Under existing law, the Public Utilities Commission (PUC) has regulatory authority over public utilities, including electrical corporations, while local publicly owned electric utilities are under the direction of their governing boards. Existing law requires the PUC, in consultation with the State Energy Resources Conservation and Development Commission (Energy Commission), the State 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 plug-in hybrid and electric vehicles. Existing law requires the PUC, in consultation with the Energy Commission and the State Air Resources Board, to direct electrical corporations to file applications for programs and investments to accelerate widespread transportation electrification to achieve specified results. Existing law requires the PUC to approve, or modify and approve, programs and investments in transportation electrification, including those that deploy charging infrastructure, through a reasonable cost recovery mechanism, under certain circumstances. Existing law requires the PUC to consider facilitating the development of technologies that promote grid integration.

This bill would require the PUC, by December 31, 2020, in an existing proceeding, to establish strategies and quantifiable metrics to maximize the use of feasible and cost-effective electric vehicle grid integration by January 1, 2030, as specified. The bill would require the PUC to reference the electric vehicle grid integration strategies in relevant ongoing and subsequent proceedings that address issues of transportation electrification in any part and to identify how programs and investments that the PUC may approve will advance the achievement of the strategies. The bill would require the PUC, when executing its transportation electrification responsibilities, to consider how, or if, electric vehicle grid integration can mitigate any generation, transmission, or distribution costs, or increase the economic, social, or environmental benefits associated with transportation electrification, and to not foreclose future utilization of electric vehicle grid integration. The bill would require electrical corporations and community choice aggregators to provide to the PUC certain information relating to the electric vehicle integration strategies. The bill would require each local publicly owned electric utility serving more than 700 gigawatthours of annual electrical demand, in each integrated resource plan update adopted on and after January 1, 2020, to consider establishing electric vehicle grid integration strategies and evaluating how its existing and planned programs further those strategies.

Under existing law, a violation of the Public Utilities Act or any order, decision, rule, direction, demand, or requirement of the PUC is a crime.

Because the above provisions amend the Public Utilities Act, and the PUC would be required to issue an order, decision, rule, direction, demand, or requirement to implement those provisions, a violation of any of which would be a crime, this bill would impose a state-mandated local program. Further, because the bill would impose additional duties on local publicly owned electric utilities and community choice aggregators, which are local agencies, this bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for specified reasons.

Under existing law, the Public Utilities Commission (PUC) has regulatory authority over public utilities, including electrical corporations, while local publicly owned electric utilities are under the direction of their governing boards. Existing law requires the PUC, in consultation with the State Energy Resources Conservation and Development Commission (Energy Commission), the State 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 plug-in hybrid and electric vehicles. Existing law requires the PUC, in consultation with the Energy Commission and the State Air Resources Board, to direct electrical corporations to file applications for programs and investments to accelerate widespread transportation electrification to achieve specified results. Existing law requires the PUC to approve, or modify and approve, programs and investments in transportation electrification, including those that deploy charging infrastructure, through a reasonable cost recovery mechanism, under certain circumstances. Existing law requires the PUC to consider facilitating the development of technologies that promote grid integration.

This bill would require the PUC, by December 31, 2020, in an existing proceeding, to establish strategies and quantifiable metrics to maximize the use of feasible and cost-effective electric vehicle grid integration, as defined, by January 1, 2030, as specified. The bill would require the PUC to reference the electric vehicle grid integration strategies in relevant ongoing and subsequent proceedings that address issues of transportation electrification in any part and to identify how programs and investments that the PUC may approve will advance the achievement of the strategies. The bill would require the PUC, when executing its transportation electrification responsibilities, to consider how, or if, electric vehicle grid integration can mitigate any generation, transmission, or distribution costs, or increase the economic, social, or environmental benefits associated with transportation electrification, and to not foreclose future utilization of electric vehicle grid integration. The bill would require electrical corporations and community choice aggregators to provide to the PUC certain information relating to the electric vehicle integration strategies. The bill would require each local publicly owned electric utility serving more than 700 gigawatthours of annual electrical demand, in its each integrated resource plan update adopted on and after January 1, 2020, to consider establishing electric vehicle grid integration strategies and evaluating how its existing and planned programs further those strategies.

Under existing law, a violation of the Public Utilities Act or any order, decision, rule, direction, demand, or requirement of the PUC is a crime.

Because the above provisions amend the Public Utilities Act, and the PUC would be required to issue an order, decision, rule, direction, demand, or requirement to implement those provisions, a violation of any of which would be a crime, this bill would impose a state-mandated local program. Further, because the bill would impose additional duties on local publicly owned electric utilities and community choice aggregators, which are local agencies, this bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for specified reasons.

 UNFINISHED BUSINESS  

Bill No: SB 676

Author: Bradford (D), et al.

Amended: 9/6/19

Vote: 21

SENATE ENERGY, U. & C. COMMITTEE: 13-0, 4/24/19

AYES: Hueso, Moorlach, Bradford, Chang, Dodd, Hertzberg, Hill, McGuire, Rubio, Skinner, Stern, Stone, Wiener

SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8

SENATE FLOOR: 38-0, 5/20/19

AYES: Allen, Archuleta, Atkins, Bates, Beall, Borgeas, Bradford, Caballero, Chang, Dodd, Durazo, Galgiani, Glazer, Grove, Hertzberg, Hill, Hueso, Hurtado, Jackson, Jones, Leyva, McGuire, Mitchell, Monning, Moorlach, Morrell, Nielsen, Pan, Portantino, Roth, Rubio, Skinner, Stern, Stone, Umberg, Wieckowski, Wiener, Wilk

ASSEMBLY FLOOR: 76-0, 9/10/19 - See last page for vote

SUBJECT: Transportation electrification: electric vehicles: grid integration

SOURCE: Author

DIGEST:

This bill requires the California Public Utilities Commission (CPUC) to establish electric vehicle (EV)-grid integration strategies for certain load-serving entities (LSEs). This bill also requires local publicly owned electric utilities (POUs) to consider EV-grid integration strategies in their integrated resources plans (IRPs) and requires Community Choice Aggregators (CCAs) to report specified information to the CPUC regarding EV-grid integration activities.

Assembly Amendments

make various clarifying changes, modify the definition of EV-grid integration, delete specific load modification targets, and require the CPUC to consider National Institute of Standards and Technology (NIST) reliability and cybersecurity protocols in EV-grid integration strategies. The amendments also modify how CCAs will report EV-grid integration actions to the CPUC and delete requirements for the CEC to develop EV-grid integration strategies. Instead, the amendments require POUs to consider EV-grid integration strategies in their IRPs.

ANALYSIS:

Existing law:

1. Defines transportation electrification as the use of electricity from external sources of electrical power, including the electrical grid, for all or part of vehicles, vessels, trains, boats, or other equipment that are mobile sources of air pollution and greenhouse gas (GHG) and associated programs and charging and propulsion infrastructure to support this use of electricity. (Public Utilities Code §237.5)
2. Requires the CPUC to direct IOUs to file applications for investments to accelerate transportation electrification, reduce reliance on petroleum, and meet certain climate goals. Allows the CPUC to approve or amend applications for transportation electrification investments. IOUs are also authorized to recover reasonable costs for approved investments from ratepayers if they are consistent with certain requirements. (Public Utilities Code §740.12(b))
3. Requires the CPUC to review data related to current and future transportation electrification adoption and charging infrastructure prior to allowing an IOU to collect new program costs from ratepayers. (Public Utilities Code §740.12(c))
4. Requires each POU with an annual electrical demand exceeding 700 gigawatt hours to adopt an integrated resources plan (IRP) that helps ensure that the POU will meet climate goals for the electricity sector. An IRP must be updated at least once every five years and must address procurement plans for the following:
   1. Energy efficiency and demand response resources,
   2. Energy storage requirements,
   3. Transportation electrification,
   4. A diversified energy resource procurement portfolio, and
   5. Resource adequacy requirements.

This bill:

1. Defines “electric vehicle-grid integration” as any method of altering the time, rate, or location at which the EV charges or discharges, in a manner that optimizes an EV’s interaction with the grid and provides net benefits to ratepayers by doing any of the following:
   1. Increasing grid asset utilization
   2. Avoiding distribution infrastructure upgrades
   3. Integrating renewable energy resources
   4. Reducing the cost of electricity supply
   5. Offering reliability services

This definition does not require the use of specific technology to achieve these benefits and may be achieved using multiple strategies, including, but not limited to rate design, technology, or customer service that provides net benefits to ratepayers.

1. Requires the CPUC, by December 31, 2020, to establish strategies and quantifiable metrics to maximize the use of feasible and cost-effective EV-grid integration by January 1, 2030. The strategies shall be applicable to IOUs, electric service providers (ESPs), and CCAs, and must be consistent with the following:
   1. Strategies must account of the effect of TOU rates on charging.
   2. Expenditures on EV-grid integration must be in the best interest of ratepayers.
   3. EV-grid integration strategies must reflect electrical demand attributable to EV charging, including from existing programs
   4. EV-grid integration must be consistent with existing transportation electrification goals.
   5. The CPUC must consider incorporating NIST’s reliability and cybersecurity protocols or a similarly protective set of cybersecurity protocols.
2. Requires each POU that files an IRP with the CEC to consider the following:
   1. Establishing EV-grid integration strategies that are in the best interest of ratepayers and reflect the POU’s estimated electrical demand resulting from EV charging.
   2. Evaluating how its existing and planned EV-grid integration program, including rates and transportation electrification investments, further EV grid integration strategies established by the POU.
3. Requires the CPUC to reference the EV-grid integration strategies in future transportation electrification proceedings, consider how EV-grid integration can defer infrastructure costs and provide other benefits, and identify how investments will advance the strategies.
4. Requires each CCA to annually report to the CPUC, describing how its current and planned rates, programs, and investments further EV-grid integration strategies.
5. Requires each IOU that files an application for transportation electrification investments to quantify how the investments further the EV-grid integration strategies in its application and report its progress in its load research report filing or alternative compliance filing with the CPUC.
6. Requires the CPUC to review each LSE’s annual measureable progress in furthering EV-grid integration strategies and issue recommendations to ensure progress.
7. Clarifies that nothing in this section authorizes delays of programs and rate proposals pending before the CPUC before January 1, 2020, and the bill only applies to electrical corporations that file an IRP.

Background

Transportation electrification and ratepayer investments. The CEC, CPUC, and the State Air Resources Board (ARB) are each administering investments in transportation electrification infrastructure. However, IOU ratepayers are providing the largest source of funding for these infrastructure investments. In 2016, the CPUC directed the IOUs to file applications for programs to accelerate transportation electrification in compliance with SB 350 (De León, Chapter 547, Statutes of 2015). In 2018, the CPUC authorized approximately $750 million of ratepayer-funded IOU transportation electrification infrastructure programs. The CPUC is reviewing proposals for another $1 billion in additional investments. A significant amount of IOU investments in transportation electrification are through distribution upgrades that ensure that a facility is ready for EV charger installation and rate design programs that encourage EV owners to charge in a grid-responsive manner.

EV load can turn ducks into dragons. California produces excess renewable energy during the middle of the day, sometimes referred to as the “belly of the duck.” Vehicle electrification can reduce reliance on petroleum and increase the use of renewable energy through charging aligned with excess renewable production; however, vehicle electrification can also increase demand for electricity generated by natural gas and shift some emissions from the transportation sector to the electricity sector if EV charging occurs at peak demand periods.

In 2018, the Legislature codified the goal of putting five million EVs on the road by 2030 by passing AB 2127 (Ting, Chapter 365, Statutes of 2018). To the extent that the state accelerates EV deployment to meet this goal, the electricity demand generated by these EVs’ charging patterns could significantly change the shape of California’s electrical load. A 2018 report by the CEC indicates that EV deployment could increase demand by a gigawatt by 2025. The load pattern generated by accelerated EV deployment could more closely resemble a dragon instead of duck. Depending on the location of EV deployment, this demand increase could disproportionately strain some regions more than others, impacting distribution systems at these locations more severely. Without taking steps to better match EV charging patterns with excess renewable energy availability, EVs’ demand increase could increase demand for additional natural gas generation sources and the need for electricity system upgrades to manage the load.

What is vehicle-grid integration? This bill establishes a definition of EV-grid integration that encompasses both the use of technology to modify load and ratemaking that supports charging in response to price signals. This definition is consistent with ongoing efforts to use cost-effective mechanisms to encourage EV charging in response to price signals and grid needs. This bill also allows the CPUC to adopt a revised definition for EV-grid integration under a proceeding. Existing law does not contain a clear definition of vehicle-grid integration. Currently, a number of activities are included in vehicle-grid integration efforts, including time-of-use rates.

While time-of-use rates are not solely focused on addressing load from EVs, rate design can help send price signals that support conscious efforts by consumers to shift load to non-peak hours. As part of their transportation electrification programs, some IOUs are piloting transportation electrification rate designs that are more dynamic than time-of-use rates. For example, San Diego Gas and Electric Company (SDG&E) is piloting an hourly rate design as part of its Power Your Drive program aimed at incentivizing charging at times that optimize overall grid and circuit utilization. Demand data from SDG&E indicates that this rate design program may be effectively incentivizing charging outside the IOU’s peak demand period.

The use of price signals in vehicle-grid integration is crucial to both encouraging load shifting and load stabilizing charging behavior. Shifting EV load to periods when excess renewables are on the grid may not be sufficient to limit stress on distribution systems arising from increased EV charging. Even if load shifts to charge EVs with renewable energy, a sudden increase in charging will still lead to new peak demands that make consistent energy resource management challenging, especially at the local level. As a result, using hardware that does not have the capability to respond to price signals and take advantage of more dynamic rate designs is likely not sufficient to achieve significant benefits associated with vehicle-grid integration.

In a 2018 staff report on vehicle-grid integration communication protocols, CPUC Energy Division staff acknowledged that hardware alone would not be sufficient to address load issues associated with accelerated EV deployment. The report noted that a more holistic approach involving communication protocols, market facilitation, wholesale and retail rate improvements, load management, demand response programs and other policy changes would be necessary to enable the implementation of vehicle-grid integration in some cases. The CPUC is already in the process of exploring mechanisms for ensure that vehicle-grid integration investments support communication protocols that enable hardware to respond to price signals and grid events.

Strategies provide flexibility and reporting ensures accountability. This bill requires the CPUC to establish EV-grid integration strategies for certain load-serving entities (LSEs), including IOUs, CCAs, ESPs. These strategies are flexible and include rate design programs that incentivize changes to charging behavior and send price signals to consumers. Some IOUs are already providing information about how their investments are supporting EV-grid integration CPUC in their applications for transportation electrification programs. This bill also requires IOUs to report their progress on furthering the strategies as part of their electric vehicle load research and cost studies filed with the CPUC.

While some CCAs are making transportation electrification investments, CCAs do not file applications for these investments with the CPUC. Existing law does not require LSEs filing IRPs at the CPUC to identify their transportation electrification investments; as a result, CCAs’ transportation electrification investments are not necessarily reported to the CPUC. While CCAs may be making investments that support EV-grid integration, the lack of uniformly reported information makes it difficult to determine the degree to which ratepayers will experience benefits from these investments and how ratepayers will experience those benefits. This bill would require CCA’s to annually report information on how their rates, programs, and investments are furthering EV-grid integration goals.

Unlike CCAs and IOUs, POUs report their transportation electrification investments in their IRPs, which are filed with the CEC. This bill requires POUs that file IRPs to consider adopting EV-grid integration strategies and consider evaluating the extent to which their rates and incentive programs further those strategies.

Even if EV deployment accelerates, it will likely be disproportionate throughout the state. As a result, vehicle-grid integration investments may only be beneficial for ratepayers to the extent that they align with geographic EV deployment and drivers’ charging patterns. Information from the CEC indicates that if EV adoption follows trends in new vehicle purchase rates, approximately 90 percent of plug-in EVs will be deployed in counties identified within the four largest metropolitan planning regions of California (Southern California, San Francisco Bay Area, San Diego County, and the greater Sacramento area) by 2025. This bill will provide the CPUC with the information necessary to determine the degree to which EV-grid integration can be incentivized to ensure that transportation electrification investments provide net benefits to ratepayers.

Related/Prior Legislation

AB 2127 (Ting, Chapter 365, Statutes of 2018) required the CEC to conduct a statewide assessment of vehicle charging infrastructure needed to support the goal of putting five million EVs on the road in California by 2030.

SB 1000 (Lara, Chapter 368, Statutes of 2018) required the CEC to evaluate the extent to which charging infrastructure is proportionately deployed and use funds to more proportionately deploy chargers as needed. The bill also required the CPUC to explore facilitating the development of technologies that promote grid integration and adopting a tariff for heavy-duty EVs that encourages charging during periods of excess grid capacity.

SB 350 (De León, Chapter 547, Statutes of 2015), the Clean Energy and Pollution Reduction Act of 2015, established new clean energy, clean air and GHG reduction goals and established the IRP process through which electrical corporations file procurements, including transportation electrification investments.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: Yes

According to the Assembly Appropriations Committee, the CPUC asserts this bill entails no new costs. This is because, according to the CPUC, it largely reiterates activities the CPUC is already undertaking, pursuant the existing law and administrative direction.

SUPPORT: (Verified 9/10/19)

Advanced Energy Economy

American Honda Motor Co., Inc.

American Wind Energy Association

California Efficiency + Demand Management Council

California Energy Storage Alliance

California League of Conservation Voters

Electric Vehicle Charging Association

eMotorWerks

Enel X

Environmental Defense Fund

EVBox

Greenlots

Natural Resources Defense Council

Plug In America

OPPOSITION: (Verified 9/10/19)

None received

ARGUMENTS IN SUPPORT: According to the author, “California has set ambitious goals to electrify its transportation sector, which will dramatically increase the electrical load from our vehicles. But the State’s electrical grid already faces many challenges, in part due to our increased use of intermittent renewable energy. If EV charging is grid integrated, it can mitigate this problem and provide a variety of benefits, including but not limited to, shifting load out of peak demand periods, absorbing excess solar generation during midday, and shedding load as demand rapidly ramps. SB 676 ensures that vehicle-grid integration is a part of the conversation as the State continue to invest billions of dollars in transportation electrification, with significant investments from ratepayers.”

ASSEMBLY FLOOR: 76-0, 9/10/19

AYES: Aguiar-Curry, Arambula, Bauer-Kahan, Berman, Bigelow, Bloom, Boerner Horvath, Bonta, Brough, Burke, Calderon, Carrillo, Cervantes, Chau, Chen, Chiu, Choi, Chu, Cooley, Cooper, Cunningham, Daly, Diep, Eggman, Flora, Fong, Frazier, Friedman, Gabriel, Gallagher, Cristina Garcia, Gipson, Gloria, Gonzalez, Gray, Grayson, Holden, Irwin, Jones-Sawyer, Kalra, Kamlager-Dove, Kiley, Lackey, Levine, Limón, Low, Maienschein, Mathis, McCarty, Medina, Mullin, Muratsuchi, Nazarian, Obernolte, O'Donnell, Patterson, Petrie-Norris, Quirk, Quirk-Silva, Ramos, Reyes, Luz Rivas, Robert Rivas, Rodriguez, Blanca Rubio, Salas, Santiago, Smith, Mark Stone, Ting, Voepel, Waldron, Weber, Wicks, Wood, Rendon

NO VOTE RECORDED: Eduardo Garcia, Mayes, Melendez

Prepared by: Sarah Smith / E., U., & C. / (916) 651-4107

9/10/19 22:05:42

**** END ****

SENATE THIRD READING

STR Bill Id:SB 676

Author:(Bradford)

As Amended Ver:September 6, 2019

Majority vote

SUMMARY:

Requires the California Public Utilities Commission (CPUC) to establish strategies and quantifiable metrics to maximize the use of feasible and cost-effective electric vehicle (EV) grid integration. Additionally, the municipal utilities are required to consider establishing EV strategies as part of their integrated resource plan update.

Major Provisions

The measure makes several findings and declarations, including the following: "the policy of the state and the intent of the Legislature to maximize net ratepayer and grid benefits from transportation electrification and reduce costs or mitigate cost increases for all ratepayers due to increased usage of electric vehicles…"

COMMENTS:

Statute and economics have worked to significantly reduce emissions from the California electricity sector. As of 2017, in-state and out-of-state electricity production combined produced only 15% of the state's greenhouse gas emissions. However, according to the Air Resources Board's (ARB) Greenhouse Gas Emission Inventory, the transportation sector accounted for 41% of those emissions. Greening of the electricity sector is driving the state policy to achieve electrification of the transportation sector, thereby swapping fossil fuels for electricity produced from increasing proportions of clean energy resources. The state, through public and private monies, is dedicating billions of dollars to this goal.

Currently, electricity production to meet California demand is often times characterized by peaks of electricity generated from clean energy resources in excess of demand followed by valleys of net clean energy production that must be filled by electricity produced, in part, by fossil fuel resources. Widespread electric vehicle deployment could help to address this situation if, for example, electric vehicles charging occurred at times of excess clean electricity generation. However, electric vehicle deployment could exacerbate the situation, when charged at a time when clean electricity is in short supply.

The CPUC is aware of this situation, as are the state's other energy agencies and the ARB. For this reason, the CPUC has an ongoing transportation electrification preceding to address electric vehicle integration. This bill does not conflict with the CPUC's ongoing preceding. In fact, the bill comports so well with the CPUC's efforts the CPUC assumes it will incur no costs to comply with the requirements of this bill.

According to the Author:

"California has set ambitious goals to electrify its transportation sector, which will dramatically increase the electrical load from our vehicles. But the State's electrical grid already faces many challenges, in part due to our increased use of intermittent renewable energy. If EV charging is grid integrated, it can mitigate this problem and provide a variety of benefits, including but not limited to, shifting load out of peak demand periods, absorbing excess solar generation during midday, and shedding load as demand rapidly ramps. SB 676 ensures that VGI is a part of the conversation as the State continues to invest billions of dollars in transportation electrification, with significant investments from ratepayers."

Arguments in Support:

Advanced Energy and the Economy indicates the following: "Consumer demand and zero emissions vehicle (ZEV) deployment will reach even higher levels in California. SB 676 anticipates these trend lines and ensures that an accelerated jump in vehicles 'plugging in smooths peak electricity demand and exerts downward pressure on rates. This bill recognizes that by harmonizing EV charging with real-time price signals and other energy needs due to new statewide goals, VGI can serve ratepayers' best interests by simultaneously moderating the cost of ZEV programs and alleviating strain on the grid."

Arguments in Opposition:

Indivisible South Bay indicates the following: "Community choice programs have been leading in the development of innovative community-based distributed energy resource programs, many of these in the transportation sector. The leadership of community choice programs in transportation must continue unimpeded – it is essential to sustainably meeting California's climate goals and to securing equitable economic and social benefits for our communities".

FISCAL COMMENTS:

According to Assembly Appropriations: "The CPUC asserts this bill entails no new costs. This is because, according to the CPUC, it largely reiterates activities the CPUC is already undertaking, pursuant the existing law and administrative direction."

VOTES:

SENATE FLOOR: 38-0-0

YES: Allen, Archuleta, Atkins, Bates, Beall, Borgeas, Bradford, Caballero, Chang, Dodd, Durazo, Galgiani, Glazer, Grove, Hertzberg, Hill, Hueso, Hurtado, Jackson, Jones, Leyva, McGuire, Mitchell, Monning, Moorlach, Morrell, Nielsen, Pan, Portantino, Roth, Rubio, Skinner, Stern, Stone, Umberg, Wieckowski, Wiener, Wilk

ASM UTILITIES AND ENERGY: 12-0-3

YES: Holden, Patterson, Burke, Carrillo, Chen, Eggman, Cristina Garcia, Eduardo Garcia, Quirk, Reyes, Santiago, Ting

ABS, ABST OR NV: Cunningham, Mayes, Muratsuchi

ASM COMMUNICATIONS AND CONVEYANCE: 12-0-1

YES: Santiago, Boerner Horvath, Bonta, Brough, Cervantes, Holden, Kamlager-Dove, Low, Chen, Patterson, Quirk-Silva, Rodriguez

ABS, ABST OR NV: Eduardo Garcia

ASM APPROPRIATIONS: 17-0-1

YES: Gonzalez, Bigelow, Bloom, Bonta, Brough, Calderon, Carrillo, Chau, Diep, Eggman, Fong, Gabriel, Maienschein, Obernolte, Petrie-Norris, Quirk, Robert Rivas

ABS, ABST OR NV: Eduardo Garcia

UPDATED:

VERSION: September 6, 2019

CONSULTANT: Mary McDonald / U. & E. / 916-319-2083 FN: 0002153

SENATE THIRD READING

STR Bill Id:SB 676

Author:(Bradford)

As Amended Ver:July 5, 2019

Majority vote

SUMMARY:

Requires the California Public Utilities Commission (CPUC) to establish strategies and quantifiable metrics to maximize the use of feasible and cost-effective electric vehicle (EV) grid integration. Additionally, the municipal utilities are required to consider establishing EV strategies as part of their integrated resource plan update.

Major Provisions

1. The measure makes several findings and declarations, including the following: "the policy of the state and the intent of the Legislature to maximize net ratepayer and grid benefits from transportation electrification and reduce costs or mitigate cost increases for all ratepayers due to increased usage of electric vehicles…"
2. Requires the CPUC to reference its electric vehicle grid integration (VGI) strategies and metrics when undertaking activities related to transportation electrification.
3. Directs each electrical investor-owned utility (IOU) and each community choice aggregator (CCA) to report to the CPUC on its effectiveness in furthering the CPUC's electric vehicle grid integration strategies.
4. Requires the CPUC to review each load-serving entity's (LSE) annual measurable progress in furthering electric vehicle grid integration strategies and allows the CPUC, if appropriate, issue recommendations to ensure reasonable progress. (A load-serving entity, or LSE, is an electrical IOU, a CCA or an electric service provider (ESP)).
5. Requires each municipally owned electric utility to consider in its planning documents establishing vehicle grid integration strategies and evaluating how its vehicle grid integration strategies programs further those strategies.

COMMENTS:

The transportation accounts for much of the state's air pollution. Statute and economics have worked to clean up California electricity sector, so that, as of 2017, in-state and out-of-state electricity production combined produced only 15% of the state's greenhouse gas emissions, according to the Air Resources Board's (ARB) Greenhouse Gas Emission Inventory, while the transportation sector accounted for 41% of those emissions. For these reasons and more, state policy is to achieve electrification of the transportation sector, thereby swapping fossil fuels for electricity produced from increasing proportions of clean energy resources. The state, through public and private monies, is dedicating billions of dollars to this goal.

Currently, electricity production to meet California demand is oftentimes characterized by peaks of electricity generated from clean energy resources in excess of demand followed by valleys of net clean energy production that must be filled by electricity produced, in part, by fossil fuel resources. Widespread electric vehicle deployment could ameliorate this situation if, for example, electric vehicles charging occurred at times of excess clean electricity generation. However, electric vehicle deployment could exacerbate the situation, when charged at a time when clean electricity is in short supply.

The CPUC is aware of this situation, as are the state's other energy agencies and the ARB. For this reason, the CPUC has an ongoing transportation electrification preceding to address electric vehicle integration. This bill does not conflict with the CPUC's ongoing preceding. In fact, the bill comports so well with the CPUC's efforts the CPUC assumes it will incur no costs to comply with the requirements of this bill.

According to the Author:

California has set ambitious goals to electrify its transportation sector, which will dramatically increase the electrical load from our vehicles. But the State's electrical grid already faces many challenges, in part due to our increased use of intermittent renewable energy. If EV charging is grid integrated, it can mitigate this problem and provide a variety of benefits, including but not limited to, shifting load out of peak demand periods, absorbing excess solar generation during midday, and shedding load as demand rapidly ramps. This bill ensures that VGI is a part of the conversation as the State continues to invest billions of dollars in transportation electrification, with significant investments from ratepayers.

Arguments in Support:

Advanced Energy and the Economy indicates the following: "Consumer demand and zero emissions vehicle (ZEV) deployment will reach even higher levels in California. SB 676 anticipates these trend lines and ensures that an accelerated jump in vehicles "plugging in" smooths peak electricity demand and exerts downward pressure on rates. This bill recognizes that by harmonizing EV charging with real-time price signals and other energy needs due to new statewide goals, VGI can serve ratepayers' best interests by simultaneously moderating the cost of ZEV programs and alleviating strain on the grid."

Arguments in Opposition:

Indivisible South Bay indicates the following: "Community choice programs have been leading in the development of innovative community-based distributed energy resource programs, many of these in the transportation sector. The leadership of community choice programs in transportation must continue unimpeded – it is essential to sustainably meeting California's climate goals and to securing equitable economic and social benefits for our communities."

FISCAL COMMENTS:

According to the Assembly Appropriations Committee, the CPUC asserts this bill entails no new costs. This is because, according to the CPUC, it largely reiterates activities the CPUC is already undertaking, pursuant the existing law and administrative direction.

VOTES:

SENATE FLOOR: 38-0-0

YES: Allen, Archuleta, Atkins, Bates, Beall, Borgeas, Bradford, Caballero, Chang, Dodd, Durazo, Galgiani, Glazer, Grove, Hertzberg, Hill, Hueso, Hurtado, Jackson, Jones, Leyva, McGuire, Mitchell, Monning, Moorlach, Morrell, Nielsen, Pan, Portantino, Roth, Rubio, Skinner, Stern, Stone, Umberg, Wieckowski, Wiener, Wilk

ASM UTILITIES AND ENERGY: 12-0-3

YES: Holden, Patterson, Burke, Carrillo, Chen, Eggman, Cristina Garcia, Eduardo Garcia, Quirk, Reyes, Santiago, Ting

ABS, ABST OR NV: Cunningham, Mayes, Muratsuchi

ASM COMMUNICATIONS AND CONVEYANCE: 12-0-1

YES: Santiago, Boerner Horvath, Bonta, Brough, Cervantes, Holden, Kamlager-Dove, Low, Chen, Patterson, Quirk-Silva, Rodriguez

ABS, ABST OR NV: Eduardo Garcia

ASM APPROPRIATIONS: 17-0-1

YES: Gonzalez, Bigelow, Bloom, Bonta, Brough, Calderon, Carrillo, Chau, Diep, Eggman, Fong, Gabriel, Maienschein, Obernolte, Petrie-Norris, Quirk, Robert Rivas

ABS, ABST OR NV: Eduardo Garcia

UPDATED:

VERSION: July 5, 2019

CONSULTANT: Mary McDonald / U. & E. / (916) 319-2083 FN: 0001584

Date of Hearing: August 21, 2019

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez, Chair

SBPCA Bill Id:SB 676

Author:(Bradford) – As Amended Ver:July 5, 2019

Urgency: No State Mandated Local Program: Yes Reimbursable: No

SUMMARY:

This bill makes a number of requirements to maximize benefits to ratepayers and the electrical grid that result from transportation electrification.

Specifically, this bill:

1. Makes in statute several findings and declarations, including that it is “the policy of the state and the intent of the Legislature to maximize net ratepayer and grid benefits from transportation electrification and reduce costs or mitigate cost increases for all ratepayers due to increased usage of electric vehicles by accelerating electric vehicle grid integration and by ensuring that any investments in transportation electrification do not foreclose the electric vehicle grid integration potential of these investments.
2. Requires the CPUC, by December 31, 2020, to establish strategies and quantifiable metrics to maximize the use of feasible and cost-effective electric vehicle grid integration by January 1, 2030.
3. Requires the CPUC to reference its electric vehicle grid integration strategies and metrics when undertaking activities related to transportation electrification.
4. Directs each electrical investor-owned utility (IOU) and each community choice aggregator (CCA) to report to the CPUC on its effectiveness in furthering the CPUC’s electric vehicle grid integration strategies.
5. Requires the CPUC to review each load-serving entity’s annual measurable progress in furthering electric vehicle grid integration strategies and allows the CPUC, if appropriate, issue recommendations to ensure reasonable progress. (A load-serving entity, or LSE, is an electrical IOU, a CCA or an electric service provider (ESP).)
6. Requires each municipally owned electric utility to consider in its planning documents establishing vehicle grid integration strategies and evaluating how its vehicle grid integration strategies programs further those strategies.

FISCAL EFFECT:

The CPUC asserts this bill entails no new costs. This is because, according to the CPUC, it largely reiterates activities the CPUC is already undertaking, pursuant the existing law and administrative direction.

COMMENTS:

Background and Purpose. The transportation accounts for much of the state’s air pollution. Statute and economics have worked to clean up California electricity sector, so that, as of 2017, in-state and out-of-state electricity production combined produced only 15% of the state’s greenhouse gas emissions, according the Air Resources Board’s Greenhouse Gas Emission Inventory, while the transportation sector accounted for 41% of those emissions. For these reasons and more, state policy is to achieve electrification of the transportation sector, thereby swapping fossil fuels for electricity produced from increasing proportions of clean energy resources. The state, through public and private monies, is dedicating billions of dollars to this goal.

Currently, electricity production to meet California demand is oftentimes characterized by peaks of electricity generated from clean energy resources in excess of demand followed by valleys of net clean energy production that must be filled by electricity produced, in part, by fossil fuel resources. Widespread electric vehicle deployment could ameliorate this situation if, for example, electric vehicles charging occurred at times of excess clean electricity generation. However, electric vehicle deployment could exacerbate the situation, were electric vehicles to be charged when clean electricity was in short supply.

The CPUC is aware of this situation, as are the state’s other energy agencies and the ARB. For this reason, the CPUC has an ongoing transportation electrification preceding to address electric vehicle integration. This bill does not conflict with the CPUC’s ongoing preceding. In fact, the bill comports so well with the CPUC’s efforts the CPUC assumes it will incur no costs to comply with the requirements of this bill.

Nonetheless, the author sees benefit to codifying the requirements of this bill. As the author explains:

California has set ambitious goals to electrify its transportation sector, which will dramatically increase the electrical load from our vehicles. But the State’s electrical grid already faces many challenges, in part due to our increased use of intermittent renewable energy. If EV charging is grid integrated, it can mitigate this problem and provide a variety of benefits, including but not limited to, shifting load out of peak demand periods, absorbing excess solar generation during midday, and shedding load as demand rapidly ramps. SB 676 ensures that VGI is a part of the conversation as the State continues to invest billions of dollars in transportation electrification, with significant investments from ratepayers.

Analysis Prepared by: Jay Dickenson / APPR. / (916) 319-2081

Date of Hearing: July 10, 2019

ASSEMBLY COMMITTEE ON COMMUNICATIONS AND CONVEYANCE

Miguel Santiago, Chair

SBPCA Bill Id:SB 676

Author:(Bradford) – As Amended Ver:July 5, 2019

SENATE VOTE: 38-0

SUBJECT: Transportation electrification: electric vehicles: grid integration

SUMMARY: Requires the California Public Utilities Commission (CPUC) to establish strategies and quantifiable metrics to maximize the use of feasible and cost-effective electric vehicle grid integration. Specifically, this bill:

1. Requires the CPUC, by December 31, 2020, in an existing proceeding, to establish strategies and quantifiable metrics to maximize the use of feasible and cost-effective electric vehicle grid integration by January 1, 2030, consistent with all of the following:
   1. The electric vehicle grid integration strategies shall account for the effect of time-of-use rates on electricity demand from electric vehicle (EV) charging;
   2. Expenditures on electric vehicle grid integration shall be in the best interests of ratepayers, as specified;
   3. The electric vehicle grid integration strategies shall reflect electrical demand attributable to EV charging, including from existing approved rates and programs;
   4. Electric vehicle grid integration shall be consistent with specified transportation electrification goals; and,
   5. The CPUC shall consider incorporating the National Institute of Standards and Technology’s reliability and cybersecurity protocols, or other equally protective or more protective cybersecurity protocols, into the electric vehicle grid integration strategies.
2. Requires a local publicly owned electric utility, as part of its integrated resource plan update adopted on and after January 1, 2020, as specified, to consider both of the following:
   1. Establishing electric vehicle grid integration strategies that are in the best interests of ratepayers and that reflect the local publicly owned electric utility’s estimated electrical demand attributable to EV charging, as applicable; and,
   2. Evaluating how it’s existing and planned electric vehicle grid integration programs, including its electrical rates and investments in transportation electrification, to the extent feasible, further the electric vehicle grid integration strategies it has established, as applicable.
3. Requires the CPUC, in carrying out its responsibilities pertaining to transportation electrification, as specified, to reference the specified established electric vehicle grid integration strategies in relevant ongoing and subsequent proceedings that address issues of transportation electrification in any part and shall identify how programs and investments that the CPUC may approve will advance the achievement of the strategies.
4. Requires the CPUC, in executing its responsibilities on transportation electrification, as specified, to consider how, or if, electric vehicle grid integration can mitigate any generation, transmission, or distribution costs, or increase the economic, social, or environmental benefits associated with transportation electrification, and shall not foreclose future utilization of electric vehicle grid integration.
5. Requires each community choice aggregator, one year after the CPUC establishes specified electric vehicle grid integration strategies, to report annually to the CPUC describing how its current and planned programs, rates, and investments in transportation electrification are expected to further the electric vehicle grid integration strategies.
6. Requires each electrical corporation, in each of its specified applications to the CPUC for transportation electrification programs and investments, to quantify how the investments described in the application are expected to further the specified adopted electric vehicle grid integration strategies.
7. Requires each electrical corporation that files an application for programs and investments to accelerate widespread transportation electrification, in each of its load research report compliance filings or alternative compliance filings submitted to the CPUC, to report the electrical corporation’s annual measurable progress in furthering the specified adopted electric vehicle grid integration strategies.
8. Requires the CPUC, in an existing proceeding, review each load-serving entity’s annual measurable progress in furthering the specified adopted electric vehicle grid integration strategies, and may, if appropriate, issue recommendations to ensure reasonable progress toward achieving vehicle grid integration.
9. Specifies that nothing in this bill authorizes a delay of any new rate or program for EV charging or electric vehicle grid integration as to which consideration or approval is pending before the CPUC on or before January 1, 2020.
10. Specifies that, as regards electrical corporations, this bill only applies to electrical corporations that are required to file an integrated resource plan, as specified.
11. Defines “electric vehicle grid integration” for purposes of this bill to mean any method of altering the time, charging level, or location at which grid-connected EVs charge or discharge, in a manner that optimizes plug-in EV interaction with the electrical grid and provides net benefits to ratepayers by doing any of the following:
    1. Increasing electrical grid asset utilization;
    2. Avoiding otherwise necessary distribution infrastructure upgrades;
    3. Integrating renewable energy resources;
    4. Reducing the cost of electricity supply; or,
    5. Offering reliability services, as specified, or the Independent System Operator tariff.
12. Specifies that electric vehicle grid integration strategies shall not require the use of any specific technology.
13. Authorizes electric vehicle grid integration to be achieved using multiple strategies, including, but not limited to, electrical rate design and the adoption of technology and customer services that help provide net benefits to ratepayers, as specified.
14. Authorizes the CPUC to adopt a revised definition for “electric vehicle grid integration” through a new or existing proceeding to replace the specified definition in this bill. Any revised definition of “electric vehicle grid integration” adopted by the CPUC shall be applicable to load-serving entities, as specified.
15. Makes the following findings and declarations:
    1. State policy incentivizes and encourages the increased use of EVs, and relies, in part, on the ratepayers of electrical corporations to fund policies intended to increase the usage of EVs;
    2. Changes in electrical demand and generation have created escalating peak and low periods of electrical supply and demand, and the cost of wholesale electricity and electricity delivery during peak demand periods is typically greater than during other periods;
    3. It is feasible and practicable to adjust the period during which an EV charges, in part or in full, to reduce its cost impact during periods of peak demand or grid congestion, to utilize available renewable electric generation, to avoid curtailments of renewable electric generation, and to provide reliability services; and,
    4. Time-of-use rates for customers with EVs can reduce costs or mitigate cost increases for all ratepayers due to increased usage of EVs by incentivizing EV charging at periods of low demand and low grid congestion.
16. Specifies that it is the policy of the state and the intent of the Legislature to maximize net ratepayer and grid benefits from transportation electrification and reduce costs or mitigate cost increases for all ratepayers due to increased usage of EVs by accelerating electric vehicle grid integration and by ensuring that any investments in transportation electrification do not foreclose the electric vehicle grid integration potential of these investments.

EXISTING LAW:

1. Requires the CPUC, in consultation with the California Air Resources Board (CARB) and the California Energy Commission (CEC), to direct electrical corporations to file applications for programs and investments to accelerate widespread transportation electrification to reduce dependence on petroleum, meet air quality standards, achieve the goals set forth in the Charge Ahead California Initiative, as specified, and reduce emissions of greenhouse gas (GHG) to 40 percent below 1990 levels by 2030, and to 80 percent below 1990 levels by 2050. Programs proposed by electrical corporations shall seek to minimize overall costs and maximize overall benefits. Requires the CPUC to approve, or modify and approve, programs and investments in transportation electrification, including those that deploy charging infrastructure, via a reasonable cost recovery mechanism, as specified, do not unfairly compete with nonutility enterprises as specified, include performance accountability measures, and are in the interests of ratepayers, as specified. (Public Utilities Code (PUC) Section 740.12 (b))
2. Requires the CPUC to review data concerning current and future electric transportation adoption and charging infrastructure utilization prior to authorizing an electrical corporation to collect new program costs related to transportation electrification in customer rates. If market barriers unrelated to the investment made by an electric corporation prevent electric transportation from adequately utilizing available charging infrastructure, the CPUC shall not permit additional investments in transportation electrification without a reasonable showing that the investments would not result in long-term stranded costs recoverable from ratepayers. (PUC Section 740.12 (c))
3. Defines “transportation electrification” to mean the use of electricity from external sources of electrical power, including the electrical grid, for all or part of vehicles, vessels, trains, boats, or other equipment that are mobile sources of air pollution and greenhouse gases and the related programs and charging and propulsion infrastructure investments to enable and encourage this use of electricity. (PUC Section 237.5)
4. Requires all charges demanded or received by any public utility, or by any two or more public utilities, for any product or commodity furnished or to be furnished or any service rendered or to be rendered to be just and reasonable, as specified. Requires every public utility to furnish and maintain such adequate, efficient, just, and reasonable service, instrumentalities, equipment, and facilities, including telephone facilities, as specified, as are necessary to promote the safety, health, comfort, and convenience of its patrons, employees, and the public. (PUC Section 451)
5. Requires the CPUC, in cooperation with CEC, CARB, air quality management districts and air pollution control districts, regulated electrical and gas corporations, and the motor vehicle industry, to 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. (PUC Section 740.3)
6. Requires the CPUC, in consultation with CEC, CARB, 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 plug-in hybrid and EVs, as specified. (PUC Section 740.2)

FISCAL EFFECT: Unknown. This bill has been keyed fiscal by the Legislative Counsel.

COMMENTS:

1. Authors Statement: According to the author, “California has set ambitious goals to electrify its transportation sector, which will dramatically increase the electrical load from our vehicles. But the State’s electrical grid already faces many challenges, in part due to our increased use of intermittent renewable energy. If EV charging is grid integrated, it can mitigate this problem and provide a variety of benefits, including but not limited to, shifting load out of peak demand periods, absorbing excess solar generation during midday, and shedding load as demand rapidly ramps. SB 676 ensures that Vehicle Grid Integration (VGI) is a genuine part of the conversation as the State continue to invest billions of dollars in transportation electrification, with significant investments from ratepayers.”
2. Background: The transportation sector represents 50 percent of the California’s GHG emissions and 80 percent of nitrogen oxides. Reducing carbon emissions from the transportation sector is a critical step needed in order to meet California’s climate goals and clean air standards. Zero-emissions Vehicles (ZEVs) run on electricity stored in batteries instead of fossil fuels, such as plug-in EVs, plug in hybrid EVs, and hydrogen fuel cell EVs. ZEVs are a vital component of the state’s effort to reach its GHG emission reduction goals. The availability of new vehicle models, improved battery technology resulting in greater driving range, increase availability of electric charging infrastructure, and federal and state incentives have all contributed to expanding the ZEV market. At the end of 2017, California had over 350,000 plug in EVs on the road.
3. California’s ZEV Action Plan: In 2012, Governor Brown issued Executive Order B-16-12 which directed the CPUC and other state agencies to help accelerate the market for ZEVs to support the adoption of 1.5 million ZEVs on California roads by 2025 and the integration of plug-in EV charging into the state’s electricity grid by 2020. In October 2016, the Governor’s Interagency Working Group on ZEVs released its 2016 ZEV Action Plan, which provided an updated roadmap towards reaching the states ZEV goals. The plan highlighted certain priorities for ZEV development and adoption including, raising consumer awareness and education about ZEVs; ensuring ZEVs are accessible to a broad range of Californians; making ZEV technologies commercially viable in targeted sectors; and aiding ZEV market growth beyond California.

In January 2018, Governor Brown issued Executive Order B-48-18 directing all state entities to work with the private sector and all appropriate levels of government to put at least five million ZEVs on California roads by 2030. The executive order directed all state entities to spur the construction and installation of ZEV charging and fueling infrastructure, find ways to streamline ZEV infrastructure installation processes, and carry out additional programs and actions to reach the goal.

1. Transportation Electrification: Since 2012, California’s EV market has grown significantly through the expansion of federal and state incentives and programs. In 2015, the Legislature passed SB 350 (De Leon) Chapter 547, Statutes of 2015, which set 2030 GHG reduction targets to be achieved through a variety of measures, including widespread transportation electrification. In 2016, the CPUC directed California’s investor owned utilities (IOUs) to submit applications proposing projects aimed at achieving the transportation electrification goals in SB 350. The CPUC has since approved nearly $750 million in IOU transportation electrification infrastructure programs and is still reviewing proposals for nearly $1 billion in additional investment programs.

To meet the demands of increasing EVs on the road, the State will need to develop comprehensive plans to accommodate EVs and consider its impact on other sectors of the state. This includes addressing questions on how to install thousands of public EV chargers, how to facilitate at-home charging, what impact will EVs have on our electric grid, and what type of technology and methods need to be established in order to create uniform standards and pricing. Aside from the CPUCs efforts on SB 350, the CEC is conducting research and demonstrations to identify and develop strategic opportunities to adopt charging infrastructure protocols that can help avoid energy waste, manage peak load, and develop infrastructure plans for EVs. Furthermore, CARB has the authority to adopt requirements to ensure public charging stations have interoperable billing standards to ensure that EV drivers are provided clear information of any change in price and have the abilty to opt in or out of such price changes.

1. Vehicle Grid Integration: Transportation electrification can reduce the states reliance on petroleum but it can also increase its use of electricity if EV charging is not optimized with the grid. Without taking steps to better align EV charging patterns with excess renewable energy availability throughout the day, EVs may actually shift emissions from the transportation sector to the electricity sector potentially offsetting some of the benefits of owning an EV. VGI is a broad term that encompasses the many ways in which an EV can provide grid services by optimizing a EVs interaction with the electric grid. VGI can help mitigate issues by optimizing EV charging to ensure an increase in EV charging does not increase the use of electricity during peak hours; when energy cost the most to generate, therefore requiring additional generation during hours when the electric grid is most under stress.
2. VGI Working Group: If done correctly, VGI has the potential to reduce overall operating cost for EV owners and building managers, delay or offset utility distribution upgrade and maintenance investments, and/or mitigate wholesale energy prices. In 2017, the CPUC convened a working group to gather input from stakeholders in developing policies that support VGI. In October 2018, the working group released a staff report that noted that a more holistic approach involving communication protocols, market facilitation, wholesale and retail rate improvements, load management, demand response programs and other policy changes would be necessary to enable the implementation of VGI in some cases. In December 2018, the CPUC issued R.18-12-006, which directed its Energy Division to develop a process for a new interagency, multi-stakeholder working group focused on developing the cost and benefits of VGI use cases in conjunction with the implementation of the statewide VGI roadmap.

However, according to the author the state has not done enough to adequately and proactively consider how to mitigate the electric load impact of transportation electrification. This bill requires the CPUC in an existing proceeding to establish strategies and quantifiable metrics to maximize the use of feasible and cost-effective electric vehicle grid integration by January 1, 2030. As a result, this bill would set in motion for the CPUC to develop specific standards and metrics that would jump start VGI. California has hosted a number of successful pilot programs on VGI, however, it is important to keep in mind that VGI is still in a nascent stage.

1. Prior Legislation: AB 2127 (Ting) of 2018 required CEC, working with CARB and the CPUC, to prepare a statewide assessment of EV charging infrastructure needs. Status: Chaptered by the Secretary of State, Chapter 365, Statutes of 2018.

SB 1000 (Lara) of 2018 required CEC to evaluate the extent to which charging infrastructure is proportionately deployed and use funds to more proportionately deploy EV chargers as needed; prohibited cities and counties from restricting EV charging access, and required the CPUC to explore facilitating the development of technologies related to charging. Status: Chaptered by the Secretary of State, Chapter 368, Statutes of 2018.

SB 350 (De Leon) of 2015 set GHG reduction targets to be achieved by 2030 through a variety of measures, including supporting electrification of the transportation system and established requirements of the CPUC in adopting EV charging proposals from the IOUs. Status: Chaptered by the Secretary of State, Chapter 547, Statutes of 2015.

SB 1275 (De Leon) of 2014 established the Charge Ahead California Initiative to be administered by CARB, in consultation with the CEC, air pollution control and air quality management districts, and the public. Specifies that the goals of the initiative is to, among other things, place in service at least one million ZEVs by January 1, 2023, and to increase access for disadvantaged, low-income, and moderate-income communities and consumers to ZEVs. Status: Chaptered by the Secretary of State, Chapter 530, Statutes of 2014.

1. Double-referral: This bill is double referred, having been previously heard by the Assembly Committee on Utilities and Energy on July 3, 2019 and approved on a 12-0 vote.

REGISTERED SUPPORT / OPPOSITION:

Support (prior version)

Advanced Energy Economy

American Honda Motor Company, Inc.

American Wind Energy Association

California Efficiency and Demand Management Council

California Energy Storage Alliance

California League of Conservation Voters

eMotorWerks

Enel X North America

Environmental Defense Fund

EVBox Inc.

Electric Vehicle Charging Association

Greenlots

Natural Resources Defense Council

Opposition (prior version)

California Community Choice Association (unless amended)

California Municipal Utilities Association (unless amended)

City of Monterey

City of San Jose

Indivisible South Bay - LA

San Jose Community Energy Advocates

Sacramento Municipal Utility District (unless amended)

Analysis Prepared by: Edmond Cheung / C. & C. / (916) 319-2637

Date of Hearing: July 3, 2019

ASSEMBLY COMMITTEE ON UTILITIES AND ENERGY

Chris Holden, Chair

SBPCA Bill Id:SB 676

Author:(Bradford) – As Amended Ver:May 15, 2019

SENATE VOTE: 38-0

SUBJECT: Transportation electrification: electric vehicles: grid integration

SUMMARY: This bill requires the California Public Utilities Commission (CPUC) to establish strategies and quantifiable metrics to maximize the use of electric vehicle integration by January 1, 2030. The CPUC is mandated to develop vehicle to grid integration strategies that reflect the proportionate share of each load serving entities estimated increase in electrical demand attributable to electric vehicle charging.

• Defines “electric vehicle grid integration” to mean any action taken by a grid-connected electric vehicle, operator of a grid-connected electric vehicle, or electric vehicle supply equipment to alter the time, charging level, or location at which grid-connected electric vehicles charge or discharge in a manner that optimizes the electric vehicle’s interaction with the electrical grid and provides benefits or services to the electrical grid, ratepayers, the operator of a grid-of a grid-connected electric vehicle or site host.
• Describes the electric vehicle grid integration strategies, which must be achieved to include electrical rate design and the adoption of technology and customer services that help achieve the following policies: 1) Increasing electrical grid asset utilization; 2) Avoiding distribution infrastructure upgrades; 3) Integrating renewables; 4) Reducing the cost of electricity supply; and 5) Offering reliability services.
• Mandates that strategies and metrics be consistent with the following and may be updated at any time by the CPUC: 1) Time-of use rates; 2) Expenditures in the interest of ratepayers; and 3) Proportionate share of each investor owned utilities (IOU), community choice aggregator (CCA) and energy service provider (ESP) estimated increase in electrical demand attributable to EV charging.
• In approving or modifying transportation electrification applications, the CPUC shall to the maximum extent possible give priority to applications that further vehicle to grid integration.
• Mandates CCAs, as part of the integrated resource plan, to quantify how their current and planned programs, rates and investments in transportation electrification further the provisions of the section.
• Mandates the local publicly owned utilities (POU), as part of their integrated resource plan, to establish vehicle grid integration strategies and quantify how the POUs current and planned programs may further the electric vehicle grid integration strategies it has established.
• Mandate IOUs in their applications for investments in electrification to quantify how investments in electric vehicle grid integration (VGI) will advance VGI.
• The commission shall in existing proceedings review the IOU and CCA’s annual measurable progress and may issue recommendations to achieve vehicle to grid strategies.

EXISTING LAW:

1. Defines transportation electrification as the use of electricity from external sources of electrical power, including the electrical grid, for all or part of vehicles, vessels, trains, boats, or other equipment that are mobile sources of air pollution and greenhouse gas (GHG) and associated programs and charging and propulsion infrastructure to support this use of electricity. (Public Utilities Code §237.5)
2. Mandates the CPUC, in consultation with the CEC, State Air Board, electrical corporations and motor vehicle to evaluate policies to develop infrastructure to overcome any barriers to the widespread deployment and use of plug-in hybrid and electric vehicles and adopt rules by July 1, 2011. (Public Utilities Code §740.2)
3. Requires the CPUC to direct IOUs to file applications for investments to accelerate transportation electrification, reduce reliance on petroleum, and meet certain climate goals. Allows the CPUC to approve or amend applications for transportation electrification investments. IOUs are also authorized to recover reasonable costs for approved investments from ratepayers if they are consistent with certain requirements. (Public Utilities Code §740.12(b))
4. Requires the CPUC to review data related to current and future transportation electrification adoption and charging infrastructure prior to allowing an IOU to collect new program costs from ratepayers. (Public Utilities Code §740.12(c))
5. Requires the California Energy Commission (CEC) to include in the Integrated Energy Policy Report (IEPR), a comparison of the POUs annual targets, actual energy efficiency savings and demand reductions. The CEC is also required to provide recommendations to the POU if they determine that improvements can be made to achieve all cost-effective, reliable, feasible energy saving and demand reductions to enable achievement of statewide targets. (Public Resources Code § 25305.2)
6. Requires each POU with an annual electrical demand exceeding 700 gigawatt (GW) hours to adopt an integrated resources plan (IRP) that helps ensure that the POU will meet climate goals for the electricity sector. An IRP must be updated at least once every five years and must address procurement plans for the following: a) Energy efficiency and demand response resources; b) Energy storage requirements; c) Transportation electrification; d) A diversified energy resource procurement portfolio; and e) Resource adequacy requirements. (Public Resources Code §9621)
7. Requires each POU to submit IRP updates to the CEC. The CEC shall review the IRPs and provide recommendations to correct deficiencies. (Public Resources Code §9622 (b))

BACKGROUND:

Definition of Vehicle to Grid: According to the CEC, Vehicle Grid Integration (VGI) is a very broad term that encompasses the ways in which a vehicle can provide benefits or services to the grid, to society and the EV driver by optimizing plug-in electric (PEV) interaction with the electrical grid. VGI includes active management of electricity such as bi-directional management which is vehicle-to-grid or unidirectional management. It also includes managed charging and/or active management of charging levels by ramping up or down charging. VGI can also encompass passive solutions such as: customer response to existing rates; design of improved utility rates (e.g. time-of-use (TOU) charges; demand charges and customer fees; and design of the grid to accommodate EVs while reducing grid impacts to the degree possible.

Transportation Sector Greenhouse Gas Emissions. According to a 2018 CEC staff report entitled, “California Plug-In Electric Vehicle Infrastructure Projections: 2017-2025”, the transportation sector represents the largest source of air pollution in California, accounting for nearly 80 percent of the nitrogen oxide emissions from fossil fuel production and refining and accounting for nearly half of the greenhouse gas emissions in California. Specifically, direct fuel combustion emissions from light-duty vehicles accounted for more than one-quarter (26 percent) of the state’s carbon footprint. As such, Governor Brown signed Executive Order B-16-2012 which set in motion a statewide efforts to electrify the transportation sector, principally among the goals to achieve 1.5 million zero emission vehicles by 2025. In California, as of the end of 2017, there were 350,000 plug in electric vehicles.

EV Forecasted Load. The Energy Commission’s March 2018 staff report on California Plug-In Electric Vehicle Infrastructure Projections: 2017-2025 forecasted EV load in 2025 would be extremely variable over the course of an average day — shifting from a low of roughly 100MW around 6AM on a weekday and peaking at roughly 975MW around 7PM. This would be a substantial variable load increase during peak demand, when the grid is already under stress and where marginal increases in demand drive up procurement costs significantly. VGI can help mitigate this problem by optimizing EV charging.

Transportation electrification and ratepayer investments. The CEC, CPUC, and the State Air Resources Board (ARB) are each administering investments in transportation electrification infrastructure. However, IOU ratepayers are providing the largest source of funding for these infrastructure investments. In 2016, the CPUC directed the IOUs to file applications for programs to accelerate transportation electrification in compliance with SB 350 (De León, Chapter 547, Statutes of 2015). In 2018, the CPUC authorized approximately $750 million of ratepayer-funded IOU transportation electrification infrastructure programs. The CPUC is reviewing proposals for another $1 billion in additional investments. A significant amount of IOU investments in transportation electrification are through distribution upgrades that ensure that a facility is ready for EV charger installation and rate design programs that encourage EV owners to charge in a grid-responsive manner.

EV charging implications on the grid: There are times that California produces excess renewable energy largely due to solar production on rooftops and large scale generators at remote location such as the desert in Southern California. At times, charging electric vehicles during the middle of the day aligns with time of use rates and utilizes generation that might otherwise be curtailed. Conversely, certain times of the year if vehicles are charged at 6:00-8:30 p.m. when coming home from work likely increases demand for electricity generated by natural gas and shifts some emissions from the transportation sector to the electricity sector if EV charging occurs at peak demand periods. The chart on the left illustrates the projections for weekday charging load and the chart on the right is weekend charging load.

FISCAL EFFECT SENATE: Appropriation: No Fiscal Com.: Yes Local: Yes

COMMENTS:

1. Author’s Statement: “California has set ambitious goals to electrify its transportation sector, which will dramatically increase the electrical load from our vehicles. But the State’s electrical grid already faces many challenges, in part due to our increased use of intermittent renewable energy. If EV charging is grid integrated, it can mitigate this problem and provide a variety of benefits, including but not limited to, shifting load out of peak demand periods, absorbing excess solar generation during midday, and shedding load as demand rapidly ramps. SB 676 ensures that VGI is a part of the conversation as the State continues to invest billions of dollars in transportation electrification, with significant investments from ratepayers.”

7) Related/Prior Legislation.

AB 2127 (Ting, Chapter 365, Statutes of 2018) required the CEC to conduct a statewide assessment of vehicle charging infrastructure needed to support the goal of putting five million EVs on the road in California by 2030.

SB 1000 (Lara, Chapter 368, Statutes of 2018) required the CEC to evaluate the extent to which charging infrastructure is proportionately deployed and use funds to more proportionately deploy chargers as needed. The bill also required the CPUC to explore facilitating the development of technologies that promote grid integration and adopting a tariff for heavy-duty EVs that encourages charging during periods of excess grid capacity.

SB 350 (De León, Chapter 547, Statutes of 2015), the Clean Energy and Pollution Reduction Act of 2015, established new clean energy, clean air and GHG reduction goals and established the IRP process through which electrical corporations file procurements, including transportation electrification investments.

REGISTERED SUPPORT / OPPOSITION:

Support

Advanced Energy Economy
American Honda Motor Company
American Wind Energy Association
California Efficiency + Demand Management Council 
California Energy Efficiency Industry Council
California Energy Storage Alliance
California League of Conservation Voters
Electric Vehicle Charging Association
Emotor Werks
Enel X
Environmental Defense Fund
Evbox Inc
Greenlots
National Resources Defense Council

Oppose

California Community Choice Association
Indivisible South Bay La
Mayor Clyde Roberson/ City of Monterey
San Jose Community Energy Advocates

50 People on behalf of Community Choice Aggregator

Oppose Unless Amended

California Municipal Utilities Association
Sacramento Municipal Utility District

Analysis Prepared by: Mary McDonald / U. & E. /

 THIRD READING  

Bill No: SB 676

Author: Bradford (D), et al.

Amended: 5/15/19

Vote: 21

SENATE ENERGY, U. & C. COMMITTEE: 13-0, 4/24/19

AYES: Hueso, Moorlach, Bradford, Chang, Dodd, Hertzberg, Hill, McGuire, Rubio, Skinner, Stern, Stone, Wiener

SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8

SUBJECT: Transportation electrification: electric vehicles: grid integration

SOURCE: Author

DIGEST:

This bill requires the California Public Utilities Commission (CPUC) and the California Energy Commission (CEC) to establish electric vehicle-grid integration strategies for certain community choice aggregators (CCAs), investor-owned utilities (IOUs), local publicly owned electric utilities (POUs), and electric service providers (ESPs).

Senate Floor Amendments of 5/15/19 clarify terms regarding operators of grid-connected electric vehicles and add coauthors.

ANALYSIS:

Existing law:

1. Defines transportation electrification as the use of electricity from external sources of electrical power, including the electrical grid, for all or part of vehicles, vessels, trains, boats, or other equipment that are mobile sources of air pollution and greenhouse gas (GHG) and associated programs and charging and propulsion infrastructure to support this use of electricity. (Public Utilities Code §237.5)
2. Requires the CPUC to direct IOUs to file applications for investments to accelerate transportation electrification, reduce reliance on petroleum, and meet certain climate goals. Allows the CPUC to approve or amend applications for transportation electrification investments. IOUs are also authorized to recover reasonable costs for approved investments from ratepayers if they are consistent with certain requirements. (Public Utilities Code §740.12(b))
3. Requires the CPUC to review data related to current and future transportation electrification adoption and charging infrastructure prior to allowing an IOU to collect new program costs from ratepayers. (Public Utilities Code §740.12(c))
4. Requires each POU with an annual electrical demand exceeding 700 gigawatt hours to adopt an integrated resources plan (IRP) that helps ensure that the POU will meet climate goals for the electricity sector. An IRP must be updated at least once every five years and must address procurement plans for the following:
   1. Energy efficiency and demand response resources,
   2. Energy storage requirements,
   3. Transportation electrification,
   4. A diversified energy resource procurement portfolio, and
   5. Resource adequacy requirements.

This bill:

1. Defines “electric vehicle (EV)-grid integration” as any action taken by a grid-connected EV, operator of a grid-connected EV, or EV supply equipment to alter the time or rate at which the EV charges or discharges, in a manner that optimizes an EV’s interaction with the grid and provides benefits or services to the grid, ratepayers, EV driver, or charger site host. These actions can include, but are not limited to, adopting technologies or rate structures that provides net benefits to ratepayers by doing any of the following:
   1. Increase grid asset utilization
   2. Avoid distribution infrastructure upgrades
   3. Integrate renewable energy resources
   4. Reduce the cost of electricity supply
   5. Offer reliability services

This definition does not require the use of specific technology to achieve these benefits.

1. Requires the CPUC, by December 31, 2020, to establish strategies for EV-grid integration that would shift, by January 1, 2030, at least 25 percent of the estimated EV charging load increase from customers of IOUs, CCAs, and ESPs. The strategies must be consistent with the following:
   1. Expenditures on EV-grid integration must be in the best interest of ratepayers, comply with requirements for just and reasonable charges, and support cost savings for ratepayers by reducing the cost of wholesale electricity supply, the need for increased generation, and the need for increased grid infrastructure to meet forecasted demand.
   2. IOUs, CCAs, ESPs, electric car manufacturers, electric fleet operators, and EV service providers shall work to achieve the EV-grid integration targets and sub-targets established by the CPUC.
   3. EV-grid integration strategies must reflect the proportionate share of each IOU, CCA, or ESP’s estimated load increase from EV charging.
2. Requires the CEC, by December 31, 2020, to work with the CPUC to establish EV-grid integration strategies for each POU that files an IRP with the CEC.
3. Requires the CPUC to reference the EV-grid integration strategies in future transportation electrification proceedings, consider how EV-grid integration can defer infrastructure costs and provide3 other benefits, identify how investments will advance the strategies, and give priority to applications that further EV-grid integration strategies.
4. Requires each CCA to quantify how any transportation electrification investments further the EV-grid integration strategies in its IRP filed with the CPUC.
5. Requires each IOU that files an application for transportation electrification investments to quantify how the investments further the EV-grid integration strategies in its application and report its progress in its load research report filing with the CPUC.

Background

Transportation electrification and ratepayer investments. The CEC, CPUC, and the State Air Resources Board (ARB) are each administering investments in transportation electrification infrastructure. However, IOU ratepayers are providing the largest source of funding for these infrastructure investments. In 2016, the CPUC directed the IOUs to file applications for programs to accelerate transportation electrification in compliance with SB 350 (De León, Chapter 547, Statutes of 2015). In 2018, the CPUC authorized approximately $750 million of ratepayer-funded IOU transportation electrification infrastructure programs. The CPUC is reviewing proposals for another $1 billion in additional investments. A significant amount of IOU investments in transportation electrification are through distribution upgrades that ensure that a facility is ready for EV charger installation and rate design programs that encourage EV owners to charge in a grid-responsive manner.

EV load can turn ducks into dragons. California produces excess renewable energy during the middle of the day, sometimes referred to as the “belly of the duck.” Vehicle electrification can reduce reliance on petroleum and increase the use of renewable energy through charging aligned with excess renewable production; however, vehicle electrification can also increase demand for electricity generated by natural gas and shift some emissions from the transportation sector to the electricity sector if EV charging occurs at peak demand periods.

In 2018, the Legislature codified the goal of putting five million EVs on the road by 2030 by passing AB 2127 (Ting, Chapter 365, Statutes of 2018). To the extent that the state accelerates EV deployment to meet this goal, the electricity demand generated by these EVs’ charging patterns could significantly change the shape of California’s electrical load. A 2018 report by the CEC indicates that EV deployment could increase demand by a gigawatt by 2025. The load pattern generated by accelerated EV deployment could more closely resemble a dragon instead of duck. Depending on the location of EV deployment, this demand increase could disproportionately strain some regions more than others, impacting distribution systems at these locations more severely. Without taking steps to better match EV charging patterns with excess renewable energy availability, EVs’ demand increase could increase demand for additional natural gas generation sources and the need for electricity system upgrades to manage the load.

What is vehicle-grid integration? This bill establishes a definition of EV-grid integration that encompasses both the use of technology to modify load and ratemaking that supports charging in response to price signals. This definition is consistent with ongoing efforts to use cost-effective mechanisms to encourage EV charging in response to price signals and grid needs. Existing law does not contain a clear definition of vehicle-grid integration. Currently, a number of activities are included in vehicle-grid integration efforts, including time-of-use rates.

While time-of-use rates are not solely focused on addressing load from EVs, rate design can help send price signals that support conscious efforts by consumers to shift load to non-peak hours. As part of their transportation electrification programs, some IOUs are piloting transportation electrification rate designs that are more dynamic than time-of-use rates. For example, San Diego Gas and Electric Company (SDG&E) is piloting an hourly rate design as part of its Power You Drive program aimed at incentivizing charging at times that optimize overall grid and circuit utilization. Demand data from SDG&E indicates that this rate design program may be effectively incentivizing charging outside the IOU’s peak demand period.

The use of price signals in vehicle-grid integration is crucial to both encouraging load shifting and load stabilizing charging behavior. Shifting EV load to periods when excess renewables are on the grid may not be sufficient to limit stress on distribution systems arising from increased EV charging. Even if load shifts to charge EVs with renewable energy, a sudden increase in charging will still lead to new peak demands that make consistent energy resource management challenging, especially at the local level. As a result, using hardware that does not have the capability to respond to price signals and take advantage of more dynamic rate designs is likely not sufficient to achieve significant benefits associated with vehicle-grid integration.

In a 2018 staff report on vehicle-grid integration communication protocols, CPUC Energy Division staff acknowledged that hardware alone would not be sufficient to address load issues associated with accelerated EV deployment. The report noted that a more holistic approach involving communication protocols, market facilitation, wholesale and retail rate improvements, load management, demand response programs and other policy changes would be necessary to enable the implementation of vehicle-grid integration in some cases. The CPUC is already in the process of exploring mechanisms for ensure that vehicle-grid integration investments support communication protocols that enable hardware to respond to price signals and grid events.

Strategies provide flexibility and reporting ensures accountability. This bill requires the CPUC and CEC to establish EV-grid integration strategies for certain load-serving entities (LSEs), including IOUs, CCAs, ESPs, and POUs that file IRPs. This bill also requires IOUs to quantify how their investments further the strategies in their transportation electrification applications, and it requires the CCAs to report similar information in their IRPs. Some IOUs are already providing information about how their investments are supporting EV-grid integration CPUC in their applications for transportation electrification programs. In addition to requiring IOUs to quantify how proposed investments would further EV-grid integration strategies, this bill also requires IOUs to report their progress on furthering the strategies as part of their electric vehicle load research and cost studies filed with the CPUC.

While some CCAs are making transportation electrification investments, CCAs do not file applications for these investments with the CPUC. Existing law does not require LSEs filing IRPs at the CPUC to identify their transportation electrification investments; as a result, CCAs’ transportation electrification investments are not necessarily reported to the CPUC. While CCAs may be making investments that support EV-grid integration, the lack of uniformly reported information makes it difficult to determine the degree to which ratepayers will experience benefits from these investments and how ratepayers will experience those benefits.

Unlike CCAs and IOUs, POUs report their transportation electrification investments in their IRPs. This bill requires the CEC to work with the CPUC to develop EV-grid integration strategies for POUs that submit IRPs. This bill does not require POUs to make EV-grid integration or transportation electrification investments; it requires the CEC to develop strategies for how POU transportation electrification investments can support EV-grid integration goals. These strategies would likely be relevant only to POUs with an annual electrical demand exceeding 700 gigawatt hours that also make transportation electrification investments. The CEC already works with the CPUC on EV-grid integration policies through the Vehicle-Grid Integration Working Group.

By requiring the CPUC and CEC to establish EV-grid integration strategies for LSE investments, this bill provides LSEs with the flexibility to make investments that reflect the degree to which the LSE is impacted by EV deployment among its customers. Even if EV deployment accelerates, it will likely be disproportionate throughout the state. As a result, vehicle-grid integration investments may only be beneficial for ratepayers to the extent that they align with geographic EV deployment and drivers’ charging patterns. Information from the CEC indicates that if EV adoption follows trends in new vehicle purchase rates, approximately 90 percent of plug-in EVs will be deployed in counties identified within the four largest metropolitan planning regions of California (Southern California, San Francisco Bay Area, San Diego County, and the greater Sacramento area) by 2025.

Related/Prior Legislation

AB 2127 (Ting, Chapter 365, Statutes of 2018) required the CEC to conduct a statewide assessment of vehicle charging infrastructure needed to support the goal of putting five million EVs on the road in California by 2030.

SB 1000 (Lara, Chapter 368, Statutes of 2018) required the CEC to evaluate the extent to which charging infrastructure is proportionately deployed and use funds to more proportionately deploy chargers as needed. The bill also required the CPUC to explore facilitating the development of technologies that promote grid integration and adopting a tariff for heavy-duty EVs that encourages charging during periods of excess grid capacity.

SB 350 (De León, Chapter 547, Statutes of 2015), the Clean Energy and Pollution Reduction Act of 2015, established new clean energy, clean air and GHG reduction goals and established the IRP process through which electrical corporations file procurements, including transportation electrification investments.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: Yes

SUPPORT: (Verified 5/16/19)

Advanced Energy Economy

American Honda Motor Co., Inc.

American Wind Energy Association

California Efficiency + Demand Management Council

California League of Conservation Voters

Electric Vehicle Charging Association

eMotorWerks

Enel X

Environmental Defense Fund

EVBox

Greenlots

Natural Resources Defense Council

OPPOSITION: (Verified 5/16/19)

California Municipal Utilities Association

ARGUMENTS IN SUPPORT: According to the author:

California has set ambitious goals to electrify its transportation sector, which will dramatically increase the electrical load from our vehicles. But the State’s electrical grid already faces many challenges, in part due to our increased use of intermittent renewable energy. If EV charging is grid integrated, it can mitigate this problem and provide a variety of benefits, including but not limited to, shifting load out of peak demand periods, absorbing excess solar generation during midday, and shedding load as demand rapidly ramps. SB 676 ensures that vehicle-grid integration is a part of the conversation as the State continue to invest billions of dollars in transportation electrification, with significant investments from ratepayers.

ARGUMENTS IN OPPOSITION: The California Municipal Utilities Association (CMUA) opposes this bill unless it is amended to remove the mandate for the CEC to develop EV-grid integration strategies for POUs that file an IRP. In opposition, CMUA states the following:

Publicly owned utilities are locally owned and governed and their actions are driven by the priorities of their communities and customers. By retaining local decision-making and authority, POUs are able to provide reliable, affordable and sustainable power. A one size fits all strategy will not benefit – nor reflect – the diverse needs of communities in California.

Prepared by: Sarah Smith / E., U., & C. / (916) 651-4107

5/18/19 13:24:40

**** END ****

SENATE COMMITTEE ON ENERGY, UTILITIES AND COMMUNICATIONS

Senator Ben Hueso, Chair

2019 - 2020 Regular

Bill No: SB 676 Hearing Date: 4/24/2019

SUBJECT: Transportation electrification: electric vehicles: grid integration

DIGEST: This bill requires the California Public Utilities Commission (CPUC) and the California Energy Commission (CEC) to establish electric vehicle-grid integration targets for certain community choice aggregators (CCAs), investor-owned utilities (IOUs), local publicly owned electric utilities (POUs), and electric service providers (ESPs).

ANALYSIS:

Existing law:

1. Defines transportation electrification as the use of electricity from external sources of electrical power, including the electrical grid, for all or part of vehicles, vessels, trains, boats, or other equipment that are mobile sources of air pollution and greenhouse gas (GHG) and associated programs and charging and propulsion infrastructure to support this use of electricity. (Public Utilities Code §237.5)
2. Requires the CPUC to direct IOUs to file applications for investments to accelerate transportation electrification, reduce reliance on petroleum, and meet certain climate goals. Allows the CPUC to approve or amend applications for transportation electrification investments. IOUs are also authorized to recover reasonable costs for approved investments from ratepayers if they are consistent with certain requirements. (Public Utilities Code §740.12(b))
3. Requires the CPUC to review data related to current and future transportation electrification adoption and charging infrastructure prior to allowing an IOU to collect new program costs from ratepayers. (Public Utilities Code §740.12(c))
4. Requires each POU with an annual electrical demand exceeding 700 gigawatt hours to adopt an integrated resources plan (IRP) that helps ensure that the POU will meet climate goals for the electricity sector. An IRP must be updated at least once every five years and must address procurement plans for the following:
   1. Energy efficiency and demand response resources,
   2. Energy storage requirements,
   3. Transportation electrification,
   4. A diversified energy resource procurement portfolio, and
   5. Resource adequacy requirements.

This bill:

1. Defines “electric vehicle (EV)-grid integration” as any action taken by a grid-connected EV or EV supply equipment to change the time or rate at which the EV charges or discharges, in a manner that optimizes an EV’s interaction with the grid and provides benefits or services to the grid, ratepayers, EV driver, or charger site host. These actions can include, but are not limited to, increasing grid asset utilization, avoiding distribution infrastructure upgrades, integrating renewable energy resources, reducing the cost of electricity supply, or offering reliability services, in a manner that provides ratepayers with a net benefit. These actions do not require the use of specific technology to achieve these benefits.
2. Requires the CPUC, by December 31, 2020, to establish targets for EV-grid integration in the service territory of each IOU with at least 200,000 customers; sub-targets for CCAs with at least 200,000 customers in an IOU service territory; and sub-targets for ESPs as the CPUC deems just and reasonable. Targets and sub-targets established the CPUC must be consistent with the following:
   1. Expenditures on EV-grid integration must be in the best interest of ratepayers, comply with requirements for just and reasonable charges, and support cost savings for ratepayers by reducing the cost of wholesale electricity supply, the need for increased generation, and the need for increased grid infrastructure to meet forecasted demand.
   2. IOUs, CCAs, ESPs, electric car manufacturers, electric fleet operators, and EV service providers shall work to achieve the EV-grid integration targets and sub-targets established by the CPUC.
   3. EV-grid integration targets and sub-targets must be at least 10 percent of annual total estimated EV load in that service territory by 2025 and shall be increased annually to achieve at least 25 percent of annual total estimated EV load by 2030.
3. Requires the CEC, by December 31, 2020, to establish targets for EV-grid integration in the service territory of each POU with at least 200,000 customers. The CEC’s targets must be consistent with the goals the CPUC’s targets and sub-targets.
4. Requires the CPUC to reference the targets and sub-targets developed under this bill in future transportation electrification proceedings and consider how EV-grid integration can mitigate electric infrastructure upgrade costs.

Background

Transportation electrification and ratepayer investments. The CEC, CPUC, and the State Air Resources Board (ARB) are each administering investments in transportation electrification infrastructure. However, IOU ratepayers are providing the largest source of funding for these infrastructure investments. In 2016, the CPUC directed the IOUs to file applications for programs to accelerate transportation electrification in compliance with SB 350 (De León, Chapter 547, Statutes of 2015). In 2018, the CPUC authorized approximately $750 million of ratepayer-funded IOU transportation electrification infrastructure programs. The CPUC is reviewing proposals for another $1 billion in additional investments. A significant amount of IOU investments in transportation electrification are through distribution upgrades that ensure that a facility is ready for EV charger installation and rate design programs that encourage EV owners to charge in a grid-responsive manner.

POUs also make transportation electrification investments, which they identify in their IRPs. CCAs may make transportation electrification investments; however, existing law does not require CCAs to file applications for these investments or report these investments through the IRP process at the CPUC.

EV load can turn ducks into dragons. California produces excess renewable energy during the middle of the day, sometimes referred to as the “belly of the duck.” Vehicle electrification can reduce reliance on petroleum and increase the use of renewable energy through charging aligned with excess renewable production; however, vehicle electrification can also increase demand for electricity generated by natural gas and shift some emissions from the transportation sector to the electricity sector if EV charging occurs at peak demand periods.

In 2018, the Legislature codified the goal of putting five million EVs on the road by 2030 by passing AB 2127 (Ting, Chapter 365, Statutes of 2018). To the extent that the state accelerates EV deployment to meet this goal, the electricity demand generated by these EVs’ charging patterns could significantly change the shape of California’s electrical load. A 2018 report by the CEC indicates that EV deployment could increase demand by a gigawatt by 2025. The load pattern generated by accelerated EV deployment could more closely resemble a dragon instead of duck. Depending on the location of EV deployment, this demand increase could disproportionately strain some regions more than others, impacting distribution systems at these locations more severely. Without taking steps to better match EV charging patterns with excess renewable energy availability, EVs’ demand increase could increase demand for additional natural gas generation sources and the need for electricity system upgrades to manage the load.

What is vehicle-grid integration? This bill defines EV-grid integration as actions taken by a grid-connected EV or EV supply equipment to change the time or rate at which the EV charges or discharges to optimize the EV’s interaction with the grid and provide benefits to the grid, ratepayers, EV drivers, or charger hosts. Existing law does not contain a clear definition of vehicle-grid integration. Currently, a number of activities are currently included in vehicle-grid integration efforts, including time-of-use rates.

While time-of-use rates are not solely focused on addressing load from EVs, rate design can help send price signals that support conscious efforts by consumers to shift load to non-peak hours. As part of their transportation electrification programs, some IOUs are piloting transportation electrification rate designs that are more dynamic than time-of-use rates. For example, San Diego Gas and Electric Company (SDG&E) is piloting an hourly rate design as part of its Power You Drive program aimed at incentivizing charging at times that optimize overall grid and circuit utilization. Demand data from SDG&E indicates that this rate design program may be effectively incentivizing charging outside the IOU’s peak demand period.

The use of price signals in vehicle-grid integration is crucial to both encouraging load shifting and load stabilizing charging behavior. Shifting EV load to periods when excess renewables are on the grid may not be sufficient to limit stress on distribution systems arising from increased EV charging. Even if load shifts to charge EVs with renewable energy, a sudden increase in charging will still lead to new peak demands that make consistent energy resource management challenging, especially at the local level. As a result, using hardware that does not have the capability to respond to price signals and take advantage of more dynamic rate designs is likely not sufficient to achieve significant benefits associated with vehicle-grid integration.

In a 2018 staff report on vehicle-grid integration communication protocols, CPUC Energy Division staff acknowledged that hardware alone would not be sufficient to address load issues associated with accelerated EV deployment. The report noted that a more holistic approach involving communication protocols, market facilitation, wholesale and retail rate improvements, load management, demand response programs and other policy changes would be necessary to enable the implementation of vehicle-grid integration in some cases. The CPUC is already in the process of exploring mechanisms for ensure that vehicle-grid integration investments support communication protocols that enable hardware to respond to price signals and grid events.

Target setting effectiveness may depend on EV deployment and investment type. This bill requires the CPUC and CEC to set vehicle-grid integration targets for certain load-serving entities (LSEs), including IOUs, large CCAs, large POUs, and, potentially, ESPs. Under this bill, the target setting would be based on each applicable LSE’s service territory and load. However, target setting may be challenging for vehicle-grid integration strategies, like rate design, that are not based on charger deployment.

It is also likely that EV deployment will be disproportionate throughout the state. As a result, vehicle-grid integration investments may only be beneficial for ratepayers to the extent that they align geographic EV deployment and drivers’ charging patterns. Existing law requires the CEC to assess the amount of vehicle charging infrastructure needed to support EV deployment goals and evaluate the extent to which charging infrastructure is proportionately deployed. Information from the CEC indicates that if EV adoption follows trends in new vehicle purchase rates, approximately 90 percent of plug-in EVs will be deployed in counties identified within the four largest metropolitan planning regions of California (Southern California, San Francisco Bay Area, San Diego County, and the greater Sacramento area) by 2025.

This bill requires the CPUC to establish vehicle-grid integration targets for IOUs and CCAs with at least 200,000 customers and requires the CEC to establish similar targets for POUs with at least 200,000 customers. The following is an estimate of the IOUs, CCAs, and POUs that would be required to comply with this target setting:

Under this bill, any CCAs that does not have at least 200,000 customers would not be required to participate in target setting, regardless of the rate of EV deployment within the CCA’s jurisdiction. For example, Clean Power SF in San Francisco would not have a sub-target for vehicle-grid integration, despite the potential for significant EV deployment in San Francisco and the surrounding Bay Area by 2025.

Need for amendments. As currently drafted, this bill establishes a statutory definition of vehicle-grid integration that focuses on technology and hardware without including rate design. However, a number of utilities are not investing in chargers, and are using rate design to support vehicle-grid integration. Rate design can be a cost-effective mechanism for incentivizing grid-responsive charging behavior and can facilitate more responsive uses of vehicle-grid integration hardware. This bill also requires the CPUC and CEC to establish vehicle-grid integration targets for certain LSEs; however, those LSEs may not cover areas with significant EV deployment, they may not file applications for investments at the CPUC, and targets may be challenging to apply to non-hardware vehicle-grid integration efforts like rate design. To ensure that vehicle-grid integration efforts continue to include rate design efforts, the author and committee may wish to amend this bill to modify the definition of vehicle-grid integration to include rate design programs. The author and committee may also wish to modify the target setting provisions to do the following:

• Require the CPUC and CEC to adopt specific strategies for mitigating the impact of increased EV load in a manner that ensures benefits to ratepayers.
• Require applications for transportation electrification investments at the CPUC to quantify how the proposed investments will further those strategies.
• Require IOUs to include in the Annual Load Research report information about progress towards furthering the vehicle-grid integration strategies.
• Require POUs and CCAs to identify their transportation electrification and vehicle-grid integration investments in their IRPs and quantify how those investments will further the strategies outlined by the CEC and CPUC respectively.

Prior/Related Legislation

AB 2127 (Ting, Chapter 365, Statutes of 2018) required the CEC to conduct a statewide assessment of vehicle charging infrastructure needed to support the goal of putting five million EVs on the road in California by 2030.

SB 1000 (Lara, Chapter 368, Statutes of 2018) required the CEC to evaluate the extent to which charging infrastructure is proportionately deployed and use funds to more proportionately deploy chargers as needed. The bill also required the CPUC to explore facilitating the development of technologies that promote grid integration and adopting a tariff for heavy-duty EVs that encourages charging during periods of excess grid capacity.

SB 350 (De León, Chapter 547, Statutes of 2015) the Clean Energy and Pollution

Reduction Act of 2015, established new clean energy, clean air and GHG reduction

goals and established the IRP process through which electrical corporations file procurements, including transportation electrification investments.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No

SUPPORT:

American Honda Motor Co., Inc.

California League of Conservation Voter

Electric Vehicle Charging Association

eMotorWerks

Enel X

Environmental Defense Fund

EVBox

Natural Resources Defense Council

OPPOSITION:

None received

ARGUMENTS IN SUPPORT: According to the author:

“California has set ambitious goals to electrify its transportation sector, which will dramatically increase the electrical load from our vehicles. But the State’s electrical grid already faces many challenges, in part due to our increased use of intermittent renewable energy. If EV charging is grid integrated, it can mitigate this problem and provide a variety of benefits, including but not limited to, shifting load out of peak demand periods, absorbing excess solar generation during midday, and shedding load as demand rapidly ramps. SB 676 ensures that vehicle-grid integration is a part of the conversation as the State continue to invest billions of dollars in transportation electrification, with significant investments from ratepayers.”

-- END --