California is the fifteenth largest emitter of greenhouse gases, representing about 2% of worldwide emissions, and California's transportation sector is the largest contributor, consisting of 38% of the State's total greenhouse gas emissions.2 Passenger vehicles alone are responsible for almost 30% of California's greenhouse gas emissions.3 To address these vehicle emissions, the California Air Resources Board proposed a comprehensive three prong strategy, which includes the following: reduce greenhouse gas emissions from vehicles, reduce the carbon content of the fuel vehicles use, and reduce the miles vehicles travel.4 Electrification of vehicles is a critical component of this strategy.
Other programs intended to reduce greenhouse gas emissions from California's transportation sector include (1) the Pavley greenhouse gas vehicle standards (Assembly Bill (AB) 1493 Pavley, Stats. 2002, c. 200) to achieve near-term vehicle emission reductions to the maximum extent technologically feasible; (2) the Zero-Emission Vehicle (ZEV) program to transform the future vehicle fleet by placement of increasing numbers of ZEVs (including hydrogen fuel cell and battery electric vehicles) and thousands of near-zero emission vehicles (plug-in hybrids, conventional hybrids, compressed natural gas vehicles) in California; and (3) the Alternative and Renewable Fuel and Vehicle Technology Program (AB 118 Núñez, Stats. 2007, c. 750) to, among other things, develop, demonstrate, and deploy innovative technologies to transform California's transportation fuel and vehicle types. AB 118 also creates the opportunities for investment in technologies and fuels that will help meet the Low Carbon Fuel Standard established by the California Air Resources Board. The Low Carbon Fuel Standard seeks to reduce the carbon intensity of transportation fuels consumed in California. The California Energy Commission and the California Air Resources Board are coordinating closely in the implementation of AB 118.
We further acknowledge the coordinated efforts of numerous stakeholders. These efforts are needed if California's Electric Vehicle market is to progress beyond this initial stage. Utilities, electric vehicle service providers, automakers, automobile dealers, academic and research institutions, and government at all levels must work collaboratively to smooth the way for success.
As part of the process to facilitate a collective effort, the Commission is an active participant in the California Plug-In Electric Vehicle Collaborative, a broad-based stakeholder group established in 2010. Last year, representatives of the Commission assisted the California Plug-In Electric Vehicle Collaborative to develop a strategic plan. The plan, entitled Taking Charge: Establishing California Leadership in the Plug-in Electric Vehicle Marketplace, 5 provides a roadmap for Electric Vehicle market growth consistent with California's transportation, energy, environmental and economic goals. Representatives of the Commission are currently participating in working groups created by the California Plug-In Electric Vehicle Collaborative to implement the strategic plan's recommendations.
In adopting prospective policies for Electric Vehicles today, we have looked to the goals of this strategic plan. These goals, if achieved, should propel the Electric Vehicle market forward. They include the following:
1. Ensure that consumer experiences with Electric Vehicles are overwhelmingly positive;
2. Promote Electric Vehicle cost reductions such that they are cost competitive with conventional vehicles;
3. Integrate Electric Vehicle charging smoothly into an increasingly clean, efficient, reliable, and safe electricity grid;
4. Advance energy security, air quality, climate change, and public health goals;
5. Take early strategic action to promote Electric Vehicle-related job creation and economic benefits in California; and
6. Facilitate mainstream adoption of Electric Vehicles.
We believe these are sound principles to guide us in developing policies for Electric Vehicles. Of course, we also weigh prospective policies for Electric Vehicles in the context of our responsibility to ensure just and reasonable utility rates.
As Californians increasingly adopt Electric Vehicles, the electric utilities that the Commission regulates, including Pacific Gas and Electric Company (PG&E), Southern California Edison Company (SCE), and San Diego Gas & Electric Company (SDG&E),6 will take on a critical role in the transportation sector to procure, deliver and supply transportation fuel, in this case electricity. Therefore, with input from a wide range of stakeholders, today we address the most critical and time-sensitive issues to support California's Electric Vehicle market from now through approximately 2013.
At this time many uncertainties surround the evolving market for Electric Vehicles and charging services. Business models are evolving and technologies are in flux. Consumer acceptance of the new generation of Electric Vehicles is unproven and charging behavior is unknown. In particular, the extent to which Electric Vehicle owners will charge off-peak versus on-peak and how Electric Vehicle owners will respond to various time-of-use rate designs are speculative.
Today's decision adopts policies for the initial phase of the Electric Vehicle market's evolution. We have elected to pursue a minimally prescriptive approach in order to stimulate innovation, encourage entry, and promote customer acceptance, while maintaining safe and reliable utility service. Given today's fluid market conditions we seek to learn from experience and avoid foreclosing options. For example, we decline to make significant changes to existing Electric Vehicle rates or mandate specific equipment requirements at this time. We also seek to narrow uncertainties and build a sound empirical basis to support policy formation for subsequent stages of Electric Vehicle market development.
Today's decision also builds upon our policies set forth in the first decision issued in this proceeding, Decision (D.) 10-07-044,7 where we found that the provision of electric vehicle charging services does not make an entity a public utility and that electric vehicle service providers8 are, with certain exceptions, end-use customers of a regulated utility.9 Within this context, we seek to establish a process to notify utilities of the purchase of Electric Vehicles so that utilities can plan infrastructure upgrades accordingly. We also address Electric Vehicle rate design principles, related cost recovery issues, Electric Vehicle metering options, utility-Electric Vehicle education and outreach, and the use of smart charging technologies for Electric Vehicles.
Generally speaking and for the purpose of this decision, "near-term goals" refers to those needing attention by the end of 2012. We anticipate revisiting the longer-term goals identified in the decision after obtaining data that we require utilities to collect based on real-life experiences with Electric Vehicles and from the utilities' Electric Vehicle load research.
2 Climate Change Scoping Plan, A Framework for Change, Pursuant to AB 32, the California Global Warming Solutions Act of 2006 (herein ARB's 2008 Scoping Plan) at 11, adopted by the California Air Resources Board on December 11, 2008. The ARB 2008 Scoping Plan is available at: http://www.arb.ca.gov/cc/scopingplan/document/scopingplandocument.htm.
3 ARB's 2008 Scoping Plan at 38.
4 ARB's 2008 Scoping Plan at 38.
5 Plug-in Electric Vehicle Collaborative, Taking Charge: Establishing California Leadership in the Plug-in Electric Vehicle Marketplace, December 2010 (herein "Strategic Plan"). http://www.evcollaborative.org/evcpev123/wp-content/uploads/2010/07/Taking_Charge_final2.pdf.
6 The named electric utilities, in addition to gas utilities, are respondents to this rulemaking.
7 Applications for Rehearing of D.10-07-044 were filed by TURN and PG&E. These applications are pending before the Commission.
8 Electric vehicle service providers or EVSPs are providers of electric vehicle charging services and could include owners of stand alone electric vehicle charging spots.
(D.10-07-044 at 3.)
9 D.10-07-044 at 20.