P. Hunt L. Renger M. Sheriff R. Thomas (U 338-E)

Transcription

1 Application No.: Exhibit No.: Witnesses: A.-0-0 SCE-0 D. Gunn P. Hunt L. Renger M. Sheriff R. Thomas (U -E) Rebuttal Testimony of Southern California Edison Company (U -E) in Support of its Application For Approval of its 0 Transportation Electrification Proposals Before the Public Utilities Commission of the State of California Rosemead, California September, 0

2 Rebuttal Testimony of Southern California Edison Company (U -E) in Support of its Application For Approval of its 0 Transportation Electrification Proposals Table Of Contents (Continued) Section Page Witness I. INTRODUCTION... L. Renger II. THE COMMISSION SHOULD APPROVE THE MEDIUM- AND HEAVY-DUTY VEHICLE INFRASTRUCTURE CHARGING PROGRAM AS PROPOSED BY SCE.... III. A. The Scope and Scale of SCE s Proposed Program Are Appropriate.... B. SCE s Proposed Program Meets the Objectives of SB C. A Phased Pilot Will Delay the Acceleration of Widespread TE.... D. SCE s Program Requirements Mitigate Costs and Ensure Utilization of Infrastructure.... E. SCE Cost Estimation Methodology, Vehicle Estimation Methodology, and Proposed Contingency Are Reasonable and Justified.... F. The Commission Should Reject TURN s Recommendation Supporting Specific Targets or Funding Limits by Technology or Market Sector.... G. Disadvantaged Communities Benefit From Expanded EV Markets and Charging Infrastructure.... H. SCE s Proposal Provides Adequate ME&O....0 I. SCE Will Report on a Comprehensive Set of Metrics.... J. Arguments Made by the Gas Lobby Are Incorrect, Irrelevant, and Should be Dismissed.... K. ChargePoint s Recommended Additional Workshop and Compliance Filing after a Decision Are Unnecessary and Would Cause Undue Delay.... SCE S COST RECOVERY PROPOSAL IS REASONABLE AND SHOULD BE APPROVED....0 M. Sheriff ii

3 Rebuttal Testimony of Southern California Edison Company (U -E) in Support of its Application For Approval of its 0 Transportation Electrification Proposals Table Of Contents (Continued) Section Page Witness A. SCE s Balancing Account Proposal is Reasonable and Consistent with Prior Large Projects and Will Result in an Accurate Tracking of Costs....0 B. SCE s Cost Recovery Review Proposal Appropriately Provides Opportunities for Commission Oversight and Review.... C. Capitalizing the Rebate Results in Equitable Ratemaking... D. Gunn. Treatment as Expense in the Charge Ready Proceeding was the Result of Settlement Agreements and Should Not be Considered Precedential... IV.. Clean Energy Fuels Comments Regarding Capitalizing Rebates as a Regulatory Asset Should Be Rejected... THE COMMISSION SHOULD APPROVE SCE S PROPOSED NEW EV RATES.... A. SCE s Proposed Distribution-Related Capacity Costs Are Appropriate... B. Customer Charge... C. EV Rate Demand Charge Assessment... D. DC Fast Charging Public Rate... E. Distribution EV Rates that Reflect Local Distribution System Conditions.... F. The Commission Should Reject ORA s Assessments of SCE s Rates Proposal.... P. Hunt R. Thomas V. THE COMMISSION SHOULD REJECT TURN S PROPOSAL TO ALLOCATE ALL REVENUES NOT RELATED TO DISTRIBUTION HARDWARE ACCORDING TO THE PUBLIC PURPOSE PROGRAM ( PPP ) ALLOCATOR.... Appendix A SoCalGas Data Request Responses to Question, and iii

4 Rebuttal Testimony of Southern California Edison Company (U -E) in Support of its Application For Approval of its 0 Transportation Electrification Proposals Table Of Contents (Continued) Appendix B CEFC Data Request Response to question Section Page Witness iv

5 Rebuttal Testimony of Southern California Edison Company (U -E) in Support of its Application For Approval of its 0 Transportation Electrification Proposals List Of Figures Figure Page Figure II- Annual CO Emissions LA Metro Study pp.... Figure II- Annual In-basin NOx Emissions LA Metro Study pp.... v

6 0 I. INTRODUCTION Pursuant to the April, 0 Joint Assigned Commissioner and Administrative Law Judge s Scoping Ruling ( Scoping Ruling ), SCE hereby submits its rebuttal testimony to parties August, 0 opening testimony on the standard-review proposals filed as part of the Application of Southern California Edison Company ( SCE ) for Approval of its 0 Transportation Electrification ( TE ) Proposals ( Application ). While parties opening testimony recommend modifications on certain issues, as discussed in detail below, most parties generally support SCE s TE Application and recommend that the Commission approve SCE s proposed Medium-Duty and Heavy-Duty Vehicle Charging Infrastructure Program and New Electric Vehicle ( EV ) Rate Design. Thus, SCE urges the Commission to promptly approve SCE s standard-review proposals. II. THE COMMISSION SHOULD APPROVE THE MEDIUM- AND HEAVY-DUTY VEHICLE INFRASTRUCTURE CHARGING PROGRAM AS PROPOSED BY SCE. SCE urges the Commission to approve SCE s proposal to deploy electric infrastructure, up to and including the make-ready stub, to serve charging equipment for medium- and heavyduty vehicles ( Proposed Program ). Under SCE s Proposed Program, participating customers Green Power Institute and Community Environmental Council ( GPI/CEC ), Santa Clara Valley Transportation Authority ( SCVTA ), The Utility Reform Network ( TURN ), Natural Resources Defense Council ( NRDC ), Greenlining Institute ( Greenling ), Plug In America, Coalition of California Utility Employees ( CCUE ), Sierra Club, Environmental Defense Fund ( EDF ), Office of Ratepayer Advocacy ( ORA ), CALSTART, Southern California Gas Company ( SoCalGas ), Tesla, Inc. ( Tesla ), Union of Concerned Scientists ( UCS ), Center for Community Action and Environmental Justice ( CCAEJ ), East Yard Communities for Environmental Justice ( EYCEJ ), San Diego Airport Parking Company ( SDAP ), ChargePoint, Inc. ( ChargePoint ), Clean Energy Fuels Corp. ( CEFC ) served testimony. A Generally supportive parties include GPI/CEC, CALSTART, UCS, CCAEJ, EYCEJ, NRDC, Greenlining, Plug-In America, CCUE, Sierra Club, EDF, and ChargePoint.

7 0 0 will purchase, deploy, and maintain qualified electric vehicle supply equipment ( EVSE ). After providing proof of purchase of eligible electric vehicles and EVSE, SCE will provide a rebate toward the cost of the EVSE. Customers must agree to take service on an eligible time-of-use ( TOU ) rate and participate in the program for five years. A. The Scope and Scale of SCE s Proposed Program Are Appropriate. The scope and scale of SCE s Proposed Program are appropriate, consistent with the Assigned Commissioner Ruling ( ACR ), and necessary to support the state s goals and provide a clear and certain solution to address market needs. As noted by CALSTART, SCE s Proposed Program is appropriately scaled to address GHG emissions reduction targets within its territories. The size of the proposed program is generally consistent with investments needed to support the state s climate goals, but is only a first step in a long and steep path towards the state s GHG goals. Some parties propose scaling down SCE s Proposed Program and recommend splitting it into phases. The Commission should reject these suggestions, as any reductions in the size, scope, or duration of the Proposed Program would prevent SCE from achieving the important objectives outlined in SB 0 supporting California s greenhouse gas ( GHG ) and air quality goals and accelerating the widespread adoption of TE. Additionally, the program size and scope will increase competitiveness across transportation electrification market segments by accommodating both large-scale and small-scale deployments to fit customer needs. Furthermore, because SCE s Proposed Program is specifically in the ratepayers interest as defined by Public Utilities Code 0., it should be approved as proposed. B. SCE s Proposed Program Meets the Objectives of SB 0. SB 0 requires the Commission to direct utilities to submit applications for programs and investments to accelerate widespread transportation electrification to reduce dependence on petroleum, meet air quality standards, achieve the goals set forth in the Charge Ahead California CALSTART Testimony, p. 0. ORA Testimony, pp. -; TURN Testimony (Borden), p. ; CEFC Testimony (Jensen), p..

8 0 0 Initiative, and reduce emissions of greenhouse gases to 0 percent below 0 levels by 00 and to 0 percent below 0 levels by 00. As demonstrated in SCE s testimony, the Proposed Program meets all of these objectives. SCE s Proposed Program addresses critical barriers to widespread adoption of medium- and heavy-duty transportation electrification, while also supporting third-party market participants. Reducing the size, scope, or duration of SCE s Proposed Program will reduce the program s ability to achieve the important objectives of SB 0, including, but not limited to, SB 0 s goal of meeting air quality standards and reducing GHG emissions. Additionally, the Commission intended to provide utilities flexibility to maximize benefits and consider innovative program designs, while establishing a market signal toward widespread TE. Because SCE serves communities in the only two air basins in the nation that are in extreme nonattainment for ozone (the South Coast Air Basin and the San Joaquin Valley Air Basin), a program designed to establish a market signal and serve all of the market is especially needed in SCE s service territory. C. A Phased Pilot Will Delay the Acceleration of Widespread TE. Splitting SCE s proposal into phases would create market uncertainty and would contradict SB 0 s goal of accelerating widespread adoption of transportation electrification. The Commission has also acknowledged the urgency required to transform the transportation sector. 0 A five-year program provides market participants and customers with the certainty needed to manage the significant expense of vehicle acquisition into their budgets. The mediumand heavy-duty market is significantly different from the light-duty market in that vehicles and P.U. Code 0. (b); ACR, p.. SCE Amended Testimony, pp SCE Amended Testimony, pp. -. ACR, p.. 0 In order to do so, the large electrical corporations will need to file their applications proposing TE programs and investments as soon as possible. ACR, p. (emphasis added).

9 0 0 operational adjustments require long lead times to build and implement. Consequently, ensuring that the program is available to customers for a prolonged period is essential for customer participation. By approving a shorter or phased program, the Commission would, in effect, create market uncertainty and promote a market freeze caused by a gap between phases. Additionally, a five-year program better aligns with other funding opportunities to support transportation electrification. By providing the infrastructure necessary to support medium- and heavy-duty electric vehicle charging, SCE s Proposed Program appropriately leverages other state and local programs that provide incentive funding for the purchase of medium- and heavy-duty electric vehicles. If the Commission approves SCE s Proposed Program, SCE will provide the infrastructure needed to support EV charging, including a rebate to cover the cost of the charging station. The customer can then pair SCE s program with state and local programs that provide incentive funding for medium- and heavy-duty electric vehicles. For example, the South Coast Air Quality Management District offers incentive funding for electric school buses. Without SCE s Proposed Program, school districts across our service territory, including those in disadvantaged communities, will not be able to take advantage of the SCAQMD program if they do not have funding to support vehicle charging and the associated infrastructure costs. This is just one important example demonstrating that SCE s Proposed Program must be large enough to serve all of the market need. D. SCE s Program Requirements Mitigate Costs and Ensure Utilization of Infrastructure. As directed in the ACR, each utility should use the guidance provided herein to select the appropriate types, size, and deployment schedule of programs to strive toward attaining the cost minimization and benefit maximization, efficient grid management and industrial SCE Amended Testimony, p.. ACR, p.. See

10 0 development objectives. SCE s Proposed Program requires customers to provide acceptable proof of qualified charging station purchase (together with actual pricing information) prior to SCE deployment of make-ready infrastructure. Additionally, eligible sites must serve as a charging location for in-scope vehicles and equipment. These requirements will ensure utilization of charging infrastructure once installed. Additionally, to help minimize individual site costs, customers must include an appropriate location within the site to deploy charging equipment in a cost-effective manner (based on factors such as proximity to transformers, length of trenching, and available T&D capacity), as determined by SCE in its sole discretion, but subject to the participating customer s agreement. Because these requirements meet the ACR s guidance, decreasing the size, scope, or duration of the program is not necessary to mitigate ratepayer risk. E. SCE Cost Estimation Methodology, Vehicle Estimation Methodology, and Proposed Contingency Are Reasonable and Justified. TURN states, SCE s cost and vehicle estimation methodology are not robust, accurate, or targeted enough to provide a basis for reasonable costs. TURN further posits that the ACR indicates, utility ratepayers will not be able to bear all the costs of accelerating TE in California. In addition, some of these vehicles would be converted to electric without ratepayer subsidy, which inflates the utility request for ratepayer funds. Both TURN and ORA recommend a lower contingency than the percent included in SCE s cost estimates. 0 ACR, p.. SCE Amended Testimony, p.. Id., p.. Id. p.. TURN Testimony (Borden), p.. ACR p., TURN Testimony (Borden), p.. 0 TURN Testimony (Borden), pp. -; ORA Testimony, pp. - & -.

11 0 0 TURN s and ORA s recommendations must be rejected. First, and as described in more detail in Section III, below, SCE proposes a one-way Transportation Electrification Portfolio Balancing Account ( TEPBA ) to record the actual TE Portfolio revenue requirements each month, with recovery capped at $. million (0$, direct spend without loaders) in O&M and capital spending over the five-year program period. The proposed one-way balancing account with a cost cap, combined with SCE s commitment to use a competitive procurement process to build the sites, ensures that SCE will not spend ratepayer funds in excess of an amount approved by the Commission. TURN's argument that SCE's vehicle estimation methodology is not robust is unsubstantiated. Leading experts in the field in conjunction with five California utilities developed the Transportation Electrification Assessment ( TEA Study ), which provided the foundation for SCE s vehicle forecast. Additionally, SCE's cost estimation considered charging and site characteristics of nine different vehicle segments, four different charging station compositions, different types of customer site compositions, types of transformers, types of wire and conduit, seven types of panels, civil construction for each different site types, Americans with Disabilities Act ( ADA ) requirements, and safety requirements. TURN fails to offer an alternative estimation methodology or identify how to improve SCE s estimates. In fact, TURN even relies on SCE s estimates to determine program deployment size for an arbitrarily scaled down program. TURN incorrectly claims that utility ratepayers will bear all costs of accelerating TE in California. TURN calls attention to forklifts, specifically, alleging that SCE s forecasting methodology is flawed because it includes certain forklifts that would be electric regardless of SCE s program (because no non-electric alternative exists for that type of forklift). TURN is incorrect. SCE s Proposed Program will fund infrastructure only for incremental (i.e. new) TURN Testimony (Borden) p.. Id. pp. -.

12 0 0 electric vehicle growth over the next five years. This growth includes charging infrastructure to support any incremental EV acquisitions regardless of whether the acquisitions are for conversion or fleet expansion. Both of these circumstances would require additional infrastructure to charge the vehicles and those customers should be eligible to take advantage of SCE s Proposed Program. Both TURN and ORA express concern with SCE s proposed percent contingency in its cost estimates. However, the percent contingency is customary, appropriately based on the scope and stage of the project, and consistent with the Association for the Advancement of Cost Engineering ( AACE ) and Electric Power Research Institute ( EPRI ) contingency standards. For the Proposed Program, the variety of customers eligible to participate, number of vehicle types within scope, and associated charging needs based on customer operations are diverse. SCE incorporated learnings from the Charge Ready Program Pilot and contracted an industry leading architecture and engineering firm to identify site requirements and cost estimates for sample sites. Even though SCE has a firm grasp on the unit costs for each of the components forecasted to be deployed at its diverse customer installations, actual costs will depend upon what types of vehicles are used at participating sites, the associated charging speeds, and the characteristics of each individual site. As such, it is reasonable and prudent to assume a percent contingency. TURN suggests that SCE includes a percent contingency only to cover variations in the unit cost of specific pieces of infrastructure. TURN is incorrect. Instead, the contingency covers variations in the scale and amount of deployment of those specific pieces. For example, SCE can accurately estimate the cost of 00 feet of metal conduit; however, SCE cannot determine how many feet will be deployed until specific sites participating in the program have been identified. ORA Testimony, pp. - to -; TURN Testimony (Borden), pp. -. TURN (Borden), Testimony, pp. -.

13 0 0 F. The Commission Should Reject TURN s Recommendation Supporting Specific Targets or Funding Limits by Technology or Market Sector. TURN advocates for a complete shift in program design by carving out a rebate specifically for forklift customers, establishing minimum adoption criteria (two or more EVs) for customer eligibility, and forming arbitrary fixed budgets for each vehicle segment. TURN s proposals will lead to customer confusion and jeopardize the broad objective of the program by selecting and favoring specific TE technologies rather than supporting the electrification of the entire medium- and heavy-duty market, consistent with the objectives of SB 0. TURN s recommendations would also compromise SCE s market-neutral approach of providing electrical infrastructure to support widespread TE acceleration in alignment with SB 0. TURN s recommendation would also increase program costs and administrative challenges by requiring 0 percent of sites be located in disadvantaged communities without regard to cost per site and setting strict spending limits for each vehicle segment regardless of customer interest. As detailed in its opening testimony, SCE identified site requirements that are adequate to ensure that participating customers deploy EVs in a safe and effective way. Because program costs will be determined based upon customer interest and participation, arbitrarily allocating fixed funding amounts to each technology segment will restrict customer choice and could prevent customers from being able to participate in the program if their technology segment is over subscribed. Establishing fixed funding amounts for each segment will not ensure customer participation or vehicle deployment in that segment (as TURN suggests). Instead, an arbitrary funding split between segments will only add additional administrative burden and customer hurdles to the program. TURN Testimony (Borden), p.. TURN Testimony (Borden), p., TURN s budget is sector-specific such that funds may not be shifted among sectors (internal citation omitted). SCE Amended Testimony, pp. -. TURN Testimony (Borden), p..

14 0 0 TURN also argues that budgets for SCE and PG&E should be the same for the first phase of a medium- and heavy-duty infrastructure program. TURN, however, fails to account for the differences between SCE s and PG&E s territories. These differences make it unlikely that appropriate funding levels would be the same for each utility. SCE serves a greater number of goods-movement-related industrial customers, including the Port of Long Beach, warehouses, distribution centers, and intermodal facilities along highways in the Los Angeles Basin, Riverside County, and San Bernardino County. Additionally, SCE s serves the only two air basins in the country that are in extreme non-attainment for ground-level ozone. Consequently, SCE s territory faces more significant air quality challenges than PG&E s, reinforcing the need for greater investments to accelerate TE adoption. G. Disadvantaged Communities Benefit From Expanded EV Markets and Charging Infrastructure. Several parties acknowledge the importance of adequately representing disadvantaged and low-income communities as beneficiaries of SCE s program. In particular, ORA and TURN recommend that specific percentages (0 percent and 0 percent, respectively) of charging sites should be located in disadvantaged communities. 0 Neither, however, offers reasonable justification supporting its proposed percentage. If SCE s Proposed Program is approved, disadvantaged communities in SCE s service territory will benefit from reduced air pollution from mobile sources as traditionally-fueled medium- and heavy-duty vehicles are converted to electric. In order to demonstrate its commitment to improving air quality in disadvantaged communities, SCE is prepared to reserve a portion of total program funding (i.e., infrastructure SCE Amended Testimony, p.. 0 ORA Testimony p. -; TURN Testimony (Borden) p.. TURN proposes that 0% of sites should be located in disadvantaged communities based on SCE s Charge Ready Pilot Program deployment to date. TURN Testimony (Borden), p.. The Charge Ready pilot, however, is not analogous because the vehicle technologies, customer segments, and site host locations are different for the Proposed Program.

15 0 0 and program-specific marketing, education, and outreach ( ME&O )) for deployment in these communities, if SCE may later release any unused funds to other sites that are interested in electrification. At the halfway point of the program, SCE would release any unused funds from the disadvantaged community reserve for use by any eligible customers. SCE will periodically inform the advisory board about the status of the disadvantaged community deployment and, where possible, vehicle use and provide these updates in its program reports. H. SCE s Proposal Provides Adequate ME&O. GPI/CEC call for SCE to spend 0 percent, roughly $ million, of SCE s Proposed Program budget on ME&O. SCE recognizes the importance of E&O to achieve adequate deployment volumes and encourage transportation electrification; however, SCE was granted broad ME&O funding thorough the Charge Ready Program Pilot, including funding for SCE s TE Advisory Services. SCE s current programs provide broad market education about the benefits of fueling from the grid and support SCE s commercial customers adopting TE. SCE communicates through a mix of media channels, including SCE s website, digital banners, search engine marketing, social media, radio ads, and sponsorship at local EV events. SCE will soon be engaging in a program to provide outreach and education to automotive dealers, to further expand channel reach and provide a more comprehensive experience for potential EV purchasers. As stated in the ACR, SCE is unable to scale up or expand funding for projects authorized under D.-0-0 (the decision approving SCE s Charge Ready and market education programs). Consequently, SCE is not currently proposing to scale up its broad market education program or TE Advisory Services. SCE s application, however, does include over $ million dollars in ME&O collateral development and staffing to support the Proposed Program. Additionally, SCE will collaborate with stakeholders, including community-based organizations, to identify site locations and conduct effective outreach and education. This GPI/CEC Testimony, p.. ACR, p.. 0

16 includes coordination with organizations in areas where charging stations are being deployed in order to ensure that outreach materials and activities are prepared in appropriate languages, are designed to reach and engage low- and moderate-income communities, and that this information is conveyed by organizations that are trusted in the communities. Ultimately, SCE will target its education and outreach to maximize participation by sites that are located in, or will greatly benefit, disadvantaged communities. I. SCE Will Report on a Comprehensive Set of Metrics. TURN argues that any approved program should include robust data collection. Below are TURN s proposals as well as SCE s responses: 0 0 TURN Request: A bottoms-up accounting of each non-light-duty sector to determine a more accurate estimate of the number of traditionally-fueled vehicles that can reasonably be forecast and displaced with EVs particular to each utility territory. o SCE Response: A bottoms-up accounting of the non-light-duty sector is unnecessary and will only delay this proceeding. The TEA Study forecasts already incorporate a similar methodology, which SCE used to develop its forecasts for the Proposed Program. The TEA Study details the forecasting methodology for each technology in Appendix A. As described above, the TEA Study methodology is robust and therefore an additional accounting of each non-light-duty sector is unnecessary. TURN Testimony (Borden), pp. -. TURN Testimony (Borden, p.. See the California Transportation Electrification Assessment, Phase : Final Report, available at FINAL_Updated_00.pdf: Forklifts p. ; Truck Stop Electrification p.0; Transport Refrigeration Units p.; Port Cargo Handling Equipment p.; Airport Ground Support Equipment p.; Medium-Duty Vehicles p. ; Heavy-Duty Vehicles pp. -.

17 0 0 TURN Request: Relative cost-effectiveness (dollar per greenhouse gas emissions avoided) of each site and non-light-duty sector and more detailed understanding of what investments best reduce particulate matter in disadvantaged communities. o SCE Response: SCE agrees that comprehensive data collection and reporting is essential and SCE has proposed to collect information including, but not limited to, site costs, customer deployments, emissions reductions (GHG, nitrous oxides ( NOX ), particulate matter ( PM )), and impacts on disadvantaged communities. SCE will provide this information in status updates to the Advisory Board as well as in its public annual reports. The status reports may also include recommendations from the Advisory Board to improve the program. SCE also plans to coordinate with California Air Resources Board ( CARB ), California Energy Commission ( CEC ), the South Coast Air Quality Management District ( SCAQMD ), and California Public Utilities Commission ( CPUC ) planning teams to provide program findings and support future planning efforts. TURN Request: An evaluation of which customers should receive reduced support from SCE s program by calculating each site or sector s willingness to pay based on the individual and ratepayer payback period relative to other sectors and the commercial, economic, and technical maturity of electrification for each respective sector. o SCE Response: Determining a willingness to pay is not appropriate in the context of utility ratemaking, nor is it consistent with a market-neutral, TURN Testimony (Borden), p.. TURN Testimony (Borden), p..

18 0 0 large-scale program. SB 0 calls for the widespread acceleration of transportation electrification, which supports SCE s decision to remain technology neutral and not to select specific TE technologies or market segments to accelerate over others. It is not beneficial to determine the commercial, economic, and technical maturity of each sector, because it is not relevant to SCE s implementation of the Proposed Program. Additionally, technical and commercial availability are flawed evaluation criteria, as they do not equate with the attractiveness of a technology. TURN s implication that a mature technology does not require utility program support is incorrect transportation electrification requires upfront investments from customers and has significant operational impacts as compared to conventional transportation. SCE supports comprehensive data collection throughout the Proposed Program as described on page of its testimony. For the reasons stated above, TURN s additional data collection recommendations and specific evaluation metrics are overly burdensome and would not improve the Proposed Program. J. Arguments Made by the Gas Lobby Are Incorrect, Irrelevant, and Should be Dismissed. SoCalGas claims that encouraging transportation electrification will displace natural gas technologies, thereby causing stranded natural gas assets. CEFC additionally derides utility support of zero-emission technologies because these technologies will come at the expense of making large new investments in natural gas vehicles. 0 The arguments of SoCalGas and CEFC (together, the Gas Lobby ) are fatally flawed and must be dismissed, for the reasons set forth below. SoCalGas Testimony, p.. 0 CEFC Testimony (Couch), p..

19 0 0 First, all arguments in support of natural gas and other alternative fuels are out of scope in this proceeding. As defined in SB 0 and stated by Commissioner Peterman in the ACR, Clearly, vehicles that are unable to use grid electricity and rely exclusively on natural gas or hydrogen do not fit the TE definition. Accordingly, the SB 0 TE applications shall not propose these kinds of projects and investments. Consequently, the Gas Lobby s testimony is out of scope for this proceeding and should not inform the Commission s decision on SCE s Proposed Program. Second, both SB 0 and the ACR clearly call for programs that accelerate widespread adoption of transportation electrification, without regard for any potential impact on existing natural gas infrastructure. SB 0 states, [w]idespread transportation electrification is needed and requires electrical corporations to increase access to the use of electricity as a transportation fuel. Additionally, the ACR states that there is value in TE proposals in all market segments. If the legislature or the Commission had intended for the utilities only to file applications for programs and investments in transportation electrification in market segments where no other alternative fuel infrastructure currently exists, the legislation and resulting ACR would have made that clear. For example, the ACR specifically mentions transit buses as an example of possible projects and investments that provide the biggest impact for the amount of money spent, even though natural gas transit buses exist in today s market. Third, by making misleading claims about environmental performance and recommending that SCE s Proposed Program exclude heavy-duty vehicles, SoCalGas would inhibit SB 0 s goals to stimulate innovation and competition in transportation electrification, ACR, p.. P.U. Code 0.(a)()(B) and (E). ACR, p.. Id. SoCalGas Testimony, p..

20 0 achieve the Charge Ahead California Initiative goals, and achieve California s 00 and 00 GHG-reduction targets. SoCalGas s claim that natural gas vehicles provide public health and societal benefits that are equivalent or superior to those offered by EVs is false and misleading. SoCalGas quotes findings from a September 0 study ( LA Metro Study ) performed by Ramboll Environ on behalf of the Los Angeles County Metropolitan Transportation Authority ( LA Metro ), which dubiously claims that compressed natural gas ( CNG ) buses using renewable natural gas ( RNG ) reduce greater amounts of NOx and GHG over a 0-year timeline. However, this summation and comparison of total reductions over 0 years is only due to the study s assumed artificial delay of electric bus deployment that restricts electric bus deployment until after 0 and slowly phases in electric bus deployment over years. Conversely, the study assumes immediate replacement of 00% of the market with RNG beginning in 0 and replaces all CNG buses with Low-NOx engines over only ten years. Both EV and Low-NOx CNG bus technologies are available and being deployed today. Therefore, arbitrarily delaying the implementation of one technology to favor another is not only disingenuous but delivers questionable results. As shown in Figure II- and Figure II- (reproduced below), the LA Metro Study concludes that electric buses reduce greater NOx and CO than even the most efficient Ultra-Low NOx CNG buses fueled with RNG once a comparable full deployment is achieved for both technologies. SoCalGas Testimony, p..

21 Figure II- Annual CO Emissions LA Metro Study pp.

22 Figure II- Annual In-basin NOx Emissions LA Metro Study pp. This conclusion is also supported by 0 RNG production data. Even though SoCalGas s testimony discusses the promises and fervently claims the benefits of RNG, SoCalGas admits to not tracking any information on current RNG production, including sources and volumes injected into its own system. SoCalGas also does not forecast RNG production. Clean Energy Fuels Corp (CEFC) did provide details in response to a similar data request. CEFC states that roughly 00% of the renewable natural gas delivered in California in 0 was sourced from landfills with a GHG content of g COe/mega-joule. 0 This is a significantly higher carbon intensity than the carbon-negative rating advertised by SoCalGas in SoCalGas Data Request Responses to Question and, attached hereto as Appendix A. SoCalGas Data Request Response to Question, attached hereto as Appendix A. CEFC states that roughly 0 million gallons of gasoline equivalent (GGE) were produced and used in the transportation sector in 0, of which nearly 0% was delivered by CEFC. 0 CEFC Data Request Response to question, attached hereto as Appendix B.

23 0 its testimony and higher still than the CARB-regulated carbon intensity of electricity used in the Low Carbon Fuel Standard. Consequently, SoCalGas s suggestion that the Commission order measures to prevent customers from fuel switching to electric because natural gas technologies offer benefits that are equivalent to or superior to those offered by EVs should be rejected. SoCalGas asserts that SB 0 goals require a portfolio of fuels and technologies in addition to TE and recommends restricting the scope of TE programs by vehicle classification. This would carve out a market segment (e.g., heavy-duty vehicles) to be filled by natural gas vehicles instead of EVs, according to SoCalGas. Contrary to SoCalGas s claims, increased deployment of electric vehicles does not prevent other advanced clean vehicles and fuels from being deployed in the market. This is especially true for heavy-duty vehicle technologies that, as SoCalGas states, are commercially available and cost-effective today. Further, SCE s proposal only serves a small portion of the number of clean vehicles that may need to be deployed to achieve California s ambitious climate goals. K. ChargePoint s Recommended Additional Workshop and Compliance Filing after a Decision Are Unnecessary and Would Cause Undue Delay. ChargePoint asserts that the Commission should schedule a staff-facilitated workshop within 0 days of the final decision adopting SCE s proposals to discuss and offer suggestions at SoCalGas Testimony, p. 0. Average California Electricity ELC00 adjusted using the heavy-duty bus EER of. is gcoe/mega-joule. SoCalGas Testimony, p. -. SoCalGas Testimony, p.. SoCalGas Testimony, p.. SoCalGas Testimony, p.. CARB Mobile Source Strategy estimates that nearly 0,000 medium- and heavy-duty trucks would have to meet or exceed the 00 Low NOx and EPA GHG Phase II standards by 00. Available at: p.. SCE s program is forecasted to support roughly,000 medium- and heavy-duty trucks.

24 0 0 the workshop or in written comments on project and implementation plan details. ChargePoint also advocates that SCE should be required to submit a compliance advice filing following the workshop that will include: a detailed project description and timeline for implementation, specific requirements applicable to equipment and service providers and participating site hosts, a detailed data collection and review process, a draft application form, and draft contracts. As discussed below, the Commission should reject ChargePoint s recommendations because procedural and proposed mechanisms are already in place to address concerns of all intervenors. In its testimony, SCE proposes various forums to engage all stakeholders. 0 If the Commission approves SCE s proposal, SCE intends to file an implementation advice letter with specific programming details. ChargePoint and other intervenors will have the opportunity to respond to that advice letter with any concerns. SCE intends to form an advisory board with customers, ratepayer advocates, environmental and disadvantaged community advocates, and industry stakeholders to provide input, guidance, and suggestions on the execution and improvement of the program. Establishing this type of forum has been very valuable to support SCE s programs by allowing board members to provide useful feedback, helping SCE improve the programs processes, and promoting transparency about the programs implementation. SCE invites all intervenors, including ChargePoint, to participate in the advisory board. Additionally, SCE proposes to provide quarterly status reports to the Commission s Energy Division and other stakeholders. The proposed reports will evaluate: () customer interest and satisfaction surveys, () processes such as procuring deployment services, time, and costs, and () post-deployment impacts. The status reports will also include updates about ChargePoint Testimony, p. 0. Id. 0 SCE Amended Testimony, pp. -,. SCE Amended Testimony, p.. Id. Id.

25 0 0 progress, achievements, and lessons learned executing the program. The status reports will also include recommendations from the Advisory Board to improve the program. SCE further proposes to include program information in its annual reports. All intervenors, including ChargePoint, will have access to the reports and the opportunity to provide input. Therefore, the Commission should reject ChargePoint s recommendations because various forums exist to include stakeholder input through the implementation advice letter, the TE advisory board, and the status reports. III. SCE S COST RECOVERY PROPOSAL IS REASONABLE AND SHOULD BE APPROVED. A. SCE s Balancing Account Proposal is Reasonable and Consistent with Prior Large Projects and Will Result in an Accurate Tracking of Costs. SCE proposes a one-way Transportation Electrification Portfolio Balancing Account ( TEPBA ) to record the actual TE Portfolio revenue requirements each month, with recovery capped at $. million (0$, direct spend without loaders) in O&M and capital spending over the five-year program period. In addition, SCE proposes to include a forecast annual revenue requirement in distribution rates effective January of each year, for at least five years, or until the TEPBA-related costs are included in a future general rate case ( GRC ). To help ensure that customers only pay the actual TE Portfolio revenue requirements associated with the capped funding amount, SCE proposes to transfer the revenue requirement recorded in the TEPBA to the distribution sub-account of the BRRBA on an annual basis. This ratemaking is Id. SCE Amended Testimony, Table I-, p.. The TEPBA will account for and record the individual revenue requirements for each of the six priority-review projects and the standard-review program, although only the standard-review program is addressed in this testimony and included in the $. million cost cap. 0

26 0 0 similar to the Commission-authorized balancing account operation for SCE s SmartConnect program and SCE s Charge Ready Program Pilot. ORA agrees that a one-way balancing account should be approved, capped at the amount authorized by the Commission. TURN misunderstands SCE s TEPBA proposal and states, the Commission should reject SCE s annual, two-way balancing-account proposal if the Commission ultimately does not adopt the budget and program modifications that Mr. Borden recommends in his direct testimony regarding this issue. TURN recommends that the Commission should instead adopt a one-way balancing account that is trued-up annually and has no carry-over of unspent revenue requirement from one year to the next. In fact, SCE s TEPBA is a one-way balancing account with a cap on total funding recovery. In addition, through the operation of the BRRBA, a true-up between the forecast revenue requirement collected in rates and the recorded revenue requirement occurs annually and, therefore, any unspent collected revenue requirements are returned to customers on an annual basis. The total spending authorized over the five-year program period, however, would be unchanged. This annual true-up of revenue collected in the BRRBA with costs recorded in the TEPBA is consistent with TURN s request for a one-way balancing accounted that is trued-up annually. B. SCE s Cost Recovery Review Proposal Appropriately Provides Opportunities for Commission Oversight and Review. Only TURN seeks post-project-completion, or after-the-fact, reasonableness review of SCE s costs and implementation decisions over the five-year program period for costs under a Commission-authorized cap. In particular, TURN suggests that an after-the-fact review would ensure that ratepayer money was spent in a cost effective and reasonable manner. TURN also D.0-0-0, Ordering Paragraph (OP) ; Section R and Attachment C of the March 0, 00 Settlement Agreement; D.-0-0, OP. ORA Testimony, pp. - to -. TURN Testimony (Jones), p.. TURN Testimony (Jones), pp. -.

27 0 0 asserts that an after-the-fact review would determine which projects were poorly managed. 0 In fact, SCE is not required to base its Proposed Program on a traditional cost-effectiveness analysis and the Proposed Program meets the statutory and regulatory requirements for approval. Further, an after-the-fact review of every decision SCE makes over a five-year period with the goal of determining which sites were poorly managed could result in an arbitrary and capricious denial of recovery of costs that the Commission has already determined are reasonable. When developing program cost and labor estimates, SCE assumed a maximum number of vehicles deployed per site and per charger. SCE has also stated that it will to work with site owners to determine cost-minimizing deployment strategies, like number and location of charging stations deployed, that take into account business operations. In a nascent and rapidly evolving TE market, as both TURN and ORA agree, costs may rise or fall, and to retrospectively judge SCE s implementation over a five-year period, with the benefit of hindsight, would be highly subjective. SCE understands the need for Commission and intervenor oversight of this novel program and suggests that its Proposed Program costs will be adequately reviewed in three ways. First, this proceeding is the time and place to review SCE s Proposed Program costs. The cost section of SCE s testimony contains a complete showing of estimated costs based on the best available data to implement the Proposed Program and, further, intervenors and SCE have discussed and shared many additional details about these cost estimates through discovery. Second, SCE will encourage the annual review of realized installation costs, as well as its progress and setbacks, throughout the five-year program period through its program progress reports. Finally, at the conclusion of each year of its Proposed Program, SCE will present for 0 TURN Testimony (Jones), p.. SCE Amended Testimony, pp. -. TURN Testimony (Jones), p. ; ORA Testimony, p. -. SCE Amended Testimony, pp. -.

28 0 0 review all recorded program costs in its ERRA Review proceeding to ensure that all costs recorded in the TEPBA are properly recorded. If the Commission approves the scope of the Proposed Program, the Commission should approve SCE s request that the actual incurred costs, as long as consistent with the adopted scope of activities and within cost levels that the Commission already found to be reasonable, be deemed reasonable without further after-the-fact reasonableness review. ORA opposes SCE s request to file an additional application or other procedural mechanism to seek recovery of costs over the cap or an after-the-fact review of unapproved activities if the Commission approves SCE s Proposed Program. TURN agrees with ORA and states, to the degree that the company has an annual, two-way balancing account with no hard cap on the final cost which could be the case if the company files for an after-the-fact reasonableness review the company has little incentive to control the cost per site or cost per unit of GHG reduction. TURN recommends that the Commission explicitly state that the revenue requirement authorization is a firm cap on spending for the scope of activities that the Commission authorizes in this proceeding and that there will be no opportunity for recovery of either out-of-scope activities or within-scope activities that exceed the budget. TURN also states that the Commission should leave open the opportunity to scrutinize SCE s recorded spending, regardless of whether actual spending falls at or below the authorized forecast. SCE s proposed Commission review of the recorded operation of the TEPBA in the annual ERRA Review proceeding provides both the Commission and all interested parties the ability to audit the entries to the balancing account to ensure that all recorded costs are within the scope and cost levels that the Commission found to be reasonable in this proceeding. The Commission previously approved this approach of reviewing costs without after-the-fact ORA Testimony, p. - to -. TURN Testimony of Garrick Jones, p.. TURN Testimony of Garrick Jones, p. -.

29 0 0 reasonableness review through SCE s annual ERRA review for both the SmartConnect and Charge Ready programs. SCE requests to include a forecast of TE revenue in rates starting in January of each year of the five-year program, because actual program spend could occur faster or slower than the forecast. SCE opposes TURN s recommendation that any unspent funds in any given year would be unavailable in future years of the five-year program. To clarify, SCE is requesting authorization to spend up to the total program cap within the five-year program period. SCE only intends to spend up to the Commission-approved total program cap if appropriate projects materialize and, further, SCE concedes that the Commission-approved cap would be a firm cap that SCE would not exceed. C. Capitalizing the Rebate Results in Equitable Ratemaking To facilitate TE, SCE is proposing to offer a rebate to customer participants for the cost of charging station infrastructure. In exchange, customer participants agree to own, and maintain in working order, the charging stations for at least five years to ensure the associated benefits accrue to customers. Consistent with cost-of-service ratemaking principles, SCE is proposing to capitalize the costs of the rebates and amortize them over the ten-year useful life of the charging station infrastructure. This treatment ensures that ratepayers who receive the benefits of an asset bear an equitable portion of its costs. TURN and GPI/CEC argue that the rebate should be treated as expense. If adopted, TURN and GPI/CEC s proposal to expense the rebates would violate equitable ratemaking because it would result in a mismatch between the costs and benefits of the charging stations. Treating rebates as a regulatory asset and amortizing them over a ten-year life is consistent with Generally Accepted Accounting Principles (GAAP) 0 D.0-0-0, Ordering Paragraph (OP) ; Section R and Attachment C of the March 0, 00 Settlement Agreement; D.-0-0, OP. Amortization accounting is the process of systematically and rationally allocating the costs of an asset over its useful life. TURN Testimony (Borden), p.. GPI/CEC Testimony, p.. 0 Under ASC 0, a Commission decision in agreement with SCE s proposal to capitalize the rebates can provide reasonable assurance of the existence of an asset. This fact was demonstrated in the (Continued)

30 0 and achieves equitable ratemaking because it allocates their cost over the charging station infrastructure s useful life. TURN argues that there is no sound basis for treating the cost as capital and that capitalization will only increase the cost to ratepayers with no corresponding benefit. This is inaccurate because SCE has provided testimony (reiterated above) describing the basis for capitalizing the costs. As described, customers benefit from capitalization because they are asked to pay only their fair share of the assets costs.. Treatment as Expense in the Charge Ready Proceeding was the Result of Settlement Agreements and Should Not be Considered Precedential GPI/CEC proposes that the rebates be treated as expense, citing D.-0-0, where the Commission adopted the Charge Ready Program proposed settlement. SCE s agreement to expense the rebates as part of settlement in the Charge Ready proceeding does not diminish the merits of capitalizing the rebates and allocating their cost to customers over the useful life of the assets. Since the outcome was based on a settlement, the Decision did not address SCE s position to capitalize the costs of the rebates and it should not be considered as a precedent for this TE filing. The Commission should weigh the merits of SCE s arguments to capitalize the rebates as presented in this application, independent of the settlement agreement approved in D Continued from the previous page Commission s decision to capitalize the cost of beyond the meter infrastructure for Mobile Home Parks in D TURN Testimony (Borden), p.. See D.-0-0.