California Regulator Clears PG&E’s Proposal to Offer Subscription Pricing for Commercial Electric Vehicles

The California Public Utilities Commission on Oct. 28 approved Pacific Gas and Electric Company’s proposal to create a rate class for commercial electric vehicle charging with two new rate schedules for small and large customers. The new rates feature a monthly subscription charge and a time-of-use volumetric rate intended to encourage charging during times of higher renewable generation and lower cost. The agency found that the proposal is reasonable as it provides a fuel switching incentive for vehicle owners through the use of lower off-peak and super off-peak volumetric energy charges and eliminates a demand charge. The order bars the utility from collecting any non-marginal distribution costs through the new rates as they would substantially reduce the subscription charge.

The order approves two types of rates: CEV-Small for charging sites with a load of up to 100 kilowatts and CEV-Large for those over 100 kilowatts. The commission noted that prohibiting the collection of non-marginal distribution costs addresses a concern that the subscription charge would burden customers that build and operate charging stations with low utilization rates. The rates do not employ cross subsidies as there is no commission-authorized revenue requirement for the new rate class to meet. Further, any revenue obtained from the rate class beyond marginal cost to serve them will be considered an overcollection to be redistributed to other customer classes.

The decision establishes a new scheme to replace PG&E’s overage fee proposal for customers whose demand exceeds the subscription level. The company proposed to charge customers 200 percent of the equivalent monthly kW subscription rate for additional units of subscription required to meet their actual demand each month. The order directs the company to provide a grace period of three billing cycles that begins when a customer first enrolls in a CEV rate, or adds additional charging infrastructure that increases load. By March 1, 2020, PG&E must file details regarding what constitutes a grace period qualifying event and describe how it plans to collect data on overages, and a timeline for evaluating the overage system to investigate if any modifications are necessary.

PG&E is required to file an application for a real-time electric vehicle commercial rate within the next 12 months, and convene an informal workshop to share data on the new rate class performance by March 1, 2021.