ensure rapid deployment of the charging infrastructure. Coulomb argues that by treating a charging station as competitive access to the grid as opposed to being a regulated utility, the Commission can foster competition in the nascent infrastructure marketplace and help facilitate rapid deployment.
3.8. Clean Energy Fuels Corporation
Clean Energy Fuels Corporation (Clean Energy), a provider of vehicle compressed natural gas, offers reasons why natural gas vehicles need to be addressed in this proceeding. It argues that the regulatory framework should err on the side of facilitating the development of robust and vibrant competition in the California alternative fueled vehicle marketplace. As such, no regulation of entities providing electric vehicle charging is appropriate, all pricing should be cost based, and investor owned utilities should not be permitted to rate base "behind the meter" home refueling and charging investment.
3.9. Western States Petroleum Association
Western States Petroleum Association (WSPA) argues that entities providing electric vehicle charging are not public utilities. Instead, it suggests that Rules 18 and 19 apply and that the Commission consider modifying Rules 18 and 19 to provide for the resale of utility power by an electric vehicle service provider for transportation fuel purposes. WSPA finds that electricity as a transportation fuel does not constitute "power" under the code. WSPA also points out that the Legislature did not include the word "fuel" or "automobile fuel" when defining "electric plant" and argues, therefore, that the provision of vehicle fuel is not a utility service. WSPA further states that the regulation of electric vehicle service providers would be contrary to the purpose of public utility regulation - the protection of consumers from monopoly abuses - and to California's policy goal of developing an electric vehicle infrastructure. The future diversity of transportation fuels, WSPA claims, argues against the existence of monopoly service or the need for regulations.
3.10. Division of Ratepayer Advocates
The Division of Ratepayer Advocates (DRA) focuses on "dedication to public use," the implicit requirement that applies before finding an entity is a public utility. DRA finds that entities providing electric vehicle recharging satisfy the "dedication" requirement but DRA advocates for a light-handed regulation that focuses on safety, rates, terms and conditions of service, and impact on the electric grid. DRA is concerned about on-peak charging and suggests that, if these entities are not regulated, the Commission will not be able to control peak use. DRA suggests workshops to develop tariff language to discourage on-peak charging. In its reply brief, DRA contends that, if investor owned utilities are permitted to enter into the electric vehicle service provider market, investor owned utilities should be prohibited from recovering their related expenses and capital from ratepayers.
3.11. The Utility Reform Network
The Utility Reform Network (TURN) argues that entities that provide electric vehicle charging offer a utility service and that legislative action is required to change the situation. TURN contends that the analogy to natural gas vehicles (NGV) must take into consideration that Senate Bill (SB) 547 was pending when the Commission issued D.91-07-017 and D.91-07-018 finding NGV fuel sales outside of its jurisdiction. According to TURN, the fact that legislation was passed confirms that the Legislature believed that entities reselling natural gas as a vehicle fuel were public utilities, otherwise the Legislature would not have passed the bill exempting NGV from jurisdiction. While the Commission holds regulatory authority, TURN suggests the Commission use light regulation similar to competitive gas storage providers. TURN did not specifically describe the aspects of gas storage regulation that would be appropriate here.
3.12. Natural Resources Defense Council and Friends of the Earth
Natural Resources Defense Council (NRDC) and Friends of the Earth (FOE) claim that the Commission has and should retain jurisdiction because of the potential increased risk associated with the use of inefficient peak power and unintended impacts to grid management. They rely on the plain language of the Public Utilities Code to argue that electric vehicle charging renders an entity subject to public utility regulation but also express their preference for
light-handed regulation. Looking ahead, they explain that regulation must be mindful of the possibility that electric vehicle charging entities will provide ancillary services to support the grid, energy storage services, charge management aggregation services, and "solar to electric vehicle."
3.13. Californians for Renewable Energy and North Coast Rivers Alliance
Californians for Renewable Energy (CARE) and North Coast Rivers Alliance (NCRA) state their preference for regulating electric vehicle charging but prefer "limited, non-pricing regulation." CARE and NCRA suggest that a determination that no regulation is appropriate would require legislative action and, in reply briefs, these parties suggest that the Commission create a new customer class for electric vehicle service providers to control rates.
3.14. Interstate Renewable Energy Council
Interstate Renewable Energy Council (IREC) argues that the Commission has no jurisdiction over transactions involving the sale of electricity when a private relationship exists between provider and customer, such as landlord/tenant; shopping center/customer; hotel/guest but admits that the more difficult question to address is the Commission's jurisdiction over public charging spots. IREC notes the lack of information on business models for entities providing electric charging services and finds that this, while not surprising due to the nascent state of the electric vehicle market, makes it difficult to propose solutions to the jurisdiction issue. IREC further notes that Commission jurisdictional analyses are highly fact based. As such, IREC recommends a cautious approach while also proposing that the Commission provide some assurance that in certain situations, electric vehicle charging will be free from Commission regulation. For example, IREC cites to Story v. Richardson, (1921) 186 Cal. 162,10 for the proposition that landlords serving tenants have not dedicated their service to the public. In its reply brief, IREC refers to Rule 18 and Rule 19 as a way to accommodate "resale" by electric vehicle service providers.
3.15. Green Power Institute
Green Power Institute claims that vehicle electrification represents an opportunity to convert transportation to run on renewable sources of energy, assuming that the electricity has a significant renewable component. As a result, Green Power Institute points out that a key consideration will be tariffs applicable to charging entities. Green Power Institute does not support extending the Commission's jurisdiction to electric vehicle service providers.
3.16. Environmental Defense Fund
Environmental Defense Fund supports excluding providers of electric vehicle charging services from regulation as public utilities and focuses on the need for innovative rate structures to achieve environmental goals.
2 All references to the term "electric vehicles" refer to light-duty passenger plug-in hybrid electric vehicles and battery electric vehicles.
3 In D.91-07-018 and D.91-07-017, cases involving requests by PG&E and SDG&E, respectively, to expand their natural gas vehicle program, the Commission found that natural gas fuel providers are not subject to Commission jurisdiction. The Commission made analogous findings in both decisions. These findings, as set forth in D.91-07-017, are reproduced below:
Findings of Fact
18. Persons operating service stations for the sale of CNG [compressed natural gas] for use solely as a motor vehicle fuel, other than those who are public utilities by reason of operations other than operating a service station, are not subject to regulation by this Commission. Those persons may sell CNG as a motor vehicle fuel at prices they deem appropriate.
19. Our jurisdiction on CNG sales is limited to SDG&E's side of the meter and the connection to the service stations' side of the meter.
4 Tariff Rule 18 and Rule 19 are entitled "Supply to Separate Premises and Use by Others," and govern whether and how electricity delivered to a utility end-use customer can be redelivered and/or resold by the customer.
5 In Greyhound Lines, Inc. v. Public Utilities Comm. (1968) 68 Cal.2d 406, the Supreme Court affirmed the findings of the Commission on "dedication to public use" of a commuter bus service, stating: "The various indicia of dedication are not uniformly applicable to different utilities or uniformly useful in answering different questions, and the scope of dedication is not determined by mechanical formulas but ultimately by the fact that the utility has dedicated its resources to a particular enterprise, venture, or undertaking."
6 In Richfield Oil Corp. v. Public Utilities Comm. (1960) 54 Cal.2d 419, the Supreme Court annulled the order of the Commission finding dedication of an oil company to public use by providing service to selected customers under contracts, stating "... the Legislature by its repeated reenactment of the definitions of public utilities without change has accepted and adopted dedication as an implicit limitation on their terms."
7 Pub. Util. Code § 216(h). An ESP is an entity that provides electric supply services to Direct Access customers within an investor owned utility's service territory. An ESP may also provide certain metering and billing services to its Direct Access customers. ESPs remain subject to the Commission's specific jurisdiction over procurement-related obligations and consumer protections.
8 Electric Tariff Rule 22 governs Direct Access service to ESPs.
9 Section 740.3(a) provides, in pertinent part, as follows: "The commission, in cooperation with the State Energy Conservation and Development Commission, the State Air Resources Board, air quality management districts and air pollution control districts, regulated electrical and gas corporations, and the motor vehicle industry, shall evaluate and implement policies to promote the development of equipment and infrastructure needed to facilitate the use of electric power and natural gas to fuel
low-emission vehicles."
10 In Story v. Richardson (1921) 186 Cal. 162, the Supreme Court found "The test to determine a public use is whether the public has a legal right to the use, which cannot be gainsaid, or denied, or withdrawn, at the pleasure of the owner. The essential feature of a public use is that it is not confined to privileged individuals, but is open to the indefinite public. It is this indefiniteness or unrestricted quality that gives it its public character."
