California regulators approve $1 billion for EV charging
The California Public Utilities Commission has approved a $1-billion vehicle electrification charging project, with most of the money earmarked to accelerate the number of midsize and heavy-duty trucks on the state’s roads.
70% of funds will go towards charging medium- to heavy-duty vehicles. These combined contribute to a significant amount of greenhouse gases emissions to the transportation sector. California utility ratepayers will share the costs of the five-year program.
“It’s the highest priority,” Commissioner Clifford Rechtschaffen said. “We have very stringent state goals established by the Air Resources Board to electrify medium- and heavy-duty trucks and they need charging infrastructure in order to electrify their fleets.”
30% of the remaining funds will be used to charge light-duty electric cars at multiunit dwellings or close by.
This program gives priority to low-income and tribal communities, with 65% of funds going to underserved areas. Individual homes are not eligible for EV charging infrastructure.
The program will start in 2025 and run through 2029, with $200 million allocated each year through the state’s utilities. Rebates will be offered to customers as a way to give back the money.
Still, details about how the program works are being worked out. A study will be performed to determine the value of the rebate. Customers who are interested in installing the equipment will need to apply to a third-party administrator for the rebate.
“We don’t know exactly what the amounts will be and how much the budget will cover,” Rechtschaffen said, “but the idea is to cover all or most of the costs of the equipment.”
Truck charging infrastructure will be installed in a variety places including at truck stops, ports, and facilities owned by fleet management companies. Buses can also be parked at transit agency depots.
Although the cost to ratepayers is expected to be low — a commission staffer estimated less than $1 a month for each San Diego Gas & Electric customer, for example — the rebate program comes as many people complain that their monthly bills keep getting higher.
“I think over time electrification — including transportation electrification — will result in lower rates,” Rechtschaffen said.
Nov. 17 by 4-0 vote. A provision in the rebate program calls for an evaluation after three years.
“If at that point, we determine it’s just too much to bear for ratepayers, we can reconsider,” Rechtschaffen said.
The Public Advocates Office, the CPUC’s independent watchdog for ratepayers, issued a position paper last week on funding transportation electrification in California and said utility customers should not fund transportation electrification infrastructure, calling the practice regressive.
“Increasing electric rates to fund the state’s [greenhouse gas] reduction initiatives, therefore, places a disproportionate burden on low-income families,” the paper said. “This is also counterproductive as this increases the cost of fueling electric vehicles, which in turn reduces the incentive to purchase electric vehicles.”
It’s estimated that the transportation sector is responsible for more than half of all of California’s carbon pollution, 80% of smog-forming pollution and 95% of toxic diesel emissions.
Californians may be familiar with Governor. Gavin Newsom’s executive order banning the sale of new gasoline-powered passenger cars by 2035, the mandate also directed the California Air Resources Board to develop regulations requiring all operations of medium- and heavy-duty vehicles to achieve zero emissions by 2045.
The rule goes into effect by 2035 for drayage trucks — vehicles commonly used to transport freight from an ocean port to a short distance, or what transportation analysts call the “first mile.”
Like electric passenger cars, a major challenge for the zero-emission trucking segment is solving a “chicken and the egg” problem: Customers may be reluctant to buy an EV because there aren’t enough charging stations and there aren’t enough stations because EVs make up a relatively small percentage of vehicles on the road.
Over the next six-years, $10 billion will be allocated to the state budget for electric vehicles and trucks. The federal government’s Infrastructure Investment and Jobs Act will funnel several hundred million more dollars to California for similar efforts.
“We need all that and more, and we need a lot of private investment as well,” Rechtschaffen said. “Public investment is really essential in the next 3, 5, 10 years as the market transforms itself.”