On August 29, 2014, a number of electric vehicle charging networks, utilities, and interested parties provided comments on new rules needed to accelerate the adoption of electric vehicles in California. Here are the highlights:

California needs a “nearly complete transformation” of its automotive market to meet statewide goals.

Southern California Edison (Edison) noted that the state is behind schedule in developing electric vehicle (EV) charging infrastructure to meet statewide goals, including the Governor’s Zero Emission Vehicle Action Plan, national standards on reduction of nitrogen oxide (the harmful chemical flowing out of tailpipes today), and other targets.

According to the agency responsible for implementing California’s climate change cap-and-trade program, reaching long-term pollution goals will require a “transformation of the market,” including a “nearly complete transformation of passenger vehicles to zero-emission technologies, [and] approximately 80 percent of the truck fleet would need to be zero- or near-zero-emission technology,” among other changes.

Residential charging is the largest segment of the EV market today, but California needs 260,000 to 650,000 charging ports outside of homes by 2020 to meet statewide EV targets — “nothing short of transformational” according to Edison. EV equipment developer ChargePoint notes that a good goal for charging station deployment is ensuring that 1 charging station exists for every 4 EVs in the market.

The utilities want to own EV charging infrastructure.

Edison and San Diego Gas & Electric (SDG&E) both call for utility ownership of all aspects of EV charging infrastructure, including the hardware and software needed to enable charging. The justification is an asserted “market failure.” Edison notes that charging network business models face numerous challenges, including high costs of development (minimum of $10,000 for Level 2 charger) coupled with low prices for the delivery of electricity. These combine to “make a sustainable business model challenging.”

Developers want open competition and customer choice.

NRG, which operates the eVgo network of charging stations, disputes the need for utility ownership of charging stations. It claims that “charging infrastructure has not been a barrier to adoption,” and the market for EV charging is “alive and well” with numerous companies involved, significant third party investment, and other positive signs. NRG sees the role of utilities as providing expedited permitting and installation procedures and offering preferential rates for EV charging.

Similarly, ChargePoint, another EV charging station operator, disputes the notion that the charging business model is uneconomical or that a “market failure” exists. ChargePoint believes that the role of utilities should be limited to “make ready” infrastructure development (installing wiring, meters, etc.), which accounts for about 50% of total cost. ChargePoint argues that utilities should not own the charging equipment or provide the charging service. These are best left to private companies with substantial networking and software expertise.

Next steps

The California Public Utilities Commission anticipates issuing a draft proposed decision on the issues mentioned above in November 2014. It will allow comments on additional issues relating to vehicle to grid integration, programs for intelligent charging, and others in October 2014. A draft proposed decision on these additional issues is expected in April 2015. A final decision on all issues in this proceeding is planned for late 2015 or early 2016.

Do we need utilities to support wholesale market transformation in the EV space? Will utility ownership of EV stations stifle competition and customer choice? Drop a comment below. And let us know if you’d like to submit comments in these proceedings!

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