Draft Resolution Approving IOU's New EV Infrastructure Rules and Memorandum Accounts

Summary:

• Under the proposed Rules, ratepayers cover the costs of service line extensions and electrical distribution infrastructure—or EV Service Extensions—for separately metered EV charging for customers other than those in single-family residences. Per the direction of Public Utilities ("PU") Code Section 740.19, these costs related to utility-side distribution infrastructure that support EV charging will be recovered through the IOUs’ GRCs. As a result, IOUs will no longer request approval for utility-side costs associated with separately metered EV charging in an application or AL proposing a new Transportation Electrification ("TE") program.

• For separately metered EV charging installed outside of TE programs, this approval will allow customers, other than those in single-family residences, to take service under the new EV Infrastructure Rules rather than Rule 16. The new Rules cover nearly the full portion of the make-ready infrastructure on the utility-side of the meter. EV charging that is metered with other load will not be eligible for the EV Infrastructure Rules.

• This Resolution requires modifications to the proposed EV Infrastructure Rules to create consistency in policy across the IOU service territories, increase transparency for customers, and ensure additional protections for ratepayers. This Resolution requires the IOUs to each file a Tier 1 AL prior to implementation to make the modifications that this Resolution orders and to address the outstanding implementation details related to the EV Infrastructure Rules. The IOUs must file these Tier 1 ALs within 60 days of the adoption of this Resolution.

• Approval of this Resolution permits PG&E, SCE, and SDG&E to offer these optional Rules to any customer, other than those in single-family residences, installing separately metered EV charging from no later than six months after the approval of this Resolution.

• Pursuant to PU Code Section 740.19(c), the CPUC and stakeholders will evaluate the effectiveness of these Rules in accelerating TE and protecting the interest of ratepayers beginning in 2025.

• This Resolution requires the IOUs to track costs on a site-by-site basis, among other requirements, within their proposed Memorandum Accounts, and additionally requires the IOUs to report data via the annual Joint IOU Electric Vehicle Load Research and Charging Infrastructure Cost Report to enable analysis and evaluation of the EV Infrastructure Rule.

Background:

• Assembly Bill ("AB") 841 (Ting 2020) requires the CPUC and IOUs to take numerous actions relating to TE, including establishing a new Rule or tariff to account for utility-side distribution costs associated with EV charging deployment.

Discussion:

    Assignment of Costs

• All three IOUs propose to establish new Rules that would serve as an alternative to Rule 16 in the instance that new electrical service and distribution system upgrades are required if a customer installs separately metered EV charging equipment. Where Rule 16 requires some costs of new electrical service to be paid for by the customer receiving the service, the new EV Infrastructure Rules assign more of the costs of service line extensions and electrical distribution infrastructure ("EV Service Extensions") to all ratepayers rather than the individual customer receiving service.
• Each IOU proposes to be responsible for planning, designing, and engineering its EV Service Extensions using the IOU’s standards for design, materials, and construction.
• Each IOU proposes to design and deploy all electrical distribution infrastructure necessary on the utility-side of the meter to support separately metered Electric Vehicle Supply Equipment ("EVSE") for all customers other than those in single-family homes.
• None of the IOUs propose to require any customer contributions and have limited the applicant’s responsibility to the cost associated with any necessary Environmental Studies or issue mitigation, all behind-the-meter costs, and voluntary overhead to underground conversion.
• Each of the IOUs should modify their proposed Rules to include a definition of “issue mitigation,” to ensure greater transparency for applicants. However, these costs should still be assigned to the applicant.
• The proposed costs assigned to the applicant and ratepayers within PG&E’s, SCE’s, and SDG&E’s proposed EV Infrastructure Rules are largely consistent, reasonable, and in compliance with AB 841.

    Exclusion of Participants of Previously Approved TE Programs

• It is reasonable to exclude participants of previously approved TE programs from the new EV Infrastructure Rules applicability, and additional language is needed to clarify this point. Within the Tier 1 AL, each IOU must add language to further clarify the limitations of the applicability of their Rules.
• SDG&E should add language within its proposed Rule to clarify that EVSE installed through SDG&E’s Power Your Drive, Power Your Drive 2, Power Your Drive for Fleets, Power Your Drive for Parks, VGI School Bus Pilot, or Power Your Drive for Schools programs are not applicable under Rule 45.

    EVSE Operational and Installation Requirements

• Each IOU proposes the same applicant eligibility language for taking service under their Rules. As proposed, the Rules would be open to all customers, excluding single-family residences, that install separately metered infrastructure for the exclusive use to support EV charging stations and incidental load.
• PG&E clarifies that the requirement for qualified stations is related to safety qualifications, such as an Underwriters Laboratory (UL) safety certification, and is not intended to apply to non-safety related qualifications and criteria. Regarding the concern around the approved quantity of EVSE PG&E clarifies that it is merely seeking to ensure that applicants install the same quantity of EVSE for which the EV Service Extension was designed. The Commission finds the IOUs’ clarification that qualified EVSE requirements would only apply to safety qualifications to be reasonable. However, as written, the IOUs’ proposed Rules are not clear. Each IOU should update its proposed Rule within the Tier 1 AL compliance filing to reflect the specific safety qualifications to which it is referring.
• SCE, SDG&E, and PG&E all address Charge Point’s concern that the term “proof of commitment to purchase and install” is vague and undefined. PG&E clarifies that a proof of commitment is any documentation of clear intent to procure and deploy EVSE (e.g., budget approval, grant agreement, request for proposal results, governance-body mandated procurement and deployment, etc.). SDG&E states that Charge Point’s suggestion that the EV Infrastructure Rule use similar requirements to the California Energy Commission California EV Infrastructure Project (CALeVIP) program seems reasonable. We also find the IOUs’ clarification on the term “proof of commitment to purchase” to be reasonable, however the IOUs should each update its proposed Rule within the Tier 2 AL compliance filing to reflect how an applicant can provide proof of commitment to purchase and install, including all the eligible documents.
• While it is reasonable that the IOUs require proof of commitment to install EVSE and a requirement to maintain the EVSE for five years, IOUs should provide additional transparency on the safety qualifications they will require for all installed EVSE and the process for approving the number of EVSE the applicant must deploy.

    Line Extension Length Limitations and Caps

• PG&E is the only IOU to propose a length limitation. In contrast, SDG&E states that on private property the EV Service Extension shall extend along the shortest, most practical and available route (clear of obstructions) as necessary to reach a Service Delivery Point designated by the IOU.
• PG&E’s proposal for a length limitation to the service line extension should be removed, and the IOUs should align their language on the preferred route of the infrastructure provided.

    Upsizing the Capacity of EV Service Extensions

• SDG&E is the only IOU to explicitly propose allowing an applicant to request the IOU build out additional capacity beyond what is necessary to serve the planned number of EVSE installed in the near term to help avoid upgrades in the future. As proposed, the decision to upsize the infrastructure is solely within SDG&E’s discretion.
• The Commission agrees with SDG&E and Charge Point that upsizing the capacity of the EV Service Extension initially can avoid the need for costly upgrades in the future and allow for applicants to incrementally grow their EV charging as they are able to afford additional EVSE. However, we also agree with TURN that we must balance this with ensuring that costs are reasonable and stranded assets are avoided. Further, the IOUs also have a financial incentive to build more capacity than is necessary, as they can rate base the investments and earn a rate of return.
• To address concerns, the Commission directs all the IOUs to offer future proofing and buildout of additional capacity beyond the capacity needed for the EVSE the applicant plans to install at the time of taking service under the EV Infrastructure Rule. However, we require that each IOU gets a signed commitment from applicants that they will install additional EVSE in the future and the approximate number of EVSE they plan to install. Each applicant must provide the IOU with its timeline for the installation.
• Within the Tier 2 AL filing, each IOU must describe its plan for future proofing. This should include a description of how the IOU will confirm that the applicant fulfilled its commitment to install the additional EVSE. The IOUs should additionally identify areas of coordination across energy programs, and describe how the IOUs will align all future electrification upgrades to streamline the process for customers, support multiple clean energy objectives, and reduce costs for both customers and ratepayers.

    Definition of EV

• On page 20 of D.20-09-025, the CPUC concludes that PU Code sections 740.2, 740.3, and 740.12 referencing EVs in fact “applies to light-, medium- and heavy-duty electric vehicle charging services, and off-road electric vehicle or off-road electric equipment charging services." Accordingly, we direct each IOU to include within its Tier 1 AL compliance filing a modification of its Rule to include the referenced definition of EVs from D.20-09-025.

     Implementation Timing of New EV Infrastructure Rules

• Given the desire to avoid implementation delays, the Commission directs the IOUs to begin offering service under the new EV Infrastructure Rules no later than six months, or more specifically 180 days, after the adoption of this Resolution.

    Initial Waiver of Customer Contribution Requirements, Coupled with Future IOU Proposal for Requirements

• PU Code Section 740.19(c) states that “[t]he new tariff shall replace the line extension rules currently used (as of July 1, 2020) and any customer allowances established shall be based on the full useful life of the electrical distribution infrastructure.” ” In response to this portion of AB 841, the ACR proposed that the new Rules or tariffs addressing utility-side distribution infrastructure related to EV charging should no longer include an allowance structure that would require a contribution by customers if project costs exceed the set allowance amount.
• Within the IOU's ALs and proposed Rules, none of the IOUs propose customer contributions. It is clear that PU Code Section 740.19 gives the CPUC the option to implement or not implement customer contributions. While the Commission elects not to modify the IOUs’ proposals to include customer contributions in this Resolution, the Commission agrees that customer contributions are allowable under the statute and that the Rules should include customer contributions.
• Customer contributions will not be required as a condition of taking service under the EV Infrastructure Rules initially. However, the Commission directs the IOUs to host a workshop to discuss the development of a proposal for an allowance structure within eight months of the adoption of this Resolution.
• The IOUs in coordination with Energy Division staff, ratepayer advocates, and other stakeholders shall submit a proposal for an allowance structure under the EV Infrastructure Rules no later than 180 days after the workshop.

    Timeline for Evaluation of EV Infrastructure Rules

• The Commission directs each IOU to add a timeframe clause into the applicability section of their Rules to inform customers that the CPUC will begin an evaluation of the Rule no later than after the completion of the IOU’s GRC cycle, following the one during which the AL was filed, and, at the latest, after the completion of SCE’s GRC cycle ending in 2024.
• While the policy may continue as the CPUC evaluates its impacts, the CPUC may modify the Rule following the evaluation. The IOUs should make the modification around the timing of the evaluation within their Tier 1 AL compliance filings.
• Additionally, the IOUs should notify the DRIVE service list, or any successor service list, six months prior to the end of the 2024 SCE GRC to notify stakeholders that the CPUC will evaluate the EV Infrastructure Rules in the beginning of 2025.

    Tracking and Reporting Cost Data for GRC Review

• In terms of defining reasonableness of these costs, the reasonableness shall be determined in relation to ensuring the reported costs are appropriately aligned with Section 740.19(b) and this Resolution, as well as ensuring that the costs do not exceed an appropriate level of spending for each cost category. Further, in order to evaluate and determine reasonableness of costs, we see value in directing the IOUs to take a granular approach to cost data reporting within their Memo Accounts.
• The IOUs’ Memo Accounts must attribute all labor and material costs to individual sites. Further, understanding the individual site-by-site expenditures is imperative to understanding the reasonableness of the expenditures.
• The IOUs’ Memo Accounts that this Resolution approves must include, but is not limited to, the following reporting requirements:

• The IOUs must use these costs categories to uniformly track costs associated with the new EV Infrastructure Rules within their Memo Accounts. The IOUs shall not have any variation between their definitions of cost categories.
• The IOUs shall additionally (1) submit proposed common cost category definitions for poles, vaults, service drops, transformers, mounting pads, trenching, conduit, wire, cable, meters, associated engineering and civil construction work, and other equipment and labor that the IOUs will cover under their new Rules, and (2) submit common cost categories for anything else the IOUs propose to cover under the Rules.

    Tracking and Reporting Cost Data for Programmatic Evaluation

• In addition to determining what costs the IOUs must report within their Memo Accounts, which is discussed above, the Commission must address what additional data collection is necessary for the CPUC and stakeholders to evaluate the effectiveness of the EV Infrastructure Rules in meeting State TE goals, accelerating the speed at which the State deploys EV charging infrastructure, and evaluating the impact to ratepayers.
• Given party comment concerns and the fact that the IOUs did not submit a common proposal for data collection on their own, this Resolutions directs Energy Division staff, in consultation with the IOUs and other stakeholders as necessary, to finalize a data collection template for the EV Infrastructure Rules and based on the ACR’s proposed minimum data collection requirements and party comments. Further, Energy Division staff should strive to align the data reporting requirements with the CEC’s CALeVIP program, to the extent feasible and practical. These data requirements will be incorporated into the EV Charging Infrastructure Cost and Load Reports, or any successor report, which the IOUs must comply with beginning with their 2021 report submitted in the Spring of 2022.

     Utilizing Existing Electrical Service Connections

• The Commission directs the IOUs to update their proposed EV Infrastructure Rules through the Tier 1 Implementation AL to default to utilizing existing service where technically feasible and cost efficient, targeting the lowest lifetime costs for ratepayers including maintenance and eventual provisions for VGI use cases.
• Additionally, the IOUs must include a provision within the Rules that they will discuss with each applicant the importance to the applicant of enabling VGI use cases at their facility, and whether the IOU and applicant should consider additional site design specifications to support VGI use cases.
• The main objective the IOUs must strive for is to reduce any barriers to using these installations for VGI purposes in the future.
• The CPUC is currently considering the adoption of a Submetering Protocol. If a Submetering Protocol is adopted, the CPUC may direct the IOUs to incorporate additional submeters beyond utility-grade metering within their Rules.

     Offering of Load Management Tools

• As SDG&E points out, through the EV Infrastructure Rules the IOUs will not own nor will they subsidize any of the behind-the-meter infrastructure. The Commission agrees with SDG&E that it would thus be inappropriate to require customers to purchase any specific capabilities for the EVSEs for which the customer alone is responsible.
• The Commission also agrees with the majority of parties who oppose including any requirement for automated load management ("ALM") within these Rules, citing to the lack of a CPUC approved definition(s) and criteria for how to implement ALM, outstanding implementation questions around costs and benefits, concerns around customer choice, and the potential for unintended consequences resulting from including a requirement for a specific load management tool. Additional input from stakeholders, additional data to answer critical questions around ALM, and additional CPUC guidance is necessary before any ALM deployment requirement can move forward. As the process for developing the needed definitions, criteria, data, and guidance on ALM develops through the CPUC’s implementation of D.20-12-029, the CPUC may revisit the topic of ALM, load management, and the EV Infrastructure Rules.
• Further, the Commission agrees with the many parties that state the IOUs should offer and educate applicants on load management solutions, without creating a requirement for applicants taking service under the new Rules. The Commission directs the IOUs to educate and offer each applicant taking service under the new Rules about available IOU and third-party load management solutions.

     Enrollment in a Time-Variant Rate

• SDG&E proposes to require participants to take service on an applicable time-varying rate, which is intended to reduce peak loads and promote the use of renewable resources. SDG&E clarifies that under its proposal the site host would be required to take service on a time-varying rate, but there is no requirement that the site host pass the signals along to drivers if they prefer to adopt alternative load management methods.
• Promotion of time-varying rates is a key component of the CPUC’s strategy for load management and integration of renewables. Requiring customer participating in the EV Infrastructure Rules to take service on a time-varying rate is reasonable.
• We direct the IOUs to each update their proposed EV Infrastructure Rules within the Tier 1 AL to reflect that as a default, participants will be enrolled on the commercial time-variant EV rate that each IOU offers, but that applicants may choose to change to another time-variant rate.

     Penalty for Failure to Provide Accurate and Full Accounting

• PU Code Section 740.19(a) directs the CPUC to require each IOU to provide an accurate and full accounting of all expenses related to electrical distribution infrastructure and apply appropriate penalties to the extent an IOU is not accurately tracking all expenses.
• Each IOU will incur a $500 per day penalty, which the IOU shareholders shall pay, following a reporting deadline in which an IOU fails to submit a report, submits inaccurate information, or submits an incomplete report.
• However, we also find the proposal to allow for a ten-day cure period to be reasonable and adopt this provision as well. This cure period will begin once the IOU has received notification of its failure to accurately or timely submit a report.
• As this Resolution further refines what reporting means, these penalties, as outlined in Section 740.19(a), will apply both to reporting of cost data within Memorandum Accounts and reporting of data through the EV Load and Cost Reports.

     Service Energization Timing Expectation

• Tesla suggests that the CPUC establish timelines for the IOUs to respond to EV charging installation service requests and have specific goals for construction and approval items (e.g., days from service request to utility service, days from construction to complete energization). The Commission finds Tesla and Charge Point’s comments to be reasonable, especially in light of the party support for a similar suggestion within the TEF. In particular Tesla’s suggestion to establish a metric for the total days from service request to energization could provide important targets for the IOUs in improving their service and transparency.
• However, the Commission also understand that different sites may have different timing demands, and thus an average number of days would be most appropriate.
• We direct the IOUs to adhere to an average timeline of 90 business days, per EV go’s suggestion in TEF comments, of days between service request to when the facility is energized. This updated timing expectation should be included within the Tier 1 compliance filing.

     Rate Impact

• Within their Tier 1 AL compliance filings, the IOUs should each submit the expected revenue requirement and rate impact resulting from these EV Infrastructure Rules through the end of 2024 when the CPUC will begin its evaluation of the Rules.

     Safety Considerations

• The safety considerations are similar to those associated with existing utility responsibilities associated with building new service. The utilities must continue to comply with existing utility policy on safety requirements and standards, as well as the Transportation Electrification Safety Requirements checklist adopted in 2018 via D.18-05-040. Thus, no incremental safety implications associated with approval of this Resolution are expected.