BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 631
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          Date of Hearing:   April 11, 2011

                    ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
                               Steven Bradford, Chair
                   AB 631 (Ma) - As Introduced:  February 16, 2011
           
          SUBJECT  :   Public utilities: electric vehicle charging stations.

           SUMMARY  :   States that a facility that supplies electricity to 
          charge electric vehicles is not a California Public Utilities 
          Commission (PUC)-regulated "public utility."   

           EXISTING LAW  :

          1)The State Constitution permits the PUC to fix rates and 
            establish rules for all public utilities and includes the 
            furnishing power as a public utility, subject to control by 
            the Legislature.

          2)Includes electrical corporations in the definition of "public 
            utility."

          3)Requires the PUC to evaluate policies to develop 
            infrastructure sufficient to overcome any barriers to the 
            widespread deployment and use of plug-in hybrid electric 
            vehicles (PHEVs) and electric vehicles (EVs), and adopt rules 
            by July 1, 2011.

           FISCAL EFFECT  :   Unknown.

           COMMENTS  :   According to the author, "one of the biggest 
          customer concerns about purchasing an electric vehicle is 'range 
          anxiety'.  Customers are concerned about where they can charge 
          the electric vehicle away from home which often times mean they 
          may not travel too far from home."  The author states, "without 
          adequate infrastructure, consumers will be reluctant to purchase 
          electric vehicles.  California's electric vehicle infrastructure 
          is not yet robust enough to support the predicted growth of 
          electric vehicle adoption in the state, and there is a need for 
          electric vehicle infrastructure to drive the market for electric 
          vehicles."

          The author introduced AB 631 to put into law a recent decision 
          by the PUC to not regulate electric vehicle charging stations as 
          utilities.  According to the author, "absent this bill, the 








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          needed charging stations won't exist.  Apartment complexes, 
          parking garages, and commercial buildings will not want to 
          install these stations if they are regulated as a public 
          utility.  They don't want to assume the regulatory burden of 
          hiring lawyers in order to invest in expanding infrastructure."  


          The PUC has an open proceeding (R.09-08-009) to consider the 
          impacts of the electrification of vehicles on the grid and how 
          to manage those impacts.  A proposed decision in that proceeding 
          concludes that entities selling electricity at retail for 
          electric vehicle charging are  not  public utilities within the 
          meaning of PUC Section 216.  The author agrees that businesses 
          providing the service to fuel electric vehicles should not be 
          held to the same rigor as a public utility.  Consequently, this 
          bill codifies that decision.

           Background  : The California Energy Commission (CEC) published its 
          2010-2011 Investment Plan for the Alternative and Renewable Fuel 
          and Vehicle Technology Program report, which notes that in the 
          United States, and in California, 95 percent of vehicles are 
          dependent on petroleum-based fuels.  In 2008, California's 
          transportation sector consumed about 15 billion gallons of 
          gasoline and more than 3 billion gallons of diesel fuel.  This 
          sector represents approximately 40 percent of the state's 
          greenhouse gas emissions, the largest amount from any sector.

          In January 2011, President Obama set an ambitious goal of 
          putting 1 million advanced technology vehicles on the road by 
          2015, which would reduce dependence on foreign oil and lead to a 
          reduction in oil consumption of about 750 million barrels 
          through 2030.

          Because of California's aggressive climate change goals, the 
          state has become one of the most attractive markets for EVs.  A 
          vigorous new EV industry has the potential to fuel economic 
          growth by creating jobs and building on the hub of EV technology 
          and manufacturing companies headquartered in the state.  The CEC 
          projects the number of electric vehicles could grow from 32,756 
          in 2011 to 1.5 million by 2020 and 2.8 million by 2030. Most of 
          the jobs created directly by the state's EV rollout will be in 
          technology, manufacturing, installation, and support services, 
          all provided locally.

          Despite existing EV goals, it has been represented by some 








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          parties that consumers are unlikely to adopt EVs unless they are 
          as convenient to own as the gasoline car.  Without market 
          solutions, California may not reap the environmental and 
          economic benefits of electric vehicles. Encouraging consumer 
          adoption, innovation and investment is the key to driving future 
          growth of low to zero emissions vehicle markets.

          1)PUC Rulemaking  :  The PUC has taken the first step in 
            encouraging solutions for EVs.  In
          2009, the PUC opened a rulemaking (R-09-08-009) to consider 
          infrastructure, rates, and policies to support EVs.  The 
          rulemaking also addressed the requirements of SB 626 (Kehoe) 
          Chapter 355, Statutes of 2009, which requires the PUC, in 
          consultation with the CEC, the Air Resources Board, electrical 
          corporations, and the motor vehicle industry, to evaluate 
          policies to develop infrastructure sufficient to overcome any 
          barriers to the widespread deployment and use of PHEVs.  SB 626 
          requires the PUC to adopt rules by July 1, 2011.

          On July 29, 2010, the PUC issued a decision on Phase I of the 
          rulemaking.  The PUC ruled that the ownership or operation of a 
          facility that sells electricity at retail to the public for use 
          only as a motor vehicle fuel does not make the corporation or 
          person a "public utility" within the meaning of the Public 
          Utilities Code.  

          Phase II of the rulemaking will consider the appropriate utility 
          role: 1) in the provision of electric vehicle charging services 
          to the public; 2) with respect to charging equipment on the 
          customer's side of the meter, and 3) in cost allocation, 
          including a consideration of the circumstances in which the 
          costs of any distribution system upgrades should be borne by an 
          individual customer or be recoverable from all customers, in 
          addition to other related issues.  The Phase II decision is 
          expected to be released soon. 

          3)   Legislative oversight  :  On May 24, 2010, the Assembly 
          Transportation Committee and this committee held a joint hearing 
          to explore the requirement that manufacturers produce and 
          deliver electric vehicles for sale in California as a greenhouse 
          gas reduction method.  One of the concerns raised was how rates 
          would be set to encourage the efficient use of the electricity 
          infrastructure when recharging EVs.  Another issue was how 
          California should address a market for retail electricity at 
          remote public or private re-charging stations. 








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          The hearing revealed that some companies are currently providing 
          electricity for plug-in electric vehicle hybrid owners to 
          re-charge at non-residential based locations.  For example, 
          Coulomb Technologies, Inc. provides networked charging stations 
          throughout the U.S. and some European locations. Each station is 
          embedded with an on-board computer, a fluorescent display, a 
          radio-frequency identification (RFID) reader, and a 
          utility-grade meter that provides precise, bi-directional energy 
          measurement.  The customer scans his or her RFID card to 
          re-charge, and can access their energy usage and communicate 
          over the network for demand-side management, preferred pricing 
          incentives, and other mechanisms. Another company, Better Place, 
          provides charging points and battery-exchange stations.  In 
          November 2008, the mayors of San Francisco, Oakland, and San 
          Jose, signed up Better Place to deliver the charging 
          infrastructure to the Bay Area.  Their goal is to have 250,000 
          charging ports, 200 battery-exchange stations, and a control 
          center to service Bay Area electric car drivers. The cost is 
          estimated at $1 billion.  They started work in January 2009 and 
          hope to have full commercial availability of the electric cars 
          by 2012. 

          The CEC testified that California has 413 charging stations with 
          1,300 public access electric charge points.  Many of the 
          existing charging stations need to be upgraded to charge the new 
          plug-in hybrid electric vehicles.  However, the CEC did not 
          address how this would be funded.  The CEC reported that it has 
          already issued about $15.3 million in grants for charging 
          stations.   

           4)Putting the cart before the horse  :  Several parties have 
            expressed concerns with the bill. 
          Pacific Gas and Electric claims this bill "undermines 
          legislative and PUC efforts to minimize electric grid impacts, 
          reduce greenhouse gas emissions and the need for new generating 
          capacity and foster the integration of renewable energy."  
          Southern California Edison (SCE) argues that the bill is 
          premature because the market for EV's is still in its infancy 
          and it is too soon to prejudge the best regulatory construct.  
          Moreover, SCE states that the PUC is already addressing these 
          early market issues in its EV proceeding and has proposed to 
          establish a working group to bring together federal and state 
          agencies, as well as other stakeholders to discuss appropriate 
          regulation.  The California Electric Transportation Coalition 








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          claim "the issues surrounding the decision by the PUC, codified 
          AB 631, are directly related to the issue of how the entities 
          identified in AB 631 will be regulated and by whom. Without the 
          benefit of the completion of the PUC proceeding and an 
          understanding of customer and ratepayer protection as determined 
          by the proceeding, this bill is premature".  
           
           5)Previous Legislation  :  Last year, SB 1435 (Padilla) would have 
            codified that electric vehicles
          are not a "public utility" consistent with the PUC decision; 
          however, it made a finding that the PUC should exercise limited 
          jurisdiction over third-party PHEV providers to ensure effective 
          load management.  This committee clarified that this "limited 
          jurisdiction" in no way provides explicit or implicit authority 
          over the business practices of the recharging facilities.  
          "Limited jurisdiction" would allow the PUC to adopt a separate 
          tariff structure for the investor-owned utilities to apply 
          toward third-party recharging facilities that achieve the goals 
          and objectives of discouraging electric vehicle charging during 
          peak times. This bill died in the Assembly.

           REGISTERED SUPPORT / OPPOSITION  :   

           Support 
           
          Alliance of Automobile Manufacturers
          Better Place
          California Apartment Association (CAA)
          California Business Properties Association
          California Manufacturers and Technology Association (CMTA)
          California Retailers Association (CRA)
          Coulomb Technologies, Inc.
          ECOtality, Inc.
          Environmental Defense Fund
          Plug In America
          Western States Petroleum Association (WSPA)

           Opposition 
           
          California Electric Transportation Coalition (CalETC)
          Pacific Gas and Electric (PG&E)
          Southern California Edison (SCE)
           
          Analysis Prepared by  :    Gina Adams / DaVina Flemings / U. & C. 
          / (916) 319-2083 








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