Energy revolution: California approves $768 million for electric vehicles

Stock SectorMay 31, 201816min10
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California’s electric utility companies will spend nearly $768 million on charging infrastructure for electric cars, trucks and buses, under a series of proposals approved Thursday by state regulators.

The programs, viewed together, are believed to be the largest state-level effort yet by the utility industry to encourage the adoption of electric vehicles. Gov. Jerry Brown has set a goal of having 5 million zero-emission vehicles on California roads by 2030, a steep jump from the 369,300 pure electrics and plug-in hybrids now registered in the state.


The programs unanimously approved Thursday by the California Public Utilities Commission focus on creating the infrastructure to support charging stations particularly for electric trucks and buses, in contrast to previous expenditures, which have focused more on cars.

Transportation accounts for about 40 percent of California’s greenhouse gas emissions, and state officials see electrifying heavy-duty vehicles as way to fight both global warming and air pollution in one step, since regulators also expect much of the electricity to be generated by clean sources like solar power. The programs approved Thursday, funded by the utilities’ customers, place an emphasis on installing charging stations in disadvantaged communities or in facilities — such as ports — that tend to be located near low-income neighborhoods.

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Electrifying California

California regulators have approved multiple programs by utility companies to encourage electric vehicles and charging stations:

$768 million Thursday on charging infrastructure for electric trucks and buses and cars.

$200 million in 2016 for chargers at workplaces and larger, multifamily dwellings.

$43 million in January for 15 short-term pilot projects to fund electric school buses, install direct current fast chargers and electrify baggage vehicles at San Diego International Airport, among other things.

$423 million in May from the Volkswagen diesel settlement for electric trucks, buses and port equipment. VW is committed to spending a total of $1.2 billion on clean transportation in California.

Sources: Natural Resources Defense Council, Chronicle research

“Other states are watching, other utilities are watching, and I think this proposed decision moves us in the right direction,” said Commissioner Carla Peterman.

For the utilities, the programs also represent an investment in the future.

California’s utility companies have seen a growing number of customers install home solar arrays to generate their own electricity or join community choice programs, such as CleanPowerSF in San Francisco, to supply their power. The infrastructure needed to keep electric cars charged, in contrast, represents a rare growth opportunity.

“It’s potentially huge,” said Max Baumhefner, a senior attorney with the Natural Resources Defense Council’s clean vehicles project. “Electrifying the transportation sector could blow the ‘utility death spiral’ out of the water.”

Pacific Gas and Electric Co. will spend up to $22.4 million installing the infrastructure for more than 230 direct current fast-charging stations, which can add 50 to 70 miles of range to a car’s battery in 20 minutes.

The utility will also spend $236.3 million on infrastructure and rebates to support electric trucks, buses and other medium or heavy-duty vehicles. Southern California Edison will spend up to $342.6 million on similar efforts. Together, the two utilities are expected to help install chargers at more than 1,570 sites, supporting 15,000 medium- or heavy-duty vehicles such as municipal and school buses.

San Diego Gas & Electric Co. will provide rebates for as many as 60,000 customers to install home charging stations and offer installation services, for a total of $136.9 million.

Together, the three utilities also will spend $29.5 million evaluating the effectiveness of all the programs.

California accounts for roughly half of all sales nationwide of electric or plug-in hybrid vehicles.

PG&E on Thursday did not have an estimate for how much the commission’s decision would increase monthly bills for its customers. However, when the company first proposed the programs approved Thursday — together with other electric vehicle initiatives that the commission already approved in a separate proceeding — PG&E’s estimated bill impact was 28 cents per month for a typical residential customer.

California’s investor-owned utility companies make their profits largely off the value of the infrastructure — the poles, wires, transformers and substations — that they install and maintain, not the amount of electricity their customers use. In most of the programs approved Thursday, the utilities will install and own the wires leading up to electric vehicle charging stations, rather than owning the stations themselves.

“This is a huge area that really needs to be tackled, and we think because the utilities have a strong history in infrastructure projects, we fit in really well into this space,” said PG&E spokeswoman Ari Vanrenen.

The programs come in response to a 2016 California law — SB 350 — that directed the commission and the utilities to develop ways to electrify transportation across all sectors of the economy.

The commission’s vote comes less than a week after the California Air Resources Board voted to spend up to $423 million from the Volkswagen emissions-cheating settlement on incentives for electric school and municipal buses, zero emission freight trucks and replacements for polluting port equipment. As part of the settlement, Volkswagen has agreed to spend $1.2 billion on clean transportation in California over the next decade.

Baumhefner of the NRDC said the efforts of the air board and the commission will work together.

“There’s a complementary relationship here, with VW diesel money for zero-emission trucks and buses, and utility investments providing the plugs for those zero-emission trucks and buses,” Baumhefner said. “It stretches the state’s VW money twice as far.”

Although Thursday’s vote was unanimous, commission President Michael Picker expressed a note of hesitation about San Diego Gas & Electric Co.’s incentive program from at-home charging stations. Self-driving cars, he said, could lead to fewer people owning vehicles. The need for home charging systems would drop as a result.

“As we start to see more and more autonomous vehicles, I’m uncertain how much we want to invest in residential charging,” Picker said. “I think it’s an experiment, an expensive experiment.”

David R. Baker is a San Francisco Chronicle staff writer. Email: dbaker@sfchronicle.com Twitter: @DavidBakerSF

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