Tackling the Common Challenges in Utility Transportation Electrification Programs: Exclusive Interview with Katie Sloan of Southern California Edison
- Aug 14, 2019 8:00 pm GMT
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The past decade has seen the electric vehicle (EVs) industry seeming to turn a corner and really shift the conversation from wondering if EVs really are the future to knowing they are and figuring out how to best plan for this evolution. The utility industry, especially, is recognizing the importance of being forward-looking. Fleets of electric cars, trucks, and buses being plugged into a local grid present not only one of the biggest challenges for power companies in the form of the largest single jump in expected power demand but also one of the most intriguing potential areas for innovation and solutions to utilize their mobile energy storage, increasingly flexible energy demand, and more.
As EV sales continue to rise, transportation electrification programs at utilities are rightfully becoming an area of great attention when those in utilities get together to meet and share ideas. The upcoming AESP Summer Conference, taking place in Toronto at the end of August, is no exception with the panel 'Common Challenges and Solutions in Developing Transportation Electrification Programs' promising to be a rather popular session. To provide the Energy Central community with a sneak preview of the topics that will be discussed at this panel and highlight the importance of discussing this topic, I had the opportunity to speak with Katie Sloan, director of eMobility at Southern California Edison (SCE) and panelist at this session.
Matt Chester: There’s clearly a lot of buzz around the electrification of the transportation sector, but as this panel will discuss it’s not without significant challenges. So, to start, what makes pursuing transportation electrification worth pursuing despite these high hurdles that are in the way? Beyond the obvious need to decarbonize transportation, what do utilities have to gain by this evolution?
Katie Sloan: For us, there are many reasons to invest in transportation electrification. It really started with a refresh of our strategy a few years ago. We looked at what the state of California was looking to achieve from a greenhouse gas emissions perspective. Through doing various analyses, we determined that the most cost-effective way to meet the state’s ambitions environmental goals was to first clean the grid and then to electrify transportation and buildings. That’s become a commonplace strategy today in 2019, but it was groundbreaking in 2016 and 2017 when we first introduced it.
Going beyond GHG benefits, for us in California there’s also a strong tie between cleaning up the transportation sector and addressing local air emissions to address health concerns in communities because we have the worst air quality in the country.
The other benefit to utilities that doesn’t get quite as much attention is the more effective use of our assets. By getting more electrical use from the grid we’re able to put downward pressure on rates, which helps all of our customers—both those who are electrifying and those who are not. It’s also a growth opportunity for utilities.
MC: Transportation electrification occurs across different and quite divergent sectors—from public transit to personal driving to long-distance shipping. What commonalities can be found across these sectors and where do the challenges that separate them make them particularly hard to address?
KS: From our perspective, some of the things that are similar are the types of programs and incentives that we’re offering. In California, utilities provide EV infrastructure solutions. The utility companies will build the charging station infrastructure and provide the rebates for the charging stations. In addition, we offer rebates for passenger vehicles through California’s Low Carbon Fuel Standard Program and the state offers rebates for medium and heavy-duty vehicles through the Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project.
The programs and the affordability incentives are similar across sectors. The biggest differences we’re seeing are based on the decision-makers, specifically between the individual use of passenger vehicles and fleet operators and the differences that go into making those decisions. From the passenger vehicle side, it is more hearts and minds decision, where people are familiar with cars and not so much with electricity as a fuel, questions about charging and costs and range of the vehicle and weighing those factors for what fits their lifestyle. We approach that with awareness and education campaigns.
For fleet ownership, that comes down to simply a business decision and total cost of ownership. These customers are operating many more vehicles. As soon as there is an economic benefit, they will look i at EV adoption strongly. We have much more complex conversations with fleet customers because we discuss how the operation of the vehicles fit into the operation of their business, and that’s their core concern, integrating without interrupting current business in a cost competitive manner.
These are very different conversations, even though what we’re offering from an incentive perspective is similar.
MC: When it comes to this transition in the transportation sector, what’s the role of the utilities? Is it to meet the evolving needs or is it to stay steps ahead and lead that transition?
KS: We break down the utility’s role into three main categories. Availability, meaning availability of the clean fuel; Affordability, both the rate and the incentives; and Awareness. It’s crucial to stay ahead of the trends of technology for several reasons. We can help educate our customers and we have a role to play in bringing them along. We’re in a unique position in our geographic area, having a relationship and lines of communication with all people and businesses in the area.
From a practical perspective, it’s really important for the utilities to stay ahead of the curve because it takes a long time for the regulatory process to move and we’re regulated companies. A really good example of that is a program we launched in May for medium- and heavy-duty trucks. We originally proposed that to our Commission in January of 2017. Between the regulatory process and then the efforts to then getting it available to our customers, there is quite a long lead time. And in 2017 it wasn’t as clear as it is today that we’d have the variety of makes and models of trucks available. It took a lot of forward-looking research and partnering with various stakeholders and it turns out we were right. We’re seeing a lot of market and policy trends that are starting to move this trend of medium- and heavy-duty vehicle electrification forward now, but that’s why it was and is crucial to remain a couple steps ahead.
MC: Adding in my personal experience here, I recently bought my first electric car and one of the first things I did was contact my utility to see what programs they offered to EV owners, and luckily I did because I got a rebate from them. More widely, though, do you see that customers are looking to utilities when it comes to advice and guidance on EVs or are they not yet fully seen by the common customer as an inherent partner in this transition?
KS: Some customers do, but not all customers. For us, that’s really important for the larger vehicles because we’re talking about more significant electrical loads that could require more construction and permitting time. When we’re out in the public talking to the customers, the main message we have is to talk to your utilities early and often if you are considering vehicle electrification. We do want to be the ones people think of, we want customers to have access to measures that help electrification be more affordable, and we want to educate them on how electric vehicles can fit into their lifestyle or business needs.
MC: Given that this transition has been in the process for a number of years, utilities have had time to find what works and what doesn’t work. What types of programs have you found to be the most successful and well received? Which have not garnered as much success?
KS: From a high-level perspective, most everything we’ve done has been successful in one way or another, but we still have a lot of lessons learned. The main one that we’re looking to address in California is how do we give ourselves flexibility from what is approved by the Commission to what is being requested by customers. As one example, we have one program where the customer needs to participate and provide data for 10 years. While going through the regulatory process, we proposed that it be lowered to 5 years, because we were already starting to hear from customers that some lease and others don’t know how long they’ll be in a given location, so they were hesitant to sign up with a program that required 10 years of participation. But ultimately that rule was kept in, and now as we’re implementing the program we’re hearing from more and more customers that this is a significant barrier. The way the framework is set up today through that regulatory decision, we’d have to go back through a longer than one year regulatory process to get that changed. So, we’re trying to now figure out how we can get early information from customers and get a more flexible program structure that allows us to react to the customer needs and market changes faster.
MC: What’s the most important priority for utilities in transportation electrification in the short-term, say the next year or two? What should be the top priority?
KS: In the near-term, the really big focus for us is in getting approval of a passenger vehicle program. We currently have a pilot for passenger vehicles that we have proposed to get to scale with a $760 million, four-year implementation. Getting approval of that is a huge priority for us, and across the board the common theme in priorities is this moving from pilot to scale. We’ve been doing pilots for three years now, and we’re moving to scaled programs where we’ll be doing 20 to 30 times the number of installations. Making sure we have all the internal technologies and processes in place so we’re ready to move quickly for our customers is really the near-term focus in the next two years.
The other priority, going back to the fleet customers we discussed earlier, is figuring out what educational tools we need to have in order to have the right conversation to help our customers be comfortable in adopting electric buses, electric delivery trucks, etc.
Another exciting development to note in California, related to the Low Carbon Fuel Standards Rule, comes from the rebate structures. Traditionally, electric utilities have had a rebate incentive offered, but the state of California is moving that to a statewide program that’s implemented at the point of sale and will come right off the sticker price. We think this will be a lot better for the customer. Instead of contacting your utility for the rebate, like you mentioned you did, it would come off the price of the car at the dealership and cuts out a step, making it a better customer experience.
MC: As you go into the AESP Summer Conference with your focus on transportation electrification, what are you hoping to learn personally? What topics have you excited (even outside of transportation)?
I’m first excited about what’s going on across North America in the electrification space to hear different approaches people are taking. Looking at the agenda, I’m also excited about the topics related to Big Data and using that to market and get to know customers more. We’re doing some efforts with that on our side, so I’m eager to hear about some lessons learned from other programs and new technologies and approaches.
If you're interested in learning more about the challenges and opportunities presented to utilities by transportation electrification, be sure to check out Katie's presentation this topic at AESP’s Summer Conference (in Toronto from August 27 to 29). You can learn more about the agenda and register for the conference here.