California CCAs Achieve 2,000-Megawatt Milestone for New Renewables

Concord, Calif. – The California Community Choice Association (CalCCA) is pleased to announce that community choice aggregators (CCAs) in the state have signed long-term contracts with new renewable energy facilities totaling more than 2,000 megawatts (MW), reflecting a strong commitment by CCAs to drive clean energy and economic development in California and help the state achieve ambitious decarbonization and climate change goals.

CCAs achieved the 2,000 MW milestone in October when Monterey Bay Community Power (MBCP) and Silicon Valley Clean Energy (SVCE) approved power purchase agreements (PPAs) totaling 278 MW of solar coupled with 340 megawatt hours (MWh) of battery storage for two separate projects, to be built in Kern and Kings Counties. In 2017, CCAs in California had secured approximately 1,000 MW of new renewables under long-term contracts, so the figure has doubled in one year.

“This is a significant achievement for the CCA movement in California. It shows CCAs are ready, willing and able to sign long-term contracts with new renewable energy projects, fueling new sources of clean energy, job creation and revenues for host communities,” said Beth Vaughan, executive director of CalCCA.

California’s aggregators have signed a total of 59 PPAs with new solar, wind, biogas, and energy storage facilities, supporting billions of dollars in construction and thousands of jobs. All but three of the contracts are for terms of ten years or longer.

The renewable energy projects are located in 16 California counties – from Mendocino County in the north to Riverside County in the south, with one located in New Mexico. Several projects are already operating, while others will become operational between 2019 and 2021. A map of project locations and a list of contracts can be found here: https://cal-cca.org/calcca-renewable-energy-map-11-15-18-final/. The table below includes a sampling of projects:

Marin Clean Energy (MCE) initiated service in 2010 becoming the first operational CCA in California. There are now 19 CCAs serving approximately 8 million customers in the state and momentum is building. Ten CCAs launched in 2018 alone and many more are under development.

Despite their newness, CCAs are viewed as reliable and stable counterparties and are proving adept at securing cost-effective, long-term power resources. As a result, CCAs are able to serve their customers with electricity that is cost-competitive, and in many cases greener, with the supplies of investor-owned utilities.

“A key aspect of the value proposition offered by MCE and other California CCAs is the requirement that renewable and clean energy be a major component of the customers’ power supply mix,” Moody’s Investor Services said upon assigning MCE an investment grade credit rating in May. “This value is one of the most significant factors that provides strength to the long-term business model.”

As more CCAs begin procuring long-term resources, investments in new clean energy facilities will intensify. Clean Power Alliance and East Bay Community Energy, launched in 2018, are among the CCAs that are currently evaluating developers’ offers for new renewables projects in California. This fact sheet provides additional information on CCA power purchasing.

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About CalCCA: The California Community Choice Association supports the development and long-term sustainability of locally-run Community Choice Aggregation (CCA) electricity providers in California. CalCCA is the authoritative,

unified voice of local CCAs, offering expertise on local energy issues while promoting fair competition, consumer choice, and cost allocation and recognizing the social and economic benefits of localized energy authorities

For more information visit www.cal-cca.org.

ForeFront Power developing 2-MW solar+storage car canopy for University of California

The University of California, Santa Cruz (UCSC) has partnered with ForeFront Power to develop a 2-MW solar+storage parking canopy structure that will provide clean, reliable electricity to the campus over a 20-year term. UCSC procured renewable energy with ForeFront Power through a streamlined procurement process via School Project for Utility Rate Reduction (SPURR).

The 2-MW solar parking canopy project will contribute to the University’s Campus sustainability plan, which includes the goal of installing 4 MW of solar PV technology on the main campus. The project will also include 1.2 MW of energy storage to reduce peak demand and shift load to times of day when electricity is cheaper.

By utilizing a Power Purchase Agreement (PPA) framework with no upfront cost through ForeFront Power and SPURR, the university will benefit from $6 million in electricity savings during the project term.

“We considered a number of options and the partnership for this project was determined to be the most expedient and the best and the cleanest solution,” said Traci Ferdolage, associate vice chancellor of UCSC. “ForeFront Power and SPURR have been very responsive and supportive of the University’s renewable goals.”

Moreover, this project is part of the campus’ strategy to meet the UCSC’s Carbon Neutrality Initiative, and partnerships like this project, will be a key component to meet this 2025 goal.

Over 3 million kWh of electricity from the project will reduce than 2,500 tons of carbon dioxide from the grid.

In addition to the benefits of on-site solar energy, the project will include 1.2 MW of energy storage to reduce peak demand and shift load to times of day when electricity is cheaper. The use of energy from the storage units combined with on-site solar energy generation helps maximize clean energy generation and enhance on-site sustainability.

“The inclusion of energy storage increases the value of the on-site solar project to the University,” said Go Mizoguchi, co-CEO of ForeFront Power. “The University is able to save even more money while incurring no upfront cost.”

Since 2015, the SPURR Renewable Energy Aggregated Procurement (REAP) program and the ForeFront Power team have helped over 20 school districts, colleges, and municipalities procure more than 50 MW of clean solar power across more than 100 sites.

“It is exciting to see our program extended to the UC System at Santa Cruz so that more public organizations can benefit from the saved time, effort, and money by using our procurement process,” said Michael Rochman, managing director of SPURR. “SPURR strives to offer clear, fair, and competitively-sourced terms and conditions that allow for easy sourcing.”

ForeFront Power will be working with local Santa Cruz based companies to complete the installation. Together, ForeFront Power and UC Santa Cruz will engage in a phased construction approach to minimize impact on students and faculty. Engineers have already begun working closely with UCSC staff to ensure a safe connection to a complex campus grid that includes a natural gas-fueled cogeneration plant.

The schools will also receive free post-secondary level lesson plans from Schools Power, a leading national education organization that provides schools and colleges with standards-based renewable energy curriculum packages. ForeFront Power and Schools Power announced their partnership in July 2017.

News item from ForeFront Power

 

ForeFront Power developing 2-MW solar+storage car canopy for University of California, by Billy Ludt, Solar Power World, November 13, 2018.

CPUC: California Utilities Topping Renewable Targets, Driving Down Contract Prices

A new report from the California Public Utilities Commission (CPUC) finds that the state’s utilities are continuing to be ahead of their renewable energy goals.

The CPUC says its renewable portfolio standard (RPS) program – one of the most ambitious in the country – not only remains ahead of target, but it is helping to drive down renewable contract prices.

The state’s RPS requires investor-owned utilities, electric service providers and community choice aggregators to procure 33% of retail sales per year from eligible renewable sources by 2020 and 60% by 2030. In addition, on Sept. 10, S.B.100 was signed by Gov. Jerry Brown, setting a target goal of a 100% carbon-free electric grid by 2045.

As of 2018, according to the CPUC’s report, the large investor-owned utilities have executed renewable electricity contracts necessary to meet the 33% RPS requirement by 2020 and, in addition, forecast reaching 50% by 2020. The small and multi-jurisdictional utilities, community choice aggregators, and electric service providers report compliance with current RPS targets and forecast that they will meet the future RPS requirement in 2020 with additional procurement.

The average forecasted RPS percentages for the retail sellers are as follows:

california
Source: CPUC

Further, the regulator explains, the RPS program has helped achieve large reductions in costs for renewable electricity. Contract prices for RPS-eligible energy dropped an average of 9.5% per year between 2007 and 2015. In 2017, the trend of falling contract costs continued and reached a historic low average price of $47/MWh, the report says.

As for the mix of renewable energy, the CPUC says the large investor-owned utilities have procured diverse renewable energy sources, including solar PV and thermal, wind, geothermal, biopower, and small hydro:

cpuc

On the other hand, apart from PacifiCorp, the mix of renewable energy sources for the small and multi-jurisdictional utilities are not as diverse, according to the report:

cpuc

In addition, the CPUC offers the following statistics for the community choice aggregators:

cpuc

“California continues on its path to a 100 percent clean energy future,” says Martha Guzman Aceves, CPUC commissioner. “The RPS program has exceeded this year’s energy targets, proving that this transition can be accelerated in an achievable and cost-effective manner.”

Commissioner Clifford Rechtschaffen adds, “The RPS program is a success across the board: improved air quality, major carbon reductions, declining costs, improved system reliability, and significant economic development and job growth.”

The full CPUC report can be found here.

 

CPUC: California Utilities Topping Renewable Targets, Driving Down Contract Prices, by Betsy Lillian, North American Wind Power, November 13, 2018.

Time to Stop the CPUC’s Antagonism Toward Community Choice

October 11 decision on exit fees is the last straw

The California Public Utilities Commission on October 11 voted to change the methodology for calculating the exit fee charged to Community Choice Energy customers. Because of this change, Community Choice agencies (CCAs) will be weakened relative to investor-owned utilities such as PG&E. For me, this is the last straw. It’s time for a change.

The vote didn’t have to go this way. The Commission had another option for the exit fee (aka Power Charge Indifference Adjustment or PCIA).  An Administrative Law Judge had proposed a more balanced approach based on two years of evidentiary hearings on the matter. The California Public Utilities Commission (CPUC) chose to set aside the judge’s proposal in voting as they did on the PCIA.

This vote continues the CPUC’s history of antagonism toward Community Choice.

  • In a  2016 interview, President Picker said that CCAs impose “forced collectivization” on customers, an inaccurate and inappropriate statement.
  • In early 2017 the CPUC initiated the “Green Book” Customer Choice project which implies that CCAs are somehow leading toward a new energy crisis (they are not).
  • In late 2017 the CPUC unexpectedly issued Resolution E-4907 that would have imposed a de facto freeze on all new CCA service launches. Following the uproar that ensued, the CPUC amended the resolution significantly.
  • The CPUC allows investor-owned utilities to lobby against CCAs in violation of the code of conduct established by SB 790.

This antagonism matters because when the CPUC weakens CCAs, they weaken California’s strongest leader and champion for achieving its 100 percent clean energy goal, for creating the twenty-first-century energy system, and for climate protection. Rather than compete in the market that the CPUC and investor-owned utilities (IOUs) have defined, CCAs are redefining the market, accelerating distributed energy resources, democratization, and decarbonization.

California’s new CCA players are not only providing greener power at lower rates, they are innovating. Among their new offerings are dynamic and customized retail rates for key accounts, targeting for distribution grid services, planning based on advanced metering infrastructure and smart meter data, collaborations with the distribution utilities to build microgrids, and distributed energy resources (DERs) to reduce the need for peaker plants. 

More broadly, the CCAs are becoming transformative DER market makers. They are deploying open access technology platforms and a set of business processes that 1) engage the vast ecosystem of local DER developers, financiers and contractors, 2) facilitate customer targeting, acquisition, project development and 3) systematically integrate and monetize DER into distribution grid planning and services, energy portfolio risk optimization, California Independent System Operator (CAISO) markets, long-term planning, and capacity procurement.

Given the clear benefits of CCA, why would the CPUC want to hinder it? The CPUC is encircled by armies of attorneys protecting the interests of their IOU clients. Rather than accelerating the energy system of the future, these attorneys fight to maintain the status quo and preserve profits for their clients.

Not only is the CPUC hindering CCAs, it is allowing IOUs to slow or block distribution resource planning and integrated distributed energy resource proceedings. IOU business models still directly conflict with DER, and their processes are often byzantine, non-functional, and varied from one IOU territory to the next. They restrict CCAs and DER developers from accessing the data they need.

The CPUC’s integrated resources planning process is fundamentally flawed owing to over-simplified, top-down models that don’t integrate DER or account for geographic differentiation. It has overseen a decade in which large amounts of DER has been built without systematic tracking much less integration into planning or operations.

Time to Unite for Community Choice Energy

I call on proponents of Community Choice:

Grow the list of elected officials willing to advocate for CCA. Already, more than 120 mayors, city council members, and county supervisors went on record in opposition to the CPUC’s October 11 decision on the PCIA, including mayors of Northern California’s three largest cities, and many state lawmakers. These elected leaders represent a powerful, growing force. As many as half of all California counties will soon be served by CCA.

Ask the new governor and his team to 1) replace CPUC President Michael Picker, and 2) appoint unbiased commissioners on the CPUC as vacancies arise.

Advocate for new legislation that limits CCA exposure to utility procurement, reduces the CPUC’s PCIA charge, limits CPUC approval of utility procurement/retained generation and/or reestablish real regulation of the utilities from the current system in which CPUC commissioners do not actually review utility procurement contracts.

Consider going even further with legislation that overhauls California’s obsolete 20th century regulated monopoly system and replaces it with a clean, decentralized, 21st-century structure:

  1. Recognize the superior oversight and legitimacy of CCAs
  2. Dispose of IOU generation portfolios and remove IOUs from the generation and capacity planning business (finish restructuring)
  3. Implement an “open architecture” participation platform that operationally integrates DER into network, wholesale and retail, standardized statewide 
  4. Sensibly define the role of IOUs as transmission, distribution, and grid services companies
  5. Define the roles of CCAs, energy service providers, retailers and DER companies in the new market construct.

Spread the positive narrative about CCAs. They benefit their local communities and all Californians by ushering in a clean, smart, distributed, open choice future. CCAs are get-it-done start-ups with their growing, experienced teams running competitive, innovative power agencies. CCAs understand both the energy business and local government’s role and accountability. CCAs are a new, unique, and powerful institution in California. This story needs to be told repeatedly. 

Address as soon as possible any CCA that continues to build stranded cost assets, creates cybersecurity and network stability concerns, or fails to use DER adequately. CCAs are uniquely positioned to monitor and address such problems.

The CPUC’s antagonism is hurting Community Choice customers by undercutting the most powerful tool cities and counties have to reduce their greenhouse gas emissions, scale up clean renewable power, and ensure that energy decisions rest primarily and democratically in the hands of local communities and their elected representatives. It is time to rise up and put a stop to this antagonism.

 

Edward Mainland served ten years as Co-Chair, Energy-Climate Committee, Sierra Club California. He is a Sierra Club Senior Conservation Fellow, co-founder of Sustainable Novato, director of Sustainable Marin, and a public advocate for Community Choice in Marin and throughout California

Community Choice Energy on the Agenda in Stockton

City Council Legislative Committee Receives Presentation

On November 5th staff from the Center for Climate Protection delivered the first formally agendized presentation to the Legislative Committee of the Stockton City Council. The committee asked questions for more than a half-hour after the 25-minute presentation.

The matter is now expected to be heard in the full city council on December 4th where the Legislative Committee will report to the council on Community Choice Energy. Following the hearing in the City Council, an informational study session may be scheduled for some time in early January.

Barry Vesser addresses Stockton City Council Legislative Committee members (L-to-R) Jesus Andrade, Dan Wright, Elbert Holman.

Also coming up in Stockton, the California Partnership for the San Joaquin Valley will be holding its quarterly Governing Board meeting in Stockton on Friday, December 7. The Center will be on that agenda for a full presentation on Community Choice Energy.

Stay tuned to CPX for more information on both of these dates as they approach.

10% Of New Vehicles Purchased in California Are EVs

Trends in the US often start in California, expand to other Western states and/or Northeastern states, and then fill in eventually in the Midwest and South. This same pattern is also occurring with sales of EVs in the US and is creating in essence green versus brown states, similar to our political division of blue versus red states.

In August, 1 out of 10 (9.90%) new vehicles purchased in the state of California were EVs (PHEVs + BEVs), according to the latest numbers from the Alliance of Automobile Manufacturers Advanced Technology Vehicle Sales Dashboard (information provided by IHS Market)West Virginia came in last at 0.17%, meaning Californians purchased EVs in August at a rate 58.2 times greater than the state that has become heavily associated with the coal industry in recent years.

Jan-Aug EV Sales Market Share - California

While the 9.90% for August* is the highest market share for sales of new EVs ever in California, the month of September should be even higher due to a significant number of deliveries of the Tesla Model 3 that month. Doing some estimating using September EV sales numbers (which were estimated to be significantly higher than in October), the September market share could come in around 12% for California. (*Note: The Advanced Technology Vehicle Sales Dashboard data is updated about every 2 months, hence August is the most current data available.)

Year-to-date (January through August), California’s EV sales market share stood at 7.07%, nearly double that of the state of Washington at 3.65% and 4.3 times the US total of 1.66%. If you exclude total vehicle and EV sales from California, then the EV market share YTD for the rest of the US would be under 1% at 0.93%.

Top 12 States Jan-Aug 2018 EV Sales Market Share

For the month of August, after California other top states (and DC) for EV sales market share include Oregon (4.12%), Washington (3.54%), District of Columbia (3.40%), Hawaii (2.69%), and Colorado and Arizona (2.46%). The total US market share stood at 2.24% for the month. (If you’d like to play with the data, I’ve created a sortable table here with EV sales numbers by state for 2016 and 2017 and within state sales market share for 2017 and the month of August 2018.)

EV Marketshare August 2018 Top 10 Bottom 5 States

The bottom 5 states were West Virginia (0.17%), Oklahoma (0.20%), Mississippi (0.28%), North Dakota (0.29%), and Louisiana (0.33%).

For the entire year of 2018, the US EV sales market share will likely come close to 2.00% and California should end up between 8.5% to 9%. However, the last 3 months of 2018 for California should average well above 10%. At this rate, California could “cross the EV chasm” (16% of new vehicle sales) at some point during 2020.

California EV Sales as a % of Total New Vehicle Sales-EVAdoption

As I shared in my analysis and article New Models Drive Majority Of US Plug-In Vehicle Sales Growth, Analysis Shows, over the years the vast majority of sales growth comes from the introduction of new EV models into the market. In fact, without sales of the Tesla Model 3, US EV sales year-to-date would be up only about 16,000 units or an increase of approximately 10% versus nearly 74% with the Model 3. And if you factor in nearly 14,000 in sales of the Honda Clarity PHEV YTD, US EV sales YOY would be nearly flat.

With the new EV model impact in mind, the following are factors that will likely help or hinder continued strong growth in EV sales in California over the next few years:

Gas prices: If the price of gas rises above $4 a gallon in California for an extended period, you could see a lot consumers make the switch to a PHEV or BEV, especially by those with long daily commutes to and from work.

Phaseout of the Federal EV tax credit for Tesla and GM: I don’t expect the phaseout of the tax credit to impact sales of Tesla models much. However, GM’s Bolt and Volt could be hurt fairly significantly, with many consumers opting for the Honda Clarity PHEV and Toyota Prius Prime over the Volt, and Hyundai Kona and Kia Niro BEVs over the Bolt.

California Assembly Bill AB1184: If state bill AB1184 passes in 2019, it could establish a $3 billion fund to support the adoption of EVs with larger and instant rebates, more programs for low-income buyers, and the deployment of more charging stations. This program could especially give a boost to sales of EVs priced under $40,000.

Stock Market/Housing Market: California’s economy continues to be strong, ranking as the 5th largest in the world if the state were a country, but a significant downturn in the stock market or housing prices could dissuade many consumers from opting for a more expensive EV for their next auto purchase.

Tesla Model Y: The upcoming crossover version based on the Model 3 is ideal for the California market. It will be perfect for the active outdoor lifestyle of many Californians, and it will replace the now passé Toyota Prius and then the Model 3, as the ultimate way to signal to your neighbors that you are indeed green. Once the Model Y is widely available it could easily become the top selling vehicle overall in California.

Other New EV Models: I expect the upcoming Hyundai Kona and Kia Niro BEVs to sell well in California, but I don’t expect them to be huge sellers. Many Californians (of which I have been one my entire life) can be brand snobs, and at least in recent years have tended to prefer Japanese brands, US-made trucks and SUVs and European luxury cars.

I actually expect the rumored Ford Escape Energi PHEV to be a huge hit in California, assuming it is priced right and has a decent electric range of at least 25-30 miles (or more). Finally, the upcoming luxury SUVs/CUVs from Jaguar, Audi, Mercedes-Benz, and BMW should do well in the Golden State, adding perhaps a combined 50,000 units sold per year.

Top 5 States - Total % of EV Sales - August 2018

Accounting for more than 53% of all EVs sold in the US in August (50.4% YTD), California is clearly driving the country toward mass adoption of electric vehicles. The only question is: How long it will take for most of the rest of the country to catch up?

 

10% Of New Vehicles Purchased in California Are EVs, by Loren McDonald, Clean Technica, November 12, 2018.

EDF Renewables signs PPAs with Silicon Valley Clean Energy and Monterey Bay Community Power

EDF Renewables North America announced the signing of two 20-year PPAs for the 128 MWac with 40 MW/160 MWh battery storage Big Beau Solar+Storage Project in Kern County, California. Silicon Valley Clean Energy (SVCE) will purchase 55% of the output, and Monterey Bay Community Power (MBCP) will purchase 45%. The Project is slated to achieve commercial operation by the end of 2021.

SVCE and MBCP jointly launched a competitive procurement process in September 2017 to take advantage of economies of scale for the combined four county service territory. This unique collaboration between these two Community Choice Aggregators (CCAs) allowed for more purchasing power to better-source cost-effective, clean electricity for their communities.

“We are excited to bring online a new California solar+storage project with SVCE and EDF Renewables,” said Tom Habashi, CEO of Monterey Bay Community Power. “Solar development has been a hallmark of California’s renewable energy boom and with the storage component, we can realize the full potential of solar generation.”

“We are delivering on our commitment to our customers to provide reliable, renewable energy that will help us reach our decarbonization goals,” said Girish Balachandran, CEO of Silicon Valley Clean Energy. “This long-term agreement with EDF Renewables for solar-plus-storage shows that as a CCA we have the financial stability to make investments in these kinds of innovative renewable projects.”

“EDF Renewables is pleased to be selected by SVCE and MBCP—two forward-thinking CCAs to supply affordable, in-state green energy to their customers. The inclusion of storage provides the agencies with a 100% clean and partially dispatchable product, allowing them to mitigate the ‘duck curve’ risk and monetize price spikes,” said Valerie Barros, director of renewables and storage product development at EDF Renewables.

The electricity generated at full capacity is enough to meet the consumption of up to 64,000 average California homes. This is equivalent to avoiding more than 315,000 metric tons of CO emissions annually [1] which represents the greenhouse gas emissions from 67,000 passenger vehicles driven over the course of one year.

[1] According to US EPA Greenhouse Gas Equivalencies calculations.

News item from EDF Renewables

 

EDF Renewables signs PPAs with Silicon Valley Clean Energy and Monterey Bay Community Power, by Kelsey Misbrener, Solar Power World, November 8, 2018.

 

California regulators approve the world’s biggest battery projects

Batteries are getting big in California. And by big, I am talking about Dynegy’s plan to build a 300 MW battery project to replace a gas-fired power plant in Moss Landing, California.

Today the California Public Utilities Commission (CPUC) approved four contracts for battery storage contracts that utility Pacific Gas & Electric Company signed with developers, including the 300 MW lithium-ion battery from Dynegy, a 182.5 MW Tesla battery and two other li-ion battery projects totaling 85 MW, for a total of 567 MW.

Image from PV Magazine

The 300 MW battery is easily the largest lithium-ion battery project known to pv magazine. All have four-hour ratings, giving these batteries a total energy rating of 2.27 gigawatt-hours. All of these batteries will be located on or near the site of the Moss Landing Power Plant, a looming gas-fired power plant on Monterey Bay in California, 15 miles north of Monterey.

These batteries will not only connect to the substation and transmission infrastructure built for the Moss Landing Power Plant, but will replace the services provided by the plant itself. Plant owner Dynegy announced last February that it may close the plant, and according to CPUC another cogeneration plant in Gilroy has has signaled that it may go offline.

The potential closure of these plants and their replacement with batteries is part of a trend in California where conventional generation is increasingly being replaced with clean energy options including different combinations of transmission upgrades, renewables and batteries.

And it appears to be benefitting ratepayers. In CPUC’s order the organization found that the evaluation methodology which finds greater benefits than costs for the four projects is both reasonable and consistent with other energy storage solicitations, and that these plants offer greater value to ratepayers than other procurement options.

 

California regulators approve the world’s biggest battery projects, by Christian Roselund, PV Magazine, November 8, 2018.

PG&E Proposes Ditching Demand Charges for Commercial EV Charging

Businesses generally need to see cost savings in order to justify switching to an electric vehicle fleet.

“They need the rates to be better than gas or diesel if they’re going to give up their diesel bus or truck,” said Cal Silcox, clean transportation strategy manager at California utility Pacific Gas & Electric.

Right now, there’s no guarantee that commercial and industrial customers in PG&E territory will see any fuel savings, he said. That’s largely because of the demand charges C&I customers are required to pay when their electricity use spikes — such as during a high-powered EV charging event.

That’s why PG&E is hoping to replace demand charges with a new subscription rate plan for customers that are using commercial EV (CEV) charging. The proposal, submitted to the California Public Utilities Commission Monday, allows customers to choose the amount of power they need for their charging stations and pay for it with a flat monthly fee — similar to picking a cellphone data plan.

The proposal would create a new rate class for CEV charging and would offer two types of rates within that: one for customers with charging up to 100 kilowatts and one for customers with charging over 100 kilowatts.

“As EV charging stations become more common in places such as multi-family residences, businesses, transit stations and other commercial spaces, PG&E has recognized that the existing rate structure does not best meet the needs of commercial EV charging,” according to a company press release. “Currently, public or fleet EV chargers on PG&E’s commercial electric rates can see higher costs than the typical business customer, on average. These costs pose challenges to the expansion of EVs and needed charging stations.”

CEV customers currently pay 30-40 cents per kilowatt-hour in PG&E territory, while commercial buildings pay 18-25 cents per kilowatt-hour, Silcox explained. The new plan brings customer costs in line with their cost of service. PG&E’s modeling shows that it could save a transit agency, for instance, 20-34 percent on what it is paying today.

“We think it should get the price down to equal or less than the cost of diesel so it’s competitive and…makes the business case for going electric positive for them,” he said.

While the subscription fee is lower than the demand charges PG&E’s commercial customers currently pay, the plan is not unlimited. So if a customer’s electricity usage exceeds its rate program, it will have to pay for overages. But because the plan is monthly (rather than yearly, as some commercial rates are), customers have more insight into their usage and can adjust quickly to avoid additional payments in the future.

Also, any CEV customer that buys a plan covering their maximum charging capacity installed on site should never go over that limit, unless they add more chargers. Some customers may intentionally pick a subscription plan that covers less load than their charging stations require, running the risk of overages. But they would only elect to do so if they thought they could save more money through managed charging.

In that scenario, imagine a transit agency has a fleet of five electric buses and five 50-kilowatt chargers to fuel them up, said Silcox. The agency could either buy a 250-kilowatt subscription plan and cover all of its needs for the five buses, or purchase a 200-kilowatt plan and cover the remaining 50 kilowatts of charging load with energy storage or load management and potentially pay less overall.

The new proposed rate also includes a basic time-of-use structure that remains the same every day of the week and throughout the year. The time-of-use rate is specifically designed to encourage CEV charging during the middle of the day (with super off-peak rates offered between 9 a.m. and 2 p.m.) so that customers are taking advantage of California’s surplus solar power.

Peak hours would start at 4 p.m. under the subscription plan, which aligns with new time periods approved by the California Public Utilities Commission earlier this year. The peak period for CEV customers would end at 10 p.m. (an hour later than other customers), when prices start to decline again.

A new approach to ratemaking

PG&E has been working with California’s other investor-owned utilities to develop a new framework for designing rates, which is focused less on conventional rate classes and more on meeting a customer’s specific needs, for, say, EV charging. The utilities recently outlined this “modern rate architecture” concept in a white paper.

Margot Everett, senior director of rates and regulatory analytics at PG&E, said the fundamental idea is that rates need to get more granular in order to reflect how electricity customers actually use a utility’s products, which include energy generation, as well as the poles-and-wires delivery system, other services around that, and the utility’s public policy initiatives such as low-income programs. This approach also involves creating a rate that reflects a customer’s fair share of their cost of service, without creating other distortions in rate design.

“That’s the direction the state is going,” Everett said. “Really creating transparency around rates, really making sure our rates are meeting customers’ needs and making sure customers are paying for what they use…and not paying for other people’s costs.”

When asked why other utilities don’t take the same approach, Everett posited it’s mostly because they’re hesitant to do so.

“I think you’re going against a norm that’s been part of rate design for 100 years,” she said. “Creating rate classes based on how big you are or who you are, your demographic…is just the way utilities have been doing this for years.”

“Other utilities can start thinking in terms of creating different customer classes and recognizing that with technology evolution and customer choice, customers are not as homogenous as they used to be,” Everett continued. “This type of rate design worked fine in the 1970s, when everybody had pretty much the same type of load. […] Now you have customers that have a lot of choice, and we need to be thinking about how our customers are different and [considering] that it costs us something different to serve them.”

Moving to this new ratemaking model will require finding ways to gather more data. It could also be met with some pushback. Rooftop solar supporters have long opposed putting solar customers into a separate rate class from other residential customers, because these proposals typically reduce the economic benefits of going solar.

Things could be changing now that the solar market is maturing, though. And things could be different for EVs from the get-go, given that the additional load is generally a positive thing for utilities, whereas rooftop solar took load away.

PG&E says stakeholders have generally reacted favorably to the new subscription rate proposal so far. Everett said the California Public Utilities Commission and the advocacy group at the commission have also seen the plan receive positive responses. Regulators are highly motivated to approve this rate or something like it, she said, given that California’s two other investor-owned utilities already have CEV rates in place.

Because PG&E’s latest proposal isn’t tied to an EV infrastructure build-out and consequently doesn’t come with a big rate request, as previous EV filings have, the utility is hopeful it will move quickly.

Some industry members are too.

“ChargePoint applauds PG&E for the innovative commercial electric vehicle rate proposal that will, if approved, benefit EV drivers by significantly reducing barriers for operating charging stations in California,” said Renee Samson, director of utility solutions for ChargePoint, in a statement. ChargePoint hopes the new rate design will serve as an example for utilities around the country moving to support transportation electrification.”

“Creative new rate designs that help transit fleets like ours save on fuel costs will help enable us to make the transition to a 100 percent clean fleet, further reducing emissions on behalf of the residents that rely upon our fleet for safe, efficient, and reliable transportation throughout San Joaquin County,” said Donna DeMartino, chief executive officer for San Joaquin Regional Transit District. “PG&E’s proposed rate design provides a critical portion of that solution, and its approval will help bring us closer to our zero emissions goal.”

 

PG&E Proposes Ditching Demand Charges for Commercial EV Charging, by Julia Pyper, Greentech Media,  November 7, 2018.

With Gov. Brown Leaving, California Businesses Need Another Clean Energy Champion in Sacramento

The Intergovernmental Panel on Climate Change’s recent report makes it clear that the only way to prevent the worst effects of climate change is to dramatically reduce greenhouse gas emissions at the pace and scale necessary to hold global warming to 1.5° C.

That makes California’s climate leadership more important than ever. In September, the legislature passed a first-in-the-nation bill committing the state to emissions-free electricity by 2045, and other states and nations will be watching our progress.

We applauded Gov. Jerry Brown for signing the bill into law on the same day he issued an executive order setting a goal for a carbon-neutral economy, also by 2045. Now California must ensure that these visionary plans are followed by bold action. This issue is especially timely as the state prepares to elect a new governor.

Business leaders understand that a warming world is bad not only for the planet and the people who live on it, but also for the economy. California’s recent past serves as a preview of climate change’s coming attractions, including record heat, unprecedented wildfires, severe drought, rising sea levels, the spread of disease, and air that’s harder to breathe. As global average temperatures continue to rise, scientists tell us, these trends will only get worse.

That’s why we and other business leaders believe that California’s next governor must be fully committed to meeting the state’s clean energy and climate commitments — and building on them. A more stable climate poses fewer risks to people and the planet, enabling both a stronger economy and healthier environment.

California’s business community also sees the state’s pioneering clean energy and climate policies as vital economic and employment drivers that have attracted more than $49 billion in public and private clean energy investment. More than 542,000 Californians already work in clean energy and energy efficiency across the state, and the sector expects job growth of 10 percent in 2018.

This year, California overtook the United Kingdom to become the fifth-largest economy in the world. The state also announced it had hit its goal of reducing greenhouse gas emissions below 1990 levels four years ahead of schedule. Proof that a stronger economy and a healthier environment go hand in hand.

At a time when many federal environmental protections are being rolled back, California’s strong and consistent climate and energy policies matter. Clean energy, emission-free transportation, and energy efficient buildings are all important elements in forging a strong and growing clean economy.

Business leaders understand that they must be a part of the solution. When the sustainability nonprofit organization Ceres looked at what more than 600 of the largest publicly traded companies were doing to address climate change, it found 64 percent have commitments to reduce greenhouse gas emissions.

Clif Bar does its part by using 100 percent renewable energy, prioritizing sustainably sourced, organic ingredients, diverting more than 80 percent of our waste away from landfills and committing to transition all of our transportation fleet to electric vehicles.

While businesses have a crucial role to play, leadership in the halls of our state government remains essential. When Sacramento sets firm targets for emissions, clean energy, and efficiency standards, it gives businesses the market certainty they need to invest confidently in climate solutions.

California’s next governor must make sure the state continues to blaze a trail toward a growing economy powered by clean energythat doesn’t overheat the planet — and a more sustainable and more profitable future for all.

Kit Crawford and Gary Erickson are co-CEOs of ClifBar & Company, a family- and employee-owned food company, maker of organic energy bars and snacks. ClifBar is a longtime member of Ceres Business for Innovative Climate and Energy Policy (BICEP) Network. Ceres is a member of the #CleanEconomyGovernor campaign coalition. 

Mindy Lubber is CEO and president of Ceres. Ceres is a sustainability nonprofit organization working with the most influential investors and companies to build leadership and drive solutions throughout the economy.

 

With Gov. Brown Leaving, California Businesses Need Another Clean Energy Champion in Sacramento, by Kit Crawford, Gary Erickson, & Mindy Lubber, Forbes, November 5, 2018.