We’re Electrifying the Road
Phil Jones is Executive Director, Alliance for Transportation Electrification. He is a past president of NARUC and a former Washington state UTC commissioner. He is currently president of Phil Jones Consulting LLC, based in Seattle, Washington.
PUF's Steve Mitnick: Phil, tell me about the Alliance and what its mission is.
Phil Jones: The mission of the Alliance is basically to engage with state commissions all over the country. To take on this difficult overall challenge of meshing the regulatory and policy issues of the transportation and the electric utility industry.
We intend to adopt kind of a big-tent approach, and so, we've been reaching out to the auto OEM's, electric bus manufacturers, EV equipment vendors, environmental NGO's, and others.
But electric utilities are at the core of the alliance.
We're starting with the investor-owned utilities, and then reaching out to the consumer-owned utilities and rural cooperatives.
Seattle City Light, fortunately, from my home town in Seattle, Washington, is one of the founding members of the alliance among the utilities.
We have built a strong working relationship with the environmental NGOs as well, while respecting the independence and governance of such groups. The Alliance is a new 501(c)(6) industry group with our own board of directors and governance structure.
The Energy Foundation and the NGOs it supports have been great in this process, in trying to educate the commissioners and the staff on what our mission is trying to collaborate.
Collaboration is key. In the past two, three years, there have been a number of utility filings in various states, some better than others, and many of these have been litigated. Frankly, there has been too much litigation in the state commissions, and therefore our mantra has been let's strive for more collaboration and less litigation.
The commission process is sound. Commissions produce just and reasonable rates at the end of the day, but this is such a new and challenging subject. Fundamentally, since these are such complex issues, the Alliance is encouraging the commissions to engage in a broad, multi-stakeholder process at the front end to understand both the technologies of transportation electrification and the regulatory challenges.
We're encouraging stakeholder groups to form in each of the states, open engineering proceedings, and bring in national experts from every third-party provider, utilities, and the lenders. Then, hopefully, the commissioners and the staff can get a little more comfortable with some of these issues.
We can talk about some of the details and rate design and best practices, but in general, we want to transform the market for transportation electrification. Whenever you transform a market, the stand-alone business case for particular locations or charging technologies, such as DC fast charging, doesn't pencil out. So, we believe the utility can play a vital role as a catalyst in helping to get beyond the valley of death and transform this market.
Therefore, if a utility can pool the various charging technologies together and put them into a portfolio or a program, it can pencil out better using a cost-benefit methodology. So, in general, that is what the Alliance is encouraging the Commissions to do, and I think we have had some good successes in a short period of time.
We launched the Alliance in Baltimore with a large breakfast meeting that featured a panel with EEI, Plug-in America, the Energy Foundation, and the Southern Company, and got over two hundred folks to attend and participate. The Alliance launched with twenty-four founding members, and we are continuing to grow, with about thirty members today.
A lot of utilities are interested in joining, and I am working with them now. I am in the process of hiring staff, and enhancing the internal governance and organization. For the initial start-up phase, it has pretty much been me, Phil Jones, a former UTC commissioner and NARUC president, taking on this role.
But now we are entering a more mature phase of development with more structure.
Now, I must focus on getting people hired, dividing up the country by NARUC sub-region with specific assignments, advising our member utilities, electric vehicle supply equipment companies, EVSEs, and other members.
As well as enhancing our collaboration with other stakeholders. We have identified over twenty key priority states for our focus in 2018 and 2019.
PUF: What are some of those best practices? What are the issues that come up and the best practices that you discuss?
Phil Jones: Let me break it down into three areas: markets, planning, and rate design. In terms of the planning, what we're encouraging the commissions to do is to engage with other state agencies, like the state energy offices and the consumer advocates.
The smart cities movement is growing across the country, and we want to take advantage of that, as we have in Columbus, Ohio. Cities across the country, usually led by the chief sustainability officer, are getting very interested in transportation electrification.
Since the vertically integrated states still do long-term resource planning through the integrated resource plans, the IRPs, we are advising those state commissions to start thinking about the potential substantial load growth in this area.
There are several national studies done with projections for load growth to 2050 from transportation electrification. For example, The Brattle Group has done a study projecting fifty-six percent growth potentially by 2050. We have been circulating that and other studies to the commissioners and staff.
The second thing is market development. Electricity markets, of course, differ across the country. We have vertically integrated markets in the Northwest, the Southwest, and the Midwest, so we're saying, Look at your market structure. If you need a little boost from your legislature, and if you can get a bipartisan push, get a consensus on pushing the EV infrastructure.
If you don't, then you can engage with your legislature. At least engage with your Governor, where appropriate, or some key folks and try to get a consensus around how you think the market's going to develop.
Some states have asserted that the transportation electrification market is going to be led by competitive third-party providers, not the utilities. With those states, we want to engage in a broader conversation and re-assess that conclusion. And talk about the vital role that utilities can play in building our EVSEs and working with third-party providers to transform this market.
The utilities should know where the load is, for reasons of reliability. Is it going to be a flexible load? At the edge of the grid, there'll be reliability issues, depending on how quickly this load grows as EVs penetrate the marketplace.
Our pitch to the commissions is that there is a need to engage now, talk about the development of the market, and address how the utility can play a role and discuss issues like pilot programs, coordination with other state agencies, and rate design.
In some states like Texas or maybe even New York that have market operators and certain market rules, we realize that the options may be different for the distribution utilities for EVSE deployments. There may be issues around engaging with beyond-the-meter applications.
The Alliance still wants to engage with those commissions, of course, realizing that the development of the market is going to be quite different than in vertically integrated states.
The third area is rate design. Almost every place I've gone to in the last eight months, the EVSE vendors and stakeholders complain to the utilities about demand charges, and other aspects of rate design. We intend to engage on these rate design issues, of course, and have a policy-regulatory committee of our members that will be charged with taking on these issues.
I think many of us in the Alliance realize that, while the fixed costs of utilities need to be addressed in cost recovery, traditional rate design is not really designed to accommodate things like DC fast charging, or charging stations for multi-unit dwellings for the low-moderate income community. Or even for the shared, connected and mobile transportation services that are rapidly coming in to the marketplace.
We do intend to address seriously what are called SAEVs, or shared autonomous electric vehicles, since we see this trend accelerating in the marketplace. These companies, like Uber, Lyft, and Maven, are going to need public-facing charging station infrastructure, most likely DC fast charging. But their cycle time, load shape, and dwell times are going to be quite different than workplace charging or traditional overnight residential charging. In summary, the rate design aspects of our approach are going to keep our members quite busy, engaging with state commissions and stakeholders.
PUF: Do you have a timeline? Where do you think you'd like to be a year from now, or two or three years from now? What are your goals?
Phil Jones: First, we want to get EV adoption rates and penetration rates way above the paltry level where they are now. Even in California, we're way behind the curve of where we need to be if we want to achieve greenhouse gas reduction goals, and if we want to accommodate all the new EVs, the GMs and Teslas and Kias and Fords coming into the market.
For example, Electrify America has said that even with the investments in EVSE it will make in California in the next several years, they will satisfy only about eight to ten percent of the infrastructure needs that California needs to achieve its GHG goals by 2030.
Initially, we have selected about twenty-two states for 2018 and 2019 as some of the priority states we wish to focus on. Yet several state commissions have just surfaced in the last two or three months, not on that list, that have expressed an interest in starting a workshop or proceeding on EV infrastructure. I know this was a big job, but it has become even bigger as the word is spreading.
For the new states like the Minnesota PUC and the Alabama PSC, I have been advising them to start some sort of generic workshop, invite in the national experts and stakeholders as well as working with state and regional groups, and start coordinating the other state agencies and the legislative leadership where appropriate.
Moreover, we will work closely with our member utility in those states in trying to develop a good filing that we believe could pass muster with the commission.
We have various ways to measure success of the Alliance. One is the number of commission workshops and proceedings that have started recently. Another measure of progress would be a commission order or a policy statement or policy guidance, such as the one issued by the Washington UTC last June and the current process the Michigan PSC is engaged in.
Ultimately, the most important metric is the number of EVSE, or charging stations with network management systems, that have been approved and actually deployed in the ground, operating and providing services to EV owners and consumers.
PUF: If I'm senior staff or a commissioner or chairman of a commission, is my role important? Can I make a big difference here?
Phil Jones: This is where the commissioners differ almost philosophically at times. Each commissioner, as he or she assumes office, must ask basic questions. Are you quasi-judicial? Are you a judge? Do you just let filings come in, and then you referee among the parties? Or are you more quasi-legislative? How proactive can I be on issues that are more policy-focused?
These EVSE issues certainly bring these questions in to play, since they involve some policy and regulatory issues that cross various silos and sectors, and stretch some of the regulatory tool box issues. We are encouraging the commissioners to be more proactive on these issues, and, to the extent their rules permit them, engage with these issues earlier rather than later.
Our reasoning at the Alliance is this. If you simply wait for the filings to come in and are not proactive, your state may be left behind in this very dynamic and changing field of transportation electrification.
It involves not just regulated utilities, but also the automotive industry, the IT and big data industries, and related growing industries. In short, your state may not be in the forefront of these issues as this nascent market develops quite rapidly.
I have known many of the commissioners, and I have been advising them to become more proactive on these issues and get out ahead in identifying key regulatory issues. I am doing the same thing with other stakeholders, such as NASUCA and the consumer advocates.
Some commissioners, to be candid, prefer not to do that, but I'm sensing a lot of momentum toward engagement on these issues among the commissioners. And personally, I got to know many of them during my twelve years as a UTC commissioner and my work in NARUC leadership.
Also, among the two hundred-plus commissioners across the country, there are many new commissioners assuming office who have worked in the energy field for a long time. Especially the younger ones. They see the future a bit more clearly sometimes due to their age and diverse background.
The other issue that's really showing up regards the mobility of transportation. This whole EV initiative and the building of it is tied to what are called shared and autonomous electric vehicles, or SAEV.
This is not just Lyft and Uber. GM has a subsidiary called Maven. Maven is building out two new transportation network companies in six major cities, and testing the community concept. This will be a global push, and they will need to have a strong DC fast charging system with sensible rate design.
Since these loads will be significant, we believe that utilities must be involved directly in deploying this infrastructure. The location and cycle of charging for these shared vehicles are important factors.
This is an exciting new area. But we need to think through many issues. How much load growth will there be? Will mobile shared transportation increase vehicle miles travelled? How will we pay for the maintenance and upgrade of our roads and bridges in the future, since the gasoline taxes will be substantially less?
Although these issues, especially the last one, are not under the direct authority of state commissions, other state agencies need to be involved, and the commission may play an important role in coordinating these discussions.
Given the addition of this mobility of transportation issue to the mix, we at the Alliance are very excited about this dynamic and transformative future. We don't underestimate the challenges on regulatory and policy issues. But we are excited about engaging with state commissions and stakeholders across the country on these issues of transportation electrification.
PUF 2.0 Articles: We’re Electrifying the Road