July 31, Ms. Kavita Kale, Executive Secretary Michigan Public Service Commission P.O. Box Lansing, MI Re: MPSC Case No.

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1 July 31, 2017 Ms. Kavita Kale, Executive Secretary Michigan Public Service Commission P.O. Box Lansing, MI Re: MPSC Case No. U Dear Ms. Kale, Attached for electronic filing in the above-reference matter, please find comments on behalf of ChargePoint, Inc. Please contact us if you have any questions. Respectfully, /s/ Kevin George Miller Director, Public Policy ChargePoint

2 STATE OF MICHIGAN BEFORE THE MICHIGAN PUBLIC SERVICE COMMISSION In the matter, on the Commission s own motion, ) to open a docket that will be used to collaboratively ) consider issues related to both the deployment of ) plug-in electric vehicle charging facilities and to ) examine issues germane to the use of compressed ) Case No. U natural gas as a motor vehicle transportation fuel in ) Michigan in a Commission sponsored technical ) conference. ) I. Introduction COMMENTS OF CHARGEPOINT, INC. ChargePoint is pleased to submit these comments in response to the above-reference Order issued by the Michigan Public Service Commission ( Commission ). ChargePoint is a leading manufacturer of electric vehicle ( EV ) charging equipment and services. Using ChargePoint products and services, customers operate more than 38,000 total charging spots, including 569 DC fast charge locations. More than 700 of our charging spots are deployed in Michigan. Fig. 1: ChargePoint charging spots in Michigan ChargePoint designs, develops, and deploys residential and commercial AC Level 2 ( L2 ) and DC fast charging ( DCFC ) electric vehicle supply equipment ( EVSE ), software applications, data analytics, and related customer and driver services aimed at creating a robust, scalable, and grid-friendly EV charging ecosystem. ChargePoint sells EV charging equipment and network services that enable EV charging station owners - site hosts - to provide charging services to their own or other EVs, for their customers, tenants or 2

3 employees. In almost every case, ChargePoint does not own or operate the equipment. ChargePoint sells charging solutions to a wide variety of customers, including residential EV owners, employers, commercial and industrial businesses, cities and public agencies, ports, schools, public transit, delivery truck fleet operators, and multi-unit dwelling owners. ChargePoint offers a broad array of products and services that can serve light, medium, or heavy duty electric vehicles. The site host network services offered by ChargePoint enable customers to manage their charging infrastructure using cloud-based software tools. These tools provide the station owner or operator everything needed to manage and optimize utilization of their charging stations EV charging operations, including online management tools for data analysis, billing and payment processing, load management and access control. Stations connect to ChargePoint over a secure, cellular data network (or Wi-Fi in the case of single-family residential) allowing station owners to manage all their charging operations from a single dashboard. Maintenance and customer service are a priority for our company. ChargePoint offers a comprehensive set of support services, including: a 24/7/365 hotline for station users, parts and labor warranty, site qualification, installation and validation services, and a help line for site host specific questions. ChargePoint stations include embedded metrology that enables separate metering of charging events and facilitation of other data collection without the need for additional utility meters. ChargePoint stations meet or exceed the requirements set forth in the electricity-as-motor-fuel sections of NIST Handbooks 44 (device code). In utility terms, our charging stations meet the accuracy requirements of ANSI C (1% class) as applied to embedded EV supply equipment ( EVSE ) metering. II. Comments a. Identifying sustainable roles for stakeholders in EV charging i. Michigan will be best served by maintaining a sustainable role for regulated utilities in the competitive EV charging market. Utilities have very important roles to play in achieving Michigan s transportation electrification goals. First and foremost, utilities are well positioned to ensure that the associated new EV load is incorporated into the grid in a safe, reliable, and efficient manner. This can be achieved in a variety of ways including EV education and outreach, load research and grid impact studies, technology evaluation, and demand side management programs to encourage off-peak charging behaviors. Jurisdictions throughout North America are also considering whether to allow utilities to utilize ratepayer funds to invest in EV charging equipment and services in what is currently a growing, competitive market. As the Commission considers whether to expand the traditional grid infrastructure role for utilities into solutions that normally exist on the customer side of the meter, it is important to consider the EV charging market today and how it is growing into tomorrow s market. The growth in both emerging and well-established EV charging markets is driven by competition, customer choice and private investment, which allows the market to quickly and efficiently respond to evolving consumer needs and technological requirements. Ratepayer-funded investments by regulated utilities are not inherently aligned or misaligned with respect to innovation, competition, and customer choice. However, the manner in which ratepayer dollars are invested in an otherwise competitive environment can either support or frustrate the continued growth of a sustainable, responsive market. ChargePoint is proud to be a partner of utilities around the country in deploying utility-supported charging infrastructure and pilot programs. ChargePoint believes that there is a vital role for utilities in supporting increased EV adoption and that the right program designs can encourage the installation of more charging stations around the state to lower a barrier to EV adoption and support scalable and sustainable growth in the competitive EV charging market. There are ratepayer and environmental benefits associated with increased EV adoption and managing the associated EV load on the grid. These benefits 3

4 include downward pressure on rates from increased electrical throughput associated with EV charging, balancing load with solar and other intermittent renewable energy on the grid, and cleaner air from fuel switching, especially in high traffic areas. Additional ratepayer benefits could be realized with charging solutions that allow for load management and dynamic or time-of-use pricing mechanisms to site hosts, given that EVs can be very flexible on when they need to charge. This necessitates that any utility program should require that associated charging stations participating in the program include demand response capabilities, two-way communications, and embedded energy metering. ChargePoint encourages Michigan to thoroughly investigate this topic and develop transparent criteria for evaluating and approving utility programs to ensure that competition, innovation, and customer choice continues in the market, and that the programs are in the best interest of ratepayers. Stakeholders from across the auto, utility, EV charging, and nonprofit sectors signed onto a series of Guiding Principles for Electric Vehicles and Charging Infrastructure which were signed by nearly 50 industry members, including Consumers Energy, Ford, General Motors, ChargePoint, and many others. 1 These principles should be considered when developing regulatory policy and utility programs. In determining whether and under what conditions to permit utilities to invest ratepayer funds in the competitive EV charging market, ChargePoint encourages the Commission to, at a minimum, consider the full range of costs and benefits to ratepayers as well as the potential impacts to competition, innovation, and customer choice. ii. Ratepayer-funded investments must support competition and innovation. The manner in which ratepayer-funded investments are carried out also affects alignment with state goals and the extent to which ratepayer investments will help, or hold back, the competitive market. From ChargePoint s experience in deploying more than 38,000 charging spots, site hosts that make a financial contribution to the charging station are far more likely to actively support the successful installation and ongoing preventive maintenance of the charging station because they have skin in the game. Historic and projected growth in the EV charging market show that private dollars are increasingly flowing into the market. If ratepayer funds are directed to leverage private funds and site host customer choice of equipment and services, the value of a program will increase, be more sustainable, and create a larger positive impact on deployment of EV charging equipment. Requiring site host participation in selecting the right equipment and services to meet the needs of their individual sites ensures a competitive process and will foster ongoing innovation in the market, which is eroded by utility procurements that pick and choose equipment and services for the site host, locking in the same technology for a decade or more. In almost all cases, ratepayer dollars must leverage the investment of private funds. It is essential that taxpayer- and ratepayer-funded programs accelerate the PEV market by supporting private investment, not supplanting it. Should ratepayer-funded investments be complemented by other forms of public investment, ChargePoint recommends that programs still require private matching payments to stretch the value of public investments through site host customer choice in equipment and services, efficiently site the equipment, and maintain healthy competition. Exceptions to private matching requirements could be made to overcome higher barriers in underserved markets or to further support increasing environmental justice. There is a wide variety of investment strategies that can reduce barriers to deploying infrastructure that would support a healthy, competitive EV charging market. The simpler the program, the easier it is to go from utility commission approval to implementation. This efficiency will save ratepayer dollars and speed up the time to market. One utility EVSE program design that is structured with simplicity in mind is the issuance of rebates for a set percentage of project costs. The rebate would apply to a portion of installation or equipment costs 1 White House Press Office, July, Guiding Principles for Electric Vehicles and Charging Infrastructure. Source: 4

5 while still requiring site host skin in the game, with the exception in underserved markets. Under this program design, participating EV charging site hosts receive a utility incentive to support the purchase and installation of smart EV charging infrastructure that meet core functional requirements, such as collecting data and providing the ability for load management. Rebate programs have been utilized by Puget Sound Energy, Sacramento Municipal Utility District, and Los Angeles Department of Water and Power among others. Cost recovery for utility rebates to can be approached in several ways. One approach would be to treat the rebate as a regulatory asset, thereby allowing a rate of return on the investment similar to other capital investments. Another approach, which was recently proposed by National Grid in Massachusetts (DPU Docket 17-13), would recover a performance-based incentive tied to achieving the program s deployment target. Another utility program design would focus on the installation of the electrical infrastructure on the customer side of the meter up to, but not including, the EV charging station itself. This is commonly referred to as the make ready. The utility would construct, own and maintain the electric infrastructure from the distribution transformer through the customer meter up to the charging station. By covering this electrical infrastructure, the utility reduces costs for customers to deploy charging stations without the need to own and operate the charging station itself. This program design has been approved in cases before the California Public Service Commission by Southern California Edison and Pacific Gas and Electric, and is also proposed by Eversource in a case pending before the Massachusetts Department of Public Utilities (DPU Docket 17-05). Under both program designs, the utility does not need to own and operate the charging stations providing for site host customer choice; however, by providing incentives or covering certain costs, the utility is able to set the minimum qualification standards for the charging equipment to ensure data, load management, and other key utility needs are addressed in exchange for the rate-payer investment. b. Recommendations for continuing the work of the Technical Conference i. The Commission should expand the Technical Conference to comprehensively address EV and EV charging policy issues. The Commission s final order on U indicated that the August 9 th Technical Workshop would be an initial step to discuss issues associated with the deployment of PEV charging. U-17990, February 28 Order, p. 48. The Commission subsequently characterized the Technical Conference as the beginning of the effort to collaboratively address PEV issues, U-18368, April 28 Order, p.3 ChargePoint strongly supports the convening of this Technical Conference by the Commission as a necessary, but not sufficient, condition to establish a comprehensive statewide transportation electrification strategy, as well as clear guidelines for regulated utilities to play an expanded-yetsustainable role in the competitive EV charging market. ii. The Commission should reconvene the Michigan EV Collaborative. ChargePoint recommends the recreation of the Michigan Electric Vehicle ( MEV ) Collaborative to fully engage with and make recommendations for the range of statewide EV and EV charging policy issues identified by the Commission. The MEV Collaborative should involve participation from entities across industry, such as those convened at the Technical Conference, and the range of state agencies identified by the Commission. U-18368, April 28 Order, p.3. The timeframe allotted to the MEV Collaborative to complete its work could be well targeted to ensure a balance between robust analysis and timely deliverables. There was widespread support for reconvening the MEV Collaborative across all parties to U-17990, including Consumers Energy. ChargePoint recommends that the Commission incorporate issues raised 5

6 at the Technical Conference into Staff s proposal for an MEV Collaborative directive. U-17990, Staff Reply Brief, Attachment A. Key tasks would include establishing a statewide DC fast charging roadmap, the conditions under which regulated utilities could own or operate public EV charging stations; evaluating whether, and how, investments in EV charging support the creation of widespread grid benefits; amongst many others. While ChargePoint has participated in contested proceedings to determine issues like these, and would be an active participant in Michigan should that be how the Commission chooses to proceed, we believe that a collaborative approach will best serve the interests of ratepayers, the market, and the people of Michigan. iii. If the Commission establishes guidelines based solely on the Technical Conference, then the process for developing those guidelines should be subject to robust stakeholder input. ChargePoint recognizes that there are many complex issues already before the Commission, while also sharing in the sense of urgency for aligning statewide policy to support sustainable growth in the competitive EV charging market. Should the Commission proceed directly to producing guidelines based on the Technical Conference and any related written comments, ChargePoint respectfully urges the Commission to provide substantive opportunity for interested parties to review, participate in public hearings on, and propose amendments to any draft report to be issued by the Commission. c. Complementary EV-related issues i. Residential rate design The vast majority of EV charging occurs at the home. Given longer residential dwell times, this is a use case in which there is a great deal of flexibility in when the vehicle must actually be charged. As such, drivers are often very willing, with the right incentive, to defer charging to later times when it is more ideal and efficient for the grid. Several options exist today with EVSE technology to enable and incentivize this charging behavior including load management and using the embedded EVSE meter to support on-bill, or off-bill, incentives based on specific EV charging time-of-use. Assuming associated programs are successful in accelerating EV adoption, a residential smart charging initiative would ensure that the majority of this associated EV load growth can be integrated into the grid in a manner that minimizes potential infrastructure upgrade risks and maximizes operational benefits. ii. Commercial rate design DC fast charging technology is rapidly becoming a standard charging option on battery electric vehicles. Battery capacities and the associated electric mile range for such vehicles also continues to rise, likely resulting in more vehicles needing a greater amount of charge in a shorter period of time. Access to DC fast charging solutions will play an important role to increase range confidence for the growing number of EV drivers and enable future market segments, such as heavier-duty truck and bus fleets, to go electric. However, DC fast charging stations are currently characterized by having a low load factor, with sporadic instances of high energy use due to a limited number of vehicles in the market that will use these stations in the near term. This can subject fast charging site hosts to significant demand-based charges, making it impractical for site hosts to provide fast charging solutions during the critical phase of early adoption. ChargePoint recommends that alternatives to traditional rate structures and utility cost recovery mechanisms be evaluated which specifically take into account electric vehicle load, across all use cases, along with the grid and societal benefits associated with transportation electrification. Eventually, the anticipated large scale adoption of electric vehicles and associated higher utilization of DC fast chargers will mitigate the impact of demand charges, but low utilization in the early years makes ongoing costs a significant barrier. 6

7 d. Immediate-term Actions i. Establish a regulatory exemption for third party providers of EV charging. ChargePoint has observed that clarifying the regulatory status of third party providers of EV charging equipment and services is an important step in order to provide the regulatory certainty necessary to support a competitive charging market and private investment. We respectfully urge Michigan to reach a statewide determination that the provision of EV charging services is not the generation, transmission, distribution, or sale of electricity to EV drivers. This recommendation drew broad-based support in U , including Staff and Consumers Energy. Third-party owners and operators of EV charging stations do not generate, transmit, distribute, or sell electricity to end users. Rather, they use electricity to provide EV charging service to their customers, tenants or employees. As other commissions have found, the use of electricity is just one component of the provision of EV charging service through a privately-owned charging station. The charging service provided by the charging station owner or operator is not delivered by that owner or operator over distribution system wires or circuits, but rather by a cord and a connector in the sole purpose of fueling an electric vehicle. The transaction between an EV service provider and an EV driver has nothing in common with a traditional sale of electricity by a utility to a customer of record. Indeed, non-utility companies selling charging services are themselves retail customers that purchase electricity from a regulated utility in order to provide charging services, which will in most cases include providing the user access to the charging station, use of related metering and communications software, participation in a network, billing, and various other options. In this respect, a provider of EV charging services has more in common with an internet café that allows users to plug in to charge their computer batteries or a cell phone batterycharging kiosk at the airport than with a regulated public utility operating a grid and selling electricity to local businesses and households. Determinations to this effect have been reached in California, 2 Massachusetts, 3 New York, 4 and seventeen other Commissions throughout the country. For the reasons listed above, these three referenced Commissions all determined that the provision of charging services by a private site host to a driver is outside of Commission s jurisdiction. ii. Support incentivizing highest utilization of EV chargers through price signals. In order for site hosts to be able to incentivize the highest utilization of their charging stations, it is essential that site hosts maintain the flexibility for setting a price for EV charging services, if any. The ability for site hosts to send price signals to drivers is of critical importance. The Commission should not impose restrictions on site hosts to determine pricing for EV charging services. The nature of refueling a vehicle at an AC Level 2 station is inherently different than refueling an internal combustion engine ( ICE ) vehicle, and the business models for site hosts of both types of technologies are similarly inherently different 5. Whereas refueling an ICE vehicle takes a matter of minutes and does not result in longer-term parking with the driver absent from the vehicle, charging an EV at an AC Level 2 2 Order Instituting Rulemaking to Consider Alternative-Fueled Vehicle Tariffs, Infrastructure and Policies to Support California s Greenhouse Gas Emissions Reductions Goals, Assigned Commissioner s Scoping Memo at 4-5 (P.U.C. Rulemaking No , filed Aug. 20, 2009) 3 Investigation by the Department of Public Utilities upon Its Own Motion into Electric Vehicles and Electric Vehicle Charging, Order on Department Jurisdiction over Electric Vehicles, the Role of Distribution Companies in Electric Vehicle Charging and Other Matters (Mass. D.P.U A, issued Aug. 4, 2014). 4 In the Matter of Electric Vehicle Policies, Declaratory Ruling on Jurisdiction over Publicly Available Electric Vehicle Charging Stations at 4 (NYPSC Case No. 13-E-0199, issued Nov. 22, 2013). 5 C2ES, Business Models for Financially Sustainable EV Charging Networks

8 station has a longer timeframe and often results in a parked, unattended vehicle. The combination of charging and parking services associated with EV charging infrastructure is unique. Similarly, DC fast charging involves a driver plugging in for typically minutes, where they may also park and leave their vehicle. The flexibility for site hosts to combine variable pricing for charging and parking services ensures that the driver returns to the vehicle when fully charged and allows other drivers to use that charging resource. Pricing policies set by the site host may also encourage the driver to visit the site and spend time shopping or otherwise provide value to the site host, which in turn will encourage the site host to set pricing policies that lead to the greatest possible utilization of that charging station. It is critical that a site host have the ability to incentivize turnover at the EV charging station. Limiting the ability for site hosts to incentivize drivers to leave once charging is complete would lead to an inefficient use of equipment and ultimately limits access to charging for all drivers, which is not a good use of ratepayer funding. In addition, limiting pricing options to either free or flat hourly rates does not allow site hosts to take into account the wide array of power needs across the EV market. The battery capacity and rate of charge of EV models vary greatly, from the 3.3 kw charging rate of the 2017 Toyota Prius Prime Plug-in Hybrid to 7.2 kw charge rate of the Chevrolet Bolt. By failing to incorporate a variable cost component associated with each vehicle s power draw, a Prius Prime would be assessed the same flat hourly or session fee as a Chevy Bolt while receiving approximately half of the electric mile range provided during the same period. This would create a discriminatory practice for any future utility program. III. Conclusion Thank you for the opportunity to provide these comments. ChargePoint looks forward to participating in the Technical Conference on August 9, as well as in the ongoing process to set forth a statewide strategy for electrifying mobility in Michigan. 8