State Regulators Pushed California Forward on Climate Progress. It’s Time for the Market to Respond

California is making great progress in reducing greenhouse gas emissions. So far this year, more than a quarter of all the electricity produced in California came from renewable energy technologies, with solar being the fastest growing source of new generation. But if California is to meet its goal of reducing greenhouse gases to 40% below 1990 levels by 2030, the Golden State will need to both rapidly increase electric vehicle (EV) use, and charge them with more low-cost solar on the grid.

Governor Brown has established the goal of deploying 1.5 million EVs by 2025. While there is considerable early adoption and consumer acceptance, there are still less than 200,000 EVs in the state. One major obstacle to more widespread adoption is the lack of public charging facilities.

Governor Brown’s goal to increase the pace of EV adoption raises an important question: what role should utilities play in the rollout of EV charging stations?

Just about everyone agrees that in the long-term, there must be a competitive market for EV charging that rewards business and technical innovation.

The short term is a different story, and it’s a classic chicken and egg scenario: while the lack of public charging stagings is a roadblock to widespread EV adoption, there simply isn’t sufficient demand from EV users to drive significant deployment of accessible charging stations.

Electric utilities are in a unique position to accelerate the deployment of EV charging infrastructure. One major reason is because California’s utilities are currently developing and deploying sophisticated technology that can pinpoint locations on the grid where the electric system is already robust enough to support public charging stations. They can also begin making necessary upgrades to the distribution system and encouraging the connection of more local solar and other distributed technologies to meet increased demand for daytime charging.

In fact, the California Public Utilities Commission (CPUC) is already working on plans to encourage the private sector to invest in what it calls Distributed Energy Resources (DERs) that will both complement and substitute for utility grid investments. Getting the electric utilities themselves to fully embrace DERs has been a challenge for a variety of reasons, including lost investment opportunities.

The need for a more robust electric distribution infrastructure to serve millions of EVs could offer both utilities and private sector DER providers an opportunity to grow their businesses while meeting the state’s goal of reducing greenhouse gases. Of course, this grid modernization needs to be done in a way that minimizes the impact on electric ratepayer bills while both stimulating the market for DERs and working towards the State’s climate policy goals.

December saw a major milestone when Pacific Gas & Electric, a major California utility, received CPUC approval to deploy 7,500 charging ports over the next three years. While PG&E requested the authority to own all of the charging ports, the approval limits PG&E’s full ownership to only disadvantaged communities.

The decision also authorized PG&E to make the necessary distribution grid upgrades, regardless of location, to accommodate charging stations, and rely on ratepayers, not EV charging station developers or owners, to recover costs. By limiting the utility’s full ownership to only certain underserved markets, the CPUC’s decision aims to balance the need for early deployment of EV charging stations with the long-term goal of creating a competitive market for EV charging.

Consumers can take the lead to reduce greenhouse gases by the choices they make in clean transportation and energy technologies. California’s energy policy has been structured to enable consumers with those choices through programs that support solar and EV adoption, energy efficiency and demand response technology.

While utilities have a role in the evolving EV charging marketplace, the CPUC also plays an important role in ensuring that there is competition in the market, which leads to greater customer choice.

California’s goals to reduce greenhouse gases are ambitious, but they can certainly be achieved through a competitive and sustainable market for both EVs and accessible charging stations.