Dive Brief:
- Pacific Gas and Electric (PG&E) has asked the California Public Utilities Commission for permission to award a rebate to utility customers who buy or lease an electric car. The rebate would be in addition to the $2,500 state rebate and the $7,500 federal tax credit.
- The program would be funded through PG&E’s sales of Low Carbon Fuel Standard (LCFS) credits to California oil companies. Purchasing credits allows the oil companies to meet their LCFS obligation to reduce their carbon intensity. As a regulated utility, PG&E must return the sales proceeds to its customers.
- Utility customers who own LCFS credit-eligible natural gas powered vehicles and refuel at PG&E-owned stations would be remunerated through annual pro-rated gas bill discounts. If the CPUC approves, PG&E would begin issuing rebates in the second half of 2016.
Dive Insight:
As electric cars proliferate in California, the state's utilities are embracing them as grid assets. When enough EVs are plugged into the grid, a power company can use them to balance electricity supply and demand without generation resources and smooth out peaks and troughs in renewable energy output.
PG&E recently asked for CPUC approval to partner with the private sector to build 25,000 level two charging stations and 100 DC fast charging stations, about 25% of the infrastructure needed to meet the 2020 state target for GHG reductions in the utility’s Northern and Central California service territory.
California has the most electric vehicles of any state and about 20% of the nation’s electricity powered fleet. PG&E has over 60,000 electric vehicles in its service territory, the most of any California utility.
The California oil companies have fought the LCFS since it was proposed. The LCFS is part of the state’s set of policies aimed at cutting its greenhouse gas (GHG) emissions 80% by 2050. About 40% of GHGs come from the transportation sector.
Putting a price on emissions would be good for utilities because it would drive the uptake of electric vehicles which would in turn boost demand for the electricity that utilities sell, PG&E CEO Tony Earley Jr. told a conference recently.