BILL ANALYSIS 1
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SENATE ENERGY, UTILITIES AND COMMUNICATIONS COMMITTEE
ALEX PADILLA, CHAIR
SB 1437 - Kehoe Hearing
Date: April 6, 2010 S
As Introduced FISCAL B
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DESCRIPTION
Current law requires the California Public Utilities
Commission (CPUC) to evaluate policies that develop an
infrastructure sufficient to overcome barriers to the
widespread use of plug-in hybrid and full electric vehicles
(collectively EVs) and to adopt rules to address those
barriers by July 1, 2011.
This bill requires the CPUC, for each class of ratepayers,
to determine the portion of electric charges billed to
customers that are allocated to subsidizing the costs of
EVs on the grid.
BACKGROUND
Ready or Not, Here They Come - According to the California
Energy Commission (CEC) there were 14,670 EVs operating in
California in 2008 down from an industry high of 23,399 in
2003. However an increasing number and variety of EVs are
expected to hit the showroom floors of car dealers in the
coming months and years. The CEC expects the number of EVs
to grow from 32,756 in 2011 to 1.5 million by 2020 and 2.8
million by 2030.
An historic number of automakers have already begun or
announced deployment of a range of on-road EVs, including
light-duty plug-in hybrid EVs, full-size battery EVs, two
wheel battery EVs, and three or four wheel low-speed
neighborhood EVs beginning this year.
Readying the Grid - The state's investor-owned utilities
(IOUs) do have tariffs in place for electric cars and have
assisted residential customers and fleet managers with the
charging infrastructure necessary for the vehicles on a
limited basis. However regulators, the utilities and the
electric grid are not ready for the thousands of cars
expected. Infrastructure investments and policies at the
customer site, commercial site, public charging site, and
distribution system level are all required to prepare the
electricity system for the widespread use of EVs.
In response to the marketplace and the directives of SB 626
(Kehoe, 2009) the CPUC has initiated a rulemaking
(R.09-08-009) to determine the barriers and opportunities
presented by EVs on the grid. Issues under consideration
include rate design for the charging of EVs, options for
development of metering and charging infrastructure, and
how to incorporate EV charging with renewable energy
supply.
COMMENTS
1) Who Will Pay for the EV Infrastructure & Charging ?
The primary purpose of this bill is to have the CPUC
analyze and report on the cost impacts of moving
transportation costs and services to the electric grid
as a result of EVs. To accomplish this goal the CPUC
would be required to report on "the portion of the
billings that are used for subsidizing electricity"
for EVs. Implicit in this language is that ratepayers
will or should subsidize the EV infrastructure and
charging rates. However, that question has not yet
been answered by the Legislature or the CPUC.
In its rulemaking the CPUC is analyzing several cost
issues including:
Whether utilities should be permitted to
make expenditures in residential, commercial and
public charging infrastructure;
How a utility should recover expenditures
on charging infrastructure;
Whether utility costs should be recovered
directly from the users of the infrastructure or
from the wider body of ratepayers;
How a utility should recover costs of
distribution system upgrades attributable to
electric vehicles; and
Whether and how utilities should seek
cost recovery for expenditures driven by the
deployment of EVs.
1) Electrification Benefits . If tariffs and charging
policies are designed smartly, the grid can benefit
from the addition of EVs. Assuming that a good
portion of EV drivers charge during a normally
low-demand "off-peak" period, additional EV load can
flatten the daily load curve and improve grid load
factors. A flattened load shape results in more
efficient utilization of power plants and
transmission/distribution assets, which lowers average
electricity costs for all ratepayers. This bill does
not incorporate an analysis of the infrastructure
benefits of EVs.
2) More Inclusive Analysis . To address the implicit
but perhaps unintentional call for subsidies, and to
ensure assessment of the benefits of EVs to the grid,
the author and committee may wish to consider instead
directing the CPUC to undertake an analysis that
includes a valuation of the transmission and
electricity supply system benefits related to
increased EVs on the grid and an accounting of the
expenses and capital costs of bringing EVs to the
grid. Additionally, the CPUC has asked for an
extension of time to do its evaluation to July 2012.
3) Related Legislation . SB 1455 (Kehoe) requires the
CPUC to prepare and make available a handbook that
notifies an EV owner of specified safety features and
hazards associated with charging an EV.
POSITIONS
Sponsor:
Author
Support:
None on file.
Oppose:
None on file.
Kellie Smith
SB 1437 Analysis
Hearing Date: April 6, 2010