BILL ANALYSIS Ó
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THIRD READING
Bill No: AB 631
Author: Ma (D)
Amended: 6/1/11 in Assembly
Vote: 21
SENATE ENERGY, UTILITIES & COMMUNIC. COMM. : 9-0, 7/5/11
AYES: Fuller, Berryhill, Corbett, De León, DeSaulnier,
Pavley, Simitian, Strickland, Wright
NO VOTE RECORDED: Padilla, Rubio
ASSEMBLY FLOOR : 74-1, 6/3/11 - See last page for vote
SUBJECT : Public utilities: electric vehicle charging
stations
SOURCE : Author
DIGEST : This bill exempts from the definition of a
public utility a facility that supplies electricity to the
public only for use to charge light duty plug-in electric
vehicles.
ANALYSIS : Existing law defines a public utility as a gas
corporation, electrical corporation, telephone corporation,
telegraph corporation, water corporation, sewer system
corporation, and heat corporation, where the service is
performed for, or the commodity is delivered to, the public
or any portion thereof.
Background
CONTINUED
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Plug-in electric vehicles (PEVs) & Charging . Within the
next five years automakers are expected to release 10 to 15
PEV models into California's new car market. Those PEVs
will need a reliable electric charging infrastructure at
home and in public which can accommodate the unique fueling
needs of these vehicles.
Although PEVs can actually be plugged in to a standard home
outlet for charging (referred to as Level 1), that mode can
take as long as 20 hours to get a full charge (e.g. Nissan
Leaf). Most PEV owners will want to have a Level 2 charger
installed at home to bring the charging time down to four
to eight hours. Level 2 and Level 3 (which can charge in
less than 30 minutes) chargers will be installed in public
locations and at many workplaces to accommodate charging
needs away from home when the PEV can't quite get to its
location and back again and to also relieve "range anxiety"
for the PEV owner.
However, unlike traditional vehicle fuel, every time a PEV
is plugged into a Level 2 or Level 3 charger, that charging
has a ripple effect across the distribution and
transmission grid and therefore affects all ratepayers.
The charging of that PEV at Level 2 is equivalent to adding
a new house onto the distribution grid.
Grid Impacts . In 2010 a group of U.S. and Canadian power
grid operators who manage most of the North American bulk
electric grid collectively studied the effect that PEVs
would have on the electric power grid. The study was
modest in its assumptions of 1 million PEVs nationwide in
the next 10 years. California is planning on one million
PEVs in this state alone. However the study is
illustrative of the impacts that can be expected. Among
the study's conclusions:
One million PEVs may be on U.S. roadways in a decade,
with concentrations of the vehicles in the major
metropolitan areas of the West Coast and the Northeast.
Staggered charging of PEVs will reduce the potential
negative impact on electric load.
Power companies will need new tools to manage growth in
PEV use.
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The study also included a very modest estimate of the
number of PEVs for the LA area which "is projected to
experience the largest growth of PEVs, a total 119,069 by
2019. PEVs in the Los Angeles region could add electric
load of 658 MW if every PEV charged simultaneously. If PEV
charging were staggered over an eight-hour period, electric
load would increase by 147 MW. Over a 12-hour period, PEV
charging will add 98 MW."
Consequently, the deployment of PEVs will place new demands
on the state's electric system but managed properly that
demand can benefit ratepayers and car owners alike. The
electric utilities have not experienced a greater impact on
the electric grid since air conditioners were introduced
into residential and commercial structures. Grid managers
are not exactly certain of how the success of PEVs might
impact the grid and not certain of what tools may be
necessary to mitigate the impacts.
If that service is not managed efficiently it will cost all
ratepayers in the form of higher electric rates, and
diminish the environmental benefits of PEVs by increasing
greenhouse gas and other emissions associated with the
generation of electricity at peak demand.
However, a well-planned electric vehicle (EV) charging
infrastructure and charging behaviors can ensure that the
distribution grid has the capacity necessary to handle the
charging of the vehicles and can also shift a significant
amount of charging to off-peak times. The result is that
the need for additional power plants is minimized and the
utilization of existing plants is increased.
More critically, if substandard charging units start to
proliferate in public places, EV car owners will not be
able to successfully charge their vehicles and get
frustrated. Their experience could dampen the successful
deployment of PEVs into the marketplace. Additionally, an
improperly installed charging unit can disrupt power
(typically caused by a blown transformer) and literally
turn off the lights in the immediate vicinity of the
charging unit.
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Benefits of PEVs to Electric Grid . According to the Public
Utilities Commission (PUC), off-peak charging places less
strain on the distribution system, avoiding adverse impacts
to the electric grid and reducing the need for costly
infrastructure upgrades. Concentrating PEV charging in
off-peak periods will also dampen increases in energy
procurement costs resulting from the addition of this new
load. Not only is energy more expensive during peak
periods, but significant levels of on-peak charging could
actually increase incremental procurement costs by exerting
upward pressure on peak-time wholesale energy prices.
Spreading fixed capacity costs over a larger volume of
energy sales has the beneficial effect of lowering the
average cost of providing electricity service for all
customers. Off-peak charging also delivers greater
environmental benefits since substituting electricity for
petroleum-based transportation fuels yields greater
reductions in carbon emissions and other pollutants during
off-peak periods.
This is because the marginal generating units available
during off-peak hours tend to be cleaner and/or more
efficient than peaker plants. Finally, night-time charging
facilitates' integration of wind energy by using the
storage capacity of the PEV batteries transform
California's predominantly nocturnal wind power resources
into transportation fuel for daytime driving. Currently
much of the wind capacity in California generates
electricity off-peak. In addition to being low emission,
wind generation is not designed to ramp down to accommodate
additional wind output. By creating a new use for off-peak
generating resources, off-peak charging could help address
challenges posed by wind generation.
PEV Charging Need & Range Anxiety . From the standpoint of
the electric grid, the hope is that PEV owners primarily
utilize home charging but this is of course not realistic
for all charging needs. In order to ensure the successful
deployment of the vehicles there must be options for PEV
owners to charge their vehicles away from home. According
to the strategic plan of the California Plug-In Electric
Vehicle Collaborative:
Availability of charging stations outside of the home may
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play an important role in developing PEV markets.
Well-placed nonresidential (public) charging stations at
workplaces, businesses, curbsides, destination or transit
station parking lots, highways, or elsewhere, would provide
added visibility for PEVs, convenience and value for PEV
drivers, and an important solution for people in
multi-dwelling units and without access to home charging.
Public charging can provide a safety net and comfort for
early adopters and extend the range and utility of PEVs,
broadening their market reach. It may also allow drivers
to increase electric driving and the associated energy
security and environmental benefits of their PEV.
Electric Vehicle Service Providers . A new industry has
come to the state lured by the intention of the PEV
automakers to target the California market and the
availability of tens of millions of dollars (e.g. federal
ARRA, AB 118, and local air districts) to build a public
PEV charging infrastructure.
When these entities started to plan and develop their
businesses, there was no natural fit for the business model
in the electricity marketplace. When they launched in
California they walked into uncharted territory since the
service of charging PEVs was not recognized in the law or
by the PUC.
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 this bill to put into law a recent
decision by the PUC to not regulate electric vehicle
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charging stations as utilities. According to the author,
"absent this bill, the 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."
Prior Legislation
SB 1435 (Padilla), 2009-10 Session, 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 PEV providers to ensure effective load
management. This bill died in the Assembly.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 7/7/11)
Alliance of Automobile Manufacturers
Better Place
BOMA California
California Apartment Association
California Business Properties Association
California Conference of Carpenters
California Manufacturers & Technology Association
California Public Utilities Commission
California Retailers Association
Coalition of California Utility Employees
Coulomb Technologies, Inc.
ECOtality, Inc.
Electric Vehicle Service Provider Coalition
Environmental Defense Fund
International Brotherhood of Electrical Workers
Nissan North America
Plug In America
San Diego Association of Governments
SF Environment
Southern California Association of Governments
Silicon Valley Leadership Group
The California Cars Initiative
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Western States Petroleum Association
Union of Concerned Scientists(unless amended)
OPPOSITION : (Verified 7/7/11)
California Electric Transportation Coalition
Pacific Gas and Electric
Southern California Edison
The Utility Reform Network (unless amended)
ARGUMENTS IN SUPPORT : The California Public Utilities
Commission writes, "AB 631, which would specify that the
ownership, operation, or management of a facility that
supplies electricity to the public only for use to charge a
light-duty Plug-in-Electric Vehicle (PEV) does not make the
person or corporation a public utility s defined under
Public Utilities (PU) Code Section 216.
"AB 631 codifies the summary conclusion of the CPUC's July
2010 Phase 1 Decision (D.10-07-044) in the
alternative-fueled Vehicle Rulemaking (R. 09-08-009), in
which the CPUC concluded that, based on current law,
providers of electric vehicle charging services were not
public utilities pursuant to PU Code Sections 216 and 218.
"The recent amendments to the bill resolve our concern that
that there be language included that expressly declares
that the bill's provisions do not affect the CPUC's
authority under any other applicable statute to address
potential impacts of electric vehicle charging services
through public utilities' rate-setting process or through
other legislatively-authorized means."
ARGUMENTS IN OPPOSITION : 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
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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 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"
ASSEMBLY FLOOR :
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Beall, Bill
Berryhill, Block, Blumenfield, Bonilla, Bradford,
Brownley, Buchanan, Butler, Charles Calderon, Campos,
Cedillo, Chesbro, Cook, Davis, Dickinson, Donnelly, Eng,
Feuer, Fletcher, Fong, Furutani, Beth Gaines, Galgiani,
Garrick, Gatto, Gordon, Grove, Hagman, Halderman, Hall,
Harkey, Hayashi, Hill, Huber, Hueso, Huffman, Jeffries,
Jones, Knight, Lara, Logue, Bonnie Lowenthal, Ma,
Mansoor, Mendoza, Miller, Mitchell, Monning, Morrell,
Nielsen, Norby, Olsen, Pan, Perea, V. Manuel Pérez,
Portantino, Silva, Skinner, Smyth, Solorio, Swanson,
Torres, Valadao, Wagner, Wieckowski, Williams, Yamada,
John A. Pérez
NOES: Fuentes
NO VOTE RECORDED: Carter, Conway, Gorell, Roger Hernández,
Nestande
RM:do 7/7/11 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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