BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA. And Related Matters. Application Application

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1 BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA Application of San Diego Gas & Electric Company (U 902E) for Approval of SB 350 Transportation Electrification Proposals. Application (Filed January 20, 2017) And Related Matters. Application Application OPENING BRIEF OF SOUTHERN CALIFORNIA EDISON COMPANY (U 338-E) ON THE PRIORITY REVIEW TRANSPORTATION ELECTRIFICATION PROPOSALS FROM SAN DIEGO GAS & ELECTRIC COMPANY, SOUTHERN CALIFORNIA EDISON COMPANY, AND PACIFIC GAS AND ELECTRIC COMPANY FADIA RAFEEDIE KHOURY ANDREA L. TOZER Dated: June 16, 2017 Attorneys for SOUTHERN CALIFORNIA EDISON COMPANY 2244 Walnut Grove Avenue Post Office Box 800 Rosemead, California Telephone: (626) Facsimile: (626)

2 Table Of Contents Section Page I. INTRODUCTION, BACKGROUND, AND PROCEDURAL HISTORY...1 II. A. B Procedural History... 2 Background... 3 Residential Make-Ready Rebate Pilot... 3 EV Driver Rideshare Reward Pilot... 4 Urban DCFC Clusters Pilot... 5 Electric Transit Bus Make-Ready Program... 5 Port of Long Beach Rubber Tire Gantry Crane Electrification Project... 6 Port of Long Beach ITS Terminal Yard Tractor Project... 7 STATUTORY REQUIREMENTS: DO THE UTILITIES PROPOSED PORTFOLIOS OF PRIORITY REVIEW PROJECTS MEET THE SENATE BILL 350 REQUIREMENTS FOR TRANSPORTATION ELECTRIFICATION AS DETAILED BELOW? IF NOT, WHAT MODIFICATIONS TO THE UTILITIES PROPOSALS ARE NECESSARY?...8 A. Will the portfolios accelerate widespread transportation electrification to reduce dependence on petroleum, improve air quality, and reduce greenhouse gas emissions? Will the portfolios increase access to transportation electrification for disadvantaged communities and provide other benefits to disadvantaged, low- and moderate-income communities, including increased employment opportunities? Will the portfolios enable consumer choice, encourage private investment, avoid stranded costs, and adequately mitigate any unfair competition with nonutility enterprises that might result from the proposed projects/investments? Are the proposed cost recovery mechanisms for the portfolios appropriate? Do the portfolios include adequate performance accountability measures for the projects? i

3 Table Of Contents (Continued) Section Page 5. Are the proposed projects in the interest of ratepayers as defined in Public Utilities Code Section 740.8? Do the projects minimize costs and maximize benefits? a) SCE s Portfolio Provides Direct Ratepayer Benefits (1) (2) (3) (4) SCE s Portfolio will Promote Safer Electric Service SCE s Portfolio Will Encourage Charging in a Way that Improves Grid Reliability SCE s Portfolio Will Support Less Costly Electrical Service SCE s Portfolio Encourages the Use of Alternative Fuels, Reduces GHG Emissions, and Reduces the Health and Environmental Impacts from Air Pollution (5) SCE s Portfolio Can Encourage High-Quality Jobs and Economic Benefits, Including in Disadvantaged Communities b) SCE s Portfolio Minimizes Costs and Maximizes Benefits III. REGULATORY CRITERIA: DO THE UTILITIES PROPOSED PORTFOLIOS OF PRIORITY REVIEW PROJECTS MEET THE CRITERIA SET FORTH IN THE SEPTEMBER 14, 2016 ASSIGNED COMMISSIONER S RULING, AS DETAILED BELOW? IF NOT, WHAT MODIFICATIONS ARE NECESSARY?...22 A. Do the proposed portfolios align with CPUC and utilities core competencies and capabilities and focus on a variety of transportation sectors? Do the proposed projects align with local, regional and state policies, including the CPUC s Integrated Resource Plan, the Distributed Energy Resources (DER) Action Plan, the state s Zero- Emissions Vehicle Action Plan, and the Air Resources Board s Scoping Plan and Mobile Source Strategy? Do the portfolios promote safety? Are the utilities sufficiently leveraging nonutility funding, partnerships, and the results of previous pilots? If not, how could leveraging be increased? ii

4 Table Of Contents (Continued) Section Page 4. Do the proposed projects meet the timeline and budget limitations: one-year projects with a budget of $4 million or less for a total of $20 million for each utility s portfolio? Do the proposals include reasonable data collection and reporting plans for evaluating programs success and future research and program development? If not, what are your recommendations for improving data collection and reporting plans? IV. V. OTHER ISSUES...27 CONCLUSION...27 Appendix A: NDC-SCE-001, Question Appendix B: SCE s Response to NDC-SCE-001, Question Appendix C: SCE s Response to TURN-SCE-002, Question 6... Appendix D: Portions of Recording of May 17, 2017 SB 350 Transportation Electrification Priority Review Workshop... iii

5 Table Of Authorities Section Page Cases Cal. Health and Safety Code Cal. Pub. Util. Code (a)(1)(A), (B), and (D)... 8 Cal. Pub. Util. Code (a)(1)(E) Cal. Pub. Util. Code (a)(2)... 8 Cal. Pub. Util. Code Cal. Pub. Util. Code Statutes Cal. Senate Bill (SB) Cal. Senate Bill (SB) passim CPUC Decisions D CPUC Rulemakings R CPUC Rules of Practice and Procedure Rule CPUC General Orders GO , 21 Other Authorities Governor Brown s Executive Order (EO) B iv

6 SUMMARY OF RECOMMENDATIONS Southern California Edison Company ( SCE ) proposes a portfolio of near-term, priority-review projects aimed at accelerating widespread transportation electrifications. All six of SCE s proposed pilots and projects are noncontroversial, seek new and innovative solutions to accelerate TE adoption, and reflect stakeholder feedback. The estimated total cost of the pilots and projects proposed for priority review is $19.45 million, under the Commission s cumulative cap of $20 million, with each initiative below the ACR s $4 million individual-project cap. Finally, the estimated duration for each initiative is about twelve months. This brief demonstrates that SCE s portfolio of priority-review projects satisfies the applicable statutory requirements and regulatory guidance, and should be approved by the Commission without modification.

7 BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA Application of San Diego Gas & Electric Company (U 902E) for Approval of SB 350 Transportation Electrification Proposals. Application (Filed January 20, 2017) And Related Matters. Application Application OPENING BRIEF OF SOUTHERN CALIFORNIA EDISON COMPANY (U 338-E) ON THE PRIORITY REVIEW TRANSPORTATION ELECTRIFICATION PROPOSALS FROM SAN DIEGO GAS & ELECTRIC COMPANY, SOUTHERN CALIFORNIA EDISON COMPANY, AND PACIFIC GAS AND ELECTRIC COMPANY In accordance with Rule of the California Public Utilities Commission s ( Commission s ) Rules of Practice and Procedure ( Rules ), and the April 13, 2017 Scoping Memo and Ruling of Assigned Commissioner and Administrative Law Judges, Southern California Edison Company ( SCE ) submits this opening brief on the priority-review proposals filed by the investor-owned utilities in A et al. I. INTRODUCTION, BACKGROUND, AND PROCEDURAL HISTORY On January 20, 2017, SCE filed an Application for Approval of its 2017 Transportation Electrification Proposals (the Application ) and served supporting testimony pursuant to Commissioner Carla Peterman s September 14, 2016 Assigned Commissioner Ruling Regarding 1

8 the Filing of Transportation Electrification Applications Pursuant to Senate Bill 350 ( ACR ). 1 In its Application and supporting testimony, SCE describes the Company s vision for transportation electrification ( TE ), which will reduce greenhouse gas ( GHG ) emissions and provide clean air and other benefits. SCE also proposes a portfolio of near-term, priority-review projects and longer-term, standard-review programs aimed at accelerating widespread TE adoption. The ACR defines priority-review projects as being: [N]on-controversial in nature, and limited to no more than $4 million in costs per project with a total funding limit of $20 million for each utility. The priority review projects and investments can be of a short duration (up to one year). 2 All six of SCE s proposed pilots and projects are noncontroversial, seek new and innovative solutions to accelerate TE adoption, and reflect stakeholder feedback. The estimated total cost of the pilots and projects proposed for priority review is $19.45 million, under the Commission s cumulative cap of $20 million, with each initiative below the ACR s $4 million individual-project cap. Finally, the estimated duration for each initiative is about twelve months. This brief demonstrates that SCE s portfolio of priority-review projects satisfies the applicable statutory requirements and regulatory guidance, and should be approved by the Commission without modification. A. Procedural History On March 16, 2017, the Commission held a pre-hearing conference to discuss procedural and scoping issues. On April 13, 2017, the Commission issued a scoping memorandum and ruling (the Ruling ), which consolidates the applications of Pacific Gas and Electric Company ( PG&E ), San Diego Gas & Electric Company ( SDG&E ), and SCE (collectively, the Investor-Owned Utilities or IOUs ) and set forth an expedited schedule to review all priority- 1 Assigned Commissioner s Ruling Regarding the Filing of the Transportation Electrification Applications Pursuant to Senate Bill 350, issued September 14, 2016, in Rulemaking (R.) (hereinafter ACR ). 2 ACR, pp

9 review projects ( PRPs ) with a workshop and briefing schedule. The Commission hosted the PRP workshop in San Francisco on May 17, No evidentiary hearings were held. B. Background For its priority-review projects, SCE proposes three pilots aimed at accelerating lightduty Electric Vehicle ( EV ) adoption, two projects to promote electrification at the Port of Long Beach ( POLB ), and one program to accelerate electric transit bus adoption. 1. Residential Make-Ready Rebate Pilot 3 The Residential Make-Ready Rebate Pilot proposes to provide a rebate to residential customers living in single-family residences or multi-unit dwellings to install EV make-ready charging infrastructure, as explained below. The pilot complements, but does not duplicate, SCE s existing Charge Ready Pilot by targeting residential customers. The makeready rebate will be offered in two tiers: Tier 1 Rebate: Residential customers who submit proof of recent EV purchase or lease and agree to take service on a whole-house time-of-use ( TOU ) rate plan (currently Schedule TOU-D or TOU-D-T) for 24 months will be eligible to receive a rebate to offset (1) the costs of hiring a licensed electrical contractor to inspect their existing electric infrastructure and install a new circuit to charge their new EV, and (2) associated permitting costs. Tier 2 Rebate: Residential customers who submit proof of recent EV purchase or lease and agree to take service on a separately-metered EV rate plan (Schedule TOU-EV-1) for 24 months will be eligible to receive a rebate to offset (1) the costs of hiring a licensed electrical contractor to inspect their 3 Testimony of Southern California Edison Company in Support of its Application of Southern California Edison Company (U 338-E) For Approval of its 2017 Transportation Electrification Proposals ( Exhibit SCE-01 ), pp , 34. Pursuant to Administrative Law Judge Wong s ruling, dated May 24, 2017, parties briefs may cite to discussions during the workshop, responses to data requests, and reports from earlier EV proceedings. SCE assumes that testimony served in this proceeding may likewise be cited in these briefs. SCE hereby requests that its testimony be marked as Exhibit SCE-01 and moved into the record of this proceeding. 3

10 existing electric infrastructure and install a second panel and a new circuit to charge their new EV, and (2) associated permitting costs. SCE will determine the rebate amounts by surveying service providers or through trade group studies. The rebate is intended to cover most standard costs incurred by customers to deploy a new circuit, new panel, or new meter socket. Planning implementation of the pilot requires approximately six months. The pilot is estimated to run for approximately twelve months following the pilot s launch (or until funding has been exhausted, if sooner). The total estimated cost of the pilot is $4 million. The pilot s budget includes the cost of the make-ready rebates, enrollment and rebate processing (including compliance verification), and education and outreach to potential participating customers. 2. EV Driver Rideshare Reward Pilot 4 The EV Driver Rideshare Reward Pilot proposes to provide a monetary reward to rideshare or taxicab drivers who use an EV and exceed a specified number of rides during a given time period. 5 SCE has already engaged with leading rideshare providers to discuss the feasibility of the proposed pilot. SCE plans to work with interested rideshare companies to administer the pilot, determine reward requirements, and develop communications to drivers while ensuring compliance with privacy and confidentiality requirements. Planning implementation will take approximately six months, and the pilot will run for approximately 12 months following its launch or until funding has been exhausted, whichever is sooner. 6 4 Exhibit SCE-01, pp , Actual requirements will be described in the implementation advice letter. 6 Program length depends on the number of EV drivers participating in rideshare programs receiving reward payments. 4

11 The total estimated cost of the Rebate Pilot is $4 million. The pilot s budget includes the cost of rewards, enrollment, and rebate processing (including compliance verification), and education and outreach to potential participating customers. 3. Urban DCFC Clusters Pilot 7 The Urban Direct Current Fast Charge ( DCFC ) Clusters Pilot proposes to deploy and operate five DCFC sites, clustered in urban areas. Each site may include up to five dual-port charging stations, for up to 50 DCFC ports total. SCE intends to install, own, and maintain make-ready infrastructure at participating customer sites. Participating customers will have the opportunity to select DCFC charging stations qualified by SCE and receive a rebate to cover the base cost of charging stations deployed through the pilot, including hardware and installation. Participating customers will be required to provide public access to the charging stations deployed through the pilot, but can determine EV charging fees at their discretion. SCE intends to promote the pilot with potential participating customers, such as cities, public parking lot operators, and EV service providers, and invite them to participate in this effort. Planning and implementation (enrollment and deployment) for the Urban DCFC Clusters Pilot requires approximately 12 months. Data collection will require 12 months at each site with an additional three months of review and reporting. The pilot s total estimated costs are $3.9 million. The pilot s budget includes the cost of the make-ready infrastructure, rebates, and education and outreach to potential participating customers. 4. Electric Transit Bus Make-Ready Program 8 The Electric Transit Bus Make-Ready Program proposes to deploy make-ready infrastructure to serve in-depot and on-route charging equipment for electric commuter buses 7 Exhibit SCE-01, pp. 38, Exhibit SCE-01, pp. 42, 45. 5

12 operating in SCE s service territory. SCE will also provide a rebate to participating customers to cover the cost of the charging equipment and its installation. SCE estimates that the program will take approximately 12 months from launch to enroll eligible customers, determine site feasibility, and deploy charging equipment. SCE estimates that the program will cost $4 million to complete, including deployment costs to serve up to 20 charge ports and customer rebates to offset the costs of qualified charging equipment and installation. 5. Port of Long Beach Rubber Tire Gantry Crane Electrification Project 9 The Rubber Tire Gantry ( RTG ) Crane Project will deploy make-ready infrastructure to serve nine cranes, currently fueled by diesel engines, at SSA Marine Terminal J at the Port of Long Beach. The POLB will secure funding from other sources (e.g., South Coast Air Quality Management District ( SCAQMD ) and the California Energy Commission ( CEC )) for the conversion costs of switching from diesel to electric power. 10 RTG cranes are the second largest source of nitrogen oxides ( NOx ) emissions at the terminal, and the technology could have a significant impact on emissions if adopted by other port operators in California. Traditional RTG cranes have electric lift and propulsion drives, with electric energy generated by on-board diesel reciprocating engines. SCE s proposed project will support a customer pilot for a grid-connected electric conversion system that removes the diesel engine and adds power transformation and electronics fed by a motorized electric cable mechanism. The cable connects to a stationary grid connect mechanism which allows the RTG crane to disconnect from the cable when it has to transfer to the maintenance shop. The grid connect mechanism ties to a high voltage utility connection (4,000 volts). 9 Exhibit SCE-01, pp The SSA Terminal and POLB will fund the electric conversion of the initial nine RTG cranes. Converting each crane to electric power is estimated to cost $600,000, and the total estimated project cost is $5.4 million. 6

13 SCE estimates the project will take approximately 12 months to complete, including design, permitting, and construction for the electric infrastructure. The total estimated costs for this project are $3 million for the deployment of electric infrastructure. 6. Port of Long Beach ITS Terminal Yard Tractor Project 11 The yard tractor project will deploy make-ready infrastructure at the POLB to serve the International Transportation Service ( ITS ) Terminal s fleet of 68 new electric yard tractors for which the ITS Terminal is attempting to secure funding from the SCAQMD. SCE will design, deploy, own, and maintain the electric infrastructure serving the charging stations for the ITS Terminal s electric tractors, including 24 charge points on the west side of Pier G with service from Pier Substation. To accommodate the estimated load for all 24 charging points, SCE needs to upgrade its distribution infrastructure, including additional pad mounted switches, capacitor banks, and transformers. SCE estimates that designing and deploying the infrastructure will require about 12 months. The total estimated costs for this project are $0.5 million for the deployment of the infrastructure described above. Overall, SCE s six proposed projects demonstrate the Company s innovative and expansive approach to the utility s role in advancing transportation electrification. These efforts will help inform future programs to further transform TE markets. These projects meet the requirements of Commission priority review because they are individually under $4 million, cumulatively under $20 million, can be implemented in approximately 12 months or less, and noncontroversial. 11 Exhibit SCE-01, pp

14 II. STATUTORY REQUIREMENTS: DO THE UTILITIES PROPOSED PORTFOLIOS OF PRIORITY REVIEW PROJECTS MEET THE SENATE BILL 350 REQUIREMENTS FOR TRANSPORTATION ELECTRIFICATION AS DETAILED BELOW? IF NOT, WHAT MODIFICATIONS TO THE UTILITIES PROPOSALS ARE NECESSARY? The California Legislature found that [w]idespread transportation electrification requires electrical corporations to increase access to the use of electricity as a transportation fuel. 12 SCE s proposed portfolio of priority-review projects tests several novel ways to increase access to electricity as a transportation fuel. That increased access will facilitate and accelerate transportation electrification, which, the Legislature found, is essential to meet many state goals, including reducing petroleum use, meeting air quality standards, improving public health, and achieving GHG emissions reduction goals. 13 SCE s portfolio meets the statutory requirements set forth in Senate Bill ( SB ) 350 and supports California s ambitious goals. The Commission should approve SCE s proposed portfolio without modification. 14 A. Will the portfolios accelerate widespread transportation electrification to reduce dependence on petroleum, improve air quality, and reduce greenhouse gas emissions? SCE s innovative portfolio of priority-review projects will help achieve the objectives outlined in SB 350, including reducing dependence on petroleum, improving air quality, and reducing GHG emissions. SCE s portfolio covers many important transportation market 12 P.U. Code (a)(1)(E). 13 P.U. Code (a)(1)(A), (B), and (D) (a)(2). 14 This brief only discusses how SCE s proposed portfolio of priority-review projects meets the SB 350 requirements. SCE has no comment on PG&E s or SDG&E s proposed priority-review projects. 8

15 segments 15 and targets critical barriers to widespread adoption of transportation electrification, primarily by proposing to reduce the cost and complexity associated with the deployment of charging infrastructure for participating customers. 16 Addressing these adoption barriers in major market segments is an essential step to accelerating TE and realizing the benefits of reduced dependence on petroleum, improved air quality, and reduced GHG emissions. For example, approval of the POLB projects would accelerate the electrification of rubber tire gantry cranes and yard tractors at the POLB. The projects could act as a catalyst for future, similar port electrification projects. Widespread adoption of electric RTG cranes at all three major ports in California (Oakland, Los Angeles, and Long Beach) could reduce emissions by 708 tons of NOx, 35 tons of particulate matter ( PM ), and 24,780 tons of carbon dioxide ( CO2 ) annually, which would be equivalent to reducing more than five percent of non-road diesel NOx and PM emissions in Los Angeles County. 17 Accelerating TE adoption at POLB improves air quality for all neighboring communities and reduces GHG emissions. SCE s Electric Transit Bus Make-Ready Program will also improve air quality and reduce GHG emissions. A typical diesel-powered commuter bus emits 2,000 g/mile of CO2 or roughly 80 metric tons per year plus 0.4 metric tons of NOx and.0064 metric tons of PM during its lifetime. Each new fully electric bus will reduce GHG and pollutant emissions by 100 percent throughout its lifetime. 18 By providing the make-ready charging infrastructure for transit agencies, SCE will facilitate the adoption of the electric buses that provide these environmental benefits. 15 SCE proposes priority review programs for light-duty vehicles (Residential Make-Ready Rebate Pilot, EV Driver Rideshare Reward Pilot, Urban DCFS Clusters Pilot), transit buses (Electric Transit Bus Make-Ready Program), and non-road equipment (POLB Rubber Tire Gantry Crane Electrification Project, POLB ITS Terminal Yard Tractor Program), described above. 16 Exhibit SCE-01, p Exhibit SCE-01, p Exhibit SCE-01, p

16 Further, SCE s proposed portfolio will support the Commission s Integrated Resource Plan ( IRP ) process. The IRP effort, required by SB 350, 19 is currently unable to specify the scope or size of utility TE programs and related electrical infrastructure necessary to secure the GHG reductions required by SB 32 and SB SCE s portfolio will provide meaningful data and analyses that will inform future IRP processes, leading to the eventual integration of utility applications for transportation electrification programs into the IRP. 21 Creating an IRP that integrates TE will help the state and utilities accelerate the adoption of TE and reduce emissions of GHG and air pollutants. 1. Will the portfolios increase access to transportation electrification for disadvantaged communities and provide other benefits to disadvantaged, low- and moderate-income communities, including increased employment opportunities? SCE s portfolio will promote accessibility to electric vehicle technologies and provide other benefits in disadvantaged, low-, and moderate-income communities. About 45 percent of California s disadvantaged communities, as defined by CalEPA, are located in SCE s service territory. These communities are heavily impacted by the air and noise pollution resulting from medium- and heavy-duty vehicle traffic. Accelerating TE adoption, especially with electrified fleets of shuttles, buses, and non-road port equipment will contribute to improved air quality in disadvantaged communities, as these communities are often located near sites and 19 See SB 350 (amending Pub. Util. Code and adding and ). 20 SB 32 requires a reduction in GHG emissions to 40 percent below 1990 levels by SB 350 recognized that [r]educing emissions of greenhouse gases to 40 percent below 1990 levels by 2030 and to 80 percent below 1990 levels by 2050 will require widespread transportation electrification. SB 350 set an RPS goal of 50 percent, and a goal to double energy efficiency in existing end-uses of electricity and natural gas by SB 350 also provided direction to the Commission with regard to the expansion of transportation electrification programs and investments. 21 SCE-01, pp

17 roadways where such vehicles operate. 22 Both the ACR and state laws, such as SB 1204, recognize the importance of this benefit to disadvantaged communities. 23 Improving air quality and reducing GHG emissions are important goals of SB 350, 24 but they are especially critical for these communities disproportionately affected by polluted transportation corridors and the negative environmental consequences of gasoline- and diesel-powered vehicles. SCE s proposed portfolio also provides employment opportunities. SCE anticipates its portfolio could create many jobs for electricians, engineers, and construction workers. SCE plans to contract for many of the required services, potentially including engineering, design, and construction. SCE participates in the Commission s voluntary supplier diversity program (Commission General Order 156), which sets a goal of procuring 21.5 percent of the company s annual spend on goods and services from women, minority, and disabled veteran business enterprises ( WMDVBEs ). 25 SCE intends to develop specific messaging and leverage geo-targeting to develop awareness about its proposed programs, including the Residential Make-Ready Rebate Pilot, for customers residing in disadvantaged communities. In addition, SCE intends to collaborate with government agencies, such as the California Air Resource Board or the California Pollution Control Financing Authority, as SCE has done for the Charge Ready Pilot Program, to reach customers in disadvantaged communities. 26 SCE may also participate in public events held in disadvantaged communities (e.g., Smog-less Saturday events ) or other activities to promote 22 Exhibit SCE-01, pp ACR at pp. 5, 21-22; see SB 1204 (creating a CARB grant program for zero- and near-zero emission trucks, buses, and non-road vehicles with a mandate to develop implementation guidance that benefits disadvantaged communities). 24 Pub. Util. Code Exhibit SCE-01, p Exhibit SCE-01, p

18 EV adoption. In particular, participating in these events will help increase customer awareness in these communities about the Residential Make-Ready Rebate Pilot. 27 SCE also anticipates that its EV Rideshare Reward Pilot could benefit lowerincome customers. Drivers and vehicles participating in rideshare programs are by definition mobile and subject to the requested destinations of their passengers; accordingly, it is not feasible to limit a reward program payout or benefits to specific geographical locations. However, rideshare drivers skew closer to lower-income demographics, which is one of the socio-economic variables in defining a disadvantaged community. In addition, 64 percent of rideshare drivers are non-white and 75 percent of rideshare drivers are supporting a parent or child at home. 28 This pilot should benefit lower-income, diverse drivers. In addition, this pilot should provide an opportunity for riders from disadvantaged communities to experience and learn about EVs. SCE s Electric Transit Bus Make-Ready Program will benefit disadvantaged communities and lower- and moderate-income customers. Approximately sixteen transit agencies operate in SCE s service territory and could apply to participate in the proposed program. 29 Many of these agencies serve disadvantaged communities. In the Recording of the May 17, 2017 SB 350 Transportation Electrification Priority Review Workshop at 3:23:53, Steven Miller from Golden Gate Transit, also representing the California Transit Association, discussed the impact of utilities as key partners in transportation electrification. Mr. Miller noted that transit agencies are uniquely positioned to focus resources on disadvantaged communities, even in areas which may not appear to be so through CalEPA s CalEnviroScreen tool. Mr. 27 Pursuant to Administrative Law Judge Wong s ruling, dated May 24, 2017, parties briefs may cite to data request responses, and should attach a copy of the data request and the response. NDC- SCE-001, Question 19, attached hereto as Appendix A. 28 SCE s Response to NDC-SCE-001, Question 29, attached hereto as Appendix B. 29 SCE s Response to TURN-SCE-002, Question 6, attached hereto as Appendix C. 12

19 Miller noted that many transit-dependent customers are low- or moderate-income and would benefit directly from such investments and programs, which will help increase transit agency adoption of electric commuter buses. 30 Additionally, both of SCE s proposed projects at the POLB will benefit disadvantaged communities. The communities immediately surrounding the POLB are classified as disadvantaged communities by CalEPA. 31 Improving air quality and reducing GHG emissions through electrification of vehicles and port equipment currently powered by diesel fuel at the POLB will primarily benefit these neighboring communities. 2. Will the portfolios enable consumer choice, encourage private investment, avoid stranded costs, and adequately mitigate any unfair competition with nonutility enterprises that might result from the proposed projects/investments? SCE s proposed portfolio of priority-review programs enables consumer choice, encourages private investment, avoids stranded costs, and mitigates any potential unfair competition with nonutility enterprises. SCE designed its portfolio to maximize customer choice and third-party innovation and participation, while minimizing the possibility that infrastructure will not be utilized. For the infrastructure programs in its proposed portfolio, SCE intends to follow the same market-neutral approach demonstrated in its Charge Ready Pilot Program. This approach consists of deploying electric infrastructure that the utility owns and maintains while participating customers (i.e., site hosts) select, own, operate, and maintain qualified charging equipment. When qualifying charging equipment, SCE plans to rely on adopted efficiency and 30 Pursuant to Administrative Law Judge Wong s ruling, dated May 24, 2017, parties briefs may cite to discussions during the workshop, and should include a transcription of the relevant passages. A transcript of the relevant portions of Mr. Miller s comments is included as Appendix D. 31 Exhibit SCE-01, p

20 safety standards to define its requirements and accept a large number of vendors and charging equipment models, as SCE has done for its Charge Ready Pilot Program. Participating customers, not SCE, ultimately select the qualified charging equipment needed for their operations. 32 This approach allows customers to select equipment that works best for their charging needs, and encourages third-party market participants to provide a variety of established and innovative technologies to meet customer demand. SCE will not compete with third-party market participants to manufacture, sell, own, maintain, or operate the charging equipment. SCE s portfolio will avoid long-term stranded assets by requiring customers to utilize and maintain charging equipment deployed through the programs. In addition, SCE will not break ground at any sites until participating customers have demonstrated to SCE that they have placed a firm order for charging equipment acceptable to SCE. SCE s portfolio also limits the risk of technology obsolescence by deploying make-ready infrastructure that can support a variety of current or future charging technologies Are the proposed cost recovery mechanisms for the portfolios appropriate? SCE s proposed balancing account to record and recover portfolio costs for the priority-review projects is an appropriate mechanism for cost recovery. SCE proposes that the revenue requirement associated with actual portfolio costs would be recorded to the Transportation Electrification Portfolio Balancing Account ( TEPBA ), transferred to the Base Revenue Requirement Balancing Account ( BRBBA ) on an annual basis, and reviewed as part of SCE s annual ERRA Review proceeding. SCE proposes to continue recording the revenue requirement associated with actual portfolio costs in the TEPBA until any TEPBA-related costs are included in a future general rate case ( GRC ) Exhibit SCE-01, p Exhibit SCE-01, p Exhibit SCE-01, p

21 Should the Commission approve SCE s six proposed priority-review projects, SCE requests that the actual incurred costs be deemed reasonable, as long as they are consistent with the adopted scope of activities and within cost levels adopted by the Commission. If actual costs exceed the forecast, or if the actual scope of activities changes from what the Commission has approved, SCE would file an application or follow other appropriate regulatory procedural mechanisms to request approval of the activities and confirm recovery of the additional costs through a traditional after-the-fact reasonableness review. Review of the TEPBA in SCE s annual ERRA Review proceeding will ensure that all entries to the balancing account are stated correctly and are consistent and compliant with Commission decision(s). Commission review should be limited to ensuring all recorded costs are associated with the activities as defined and within the cost levels approved by the Commission in this proceeding. 35 The Commission approved the same cost recovery mechanism for SCE s Charge Ready Pilot Program in D , Ordering Paragraph Do the portfolios include adequate performance accountability measures for the projects? SCE s portfolio contains measurable monitoring and evaluation criteria to track the progress of the proposed projects and investments in order to ensure that they are timely contributing to the adoption of TE. 36 Each proposed program in SCE s portfolio contains the following elements: objective, scope, cost, estimated duration, and anticipated benefits. These elements provide the foundation for measurable monitoring and evaluation criteria. In addition, SCE also proposes to report on a number of metrics related to implementation and execution of the portfolio Exhibit SCE-01, pp ACR, p Exhibit SCE-01, p

22 More information is needed to inform a variety of transportation issues (future areas for utility programs, customer acceptance of vehicle-grid integration, etc.). For SCE s larger portfolio (including both the priority programs described above, as well as the programs currently undergoing standard review), SCE proposes to prepare annual reports to provide status updates on portfolio implementation to the Commission and interested stakeholders. The annual reports will provide a high-level summary for each initiative, the amount of funds expended to date, and the status of each pilot, project, and program. In addition, SCE also proposes to provide a close-out report on every project and program completed during the previous year. Each such report will provide a comprehensive description of the completed initiative, including findings, lessons learned, and metrics. 38 The proposed measures are adequate to evaluate performance of the proposed initiatives, in particular in relation to achieving the objectives stated for each initiative in SCE s proposed portfolio. 5. Are the proposed projects in the interest of ratepayers as defined in Public Utilities Code Section 740.8? Do the projects minimize costs and maximize benefits? a) SCE s Portfolio Provides Direct Ratepayer Benefits SB 350 modified Public Utilities Code to require demonstration of both of the following types of ratepayer benefits: Safer, more reliable, or less costly gas or electrical service, consistent with 451, including electrical service that is safer, more reliable, or less costly due to either improved use of the electric system or improved integration of renewable energy generation; and Any one of the following: o Improvement in energy efficiency of travel. 38 Exhibit SCE-01, p

23 o Reduction of health and environmental impacts from air pollution o Reduction of greenhouse gas emissions related to electricity and natural gas production and use. o Increased use of alternative fuels. o Creating high-quality jobs or other economic benefits, including in disadvantaged communities identified pursuant to of the Health and Safety Code. 39 SCE s portfolio meets these requirements for both types of ratepayer benefits identified in The proposed programs contribute to safer, more reliable, or less costly gas or electrical service through either improved use of the electric system or improved integration of renewable energy generation. 40 Transportation electrification benefits all customers by spreading fixed costs across incremental load, putting downward pressure on electricity rates, improving system utilization, and integrating renewable energy by encouraging EV customers to charge their vehicles when renewable energy is more abundant and the load is less costly to serve. 41 The proposed portfolio supports TE adoption and will help displace petroleum-based usage with clean electricity, resulting in environmental and societal benefits consistent with Transportation electrification represents the largest opportunity to reduce GHG emissions in California. 42 Transportation electrification can also reduce criteria pollutants (e.g., NOx, PM) and improve air quality, creating public health and environmental benefits Pub. Util. Code Exhibit SCE-01, p Exhibit SCE-01, pp Exhibit SCE-01, pp Exhibit SCE-01, pp

24 Specific examples of these benefits are described below. (1) SCE s Portfolio will Promote Safer Electric Service SCE s Residential Make-Ready Rebate Pilot improves safety by requiring participating customers to use the services of a licensed electrical contractor and install a new circuit. This allows EV owners to plug their vehicles into an existing outlet following a professional inspection, which improves the safety of EV charging. 44 The Electric Transit Bus Make-Ready Program will also ensure system safety, as SCE will work closely with participating transit agencies to site, size, and deploy electric infrastructure in accordance with SCE s standards and applicable building and electric codes, using licensed contractors. 45 (2) SCE s Portfolio Will Encourage Charging in a Way that Improves Grid Reliability SCE s Residential Make-Ready Rebate Pilot supports grid reliability. Through the pilot, SCE will identify new EV charging locations for participating customers, allowing SCE to conduct system checks and grid reinforcements. Participating customers must take service on a TOU rate, which incentivizes customers to charge their vehicles at off-peak periods, when grid impacts are limited. 46 Similarly, the Urban DCFC Clusters Pilot will require participating customers to take service on a TOU rate and participate in a demand response program, encouraging charging at times that will minimize grid impacts, supporting more reliable electrical service Exhibit SCE-01, p Exhibit SCE-01, p Exhibit SCE-01, p Exhibit SCE-01, p

25 (3) SCE s Portfolio Will Support Less Costly Electrical Service As discussed above, increasing transportation electrification will put downward pressure on rates, particularly when customers charge at times that are less costly to serve. 48 All customers participating in any of SCE s proposed programs will be required to take service on a TOU rate, which encourages charging at times of the day that are less costly to serve and minimize grid impacts. 49 The Urban DCFC Clusters Pilot also requires customers to participate in a demand response program, which will send additional price signals to encourage charging in a way that minimizes grid impacts and associated costs. 50 (4) SCE s Portfolio Encourages the Use of Alternative Fuels, Reduces GHG Emissions, and Reduces the Health and Environmental Impacts from Air Pollution SCE s portfolio supports the adoption and acceleration of TE. When participating customers adopt electric vehicles, they switch from diesel and gasoline to cleaner electric fuel. Increasing the use of clean electricity as an alternative fuel will reduce GHG emissions and air pollution. 51 SCE s portfolio will reduce the health and environmental impacts from air pollution, which are especially severe in the only two basins in the entire country that have a severe non-attainment status for ozone. Both of those basins are within SCE s service territory. 52 Accelerating TE adoption improves air quality and reduces GHG emissions and health and environmental impacts associated with air pollution. 53 This is 48 Exhibit SCE-01, pp See priority-review project descriptions and eligibility criteria, Exhibit SCE-01, pp Exhibit SCE-01, p Exhibit SCE-01, pp Exhibit SCE-01, pp Id. 19

26 particularly important for neighboring communities that will benefit from TE at the POLB. These communities are primarily disadvantaged communities as defined by CalEPA. 54 In particular, the POLB projects accelerate electrification of a key transportation segment in SCE s territory. The ACR recognizes that ports are a concentrated source of emissions that could be well served with targeted programs. 55 In addition to the immediate environmental benefits from the proposed POLB projects, these projects could serve as demonstrations to encourage similar electrification at all three major ports in California, compounding the benefits of the projects across the state. SCE s other proposed programs also encourage electrification or increased electric vehicle miles traveled. For example, SCE s EV Rideshare Reward Pilot promotes the use of EVs in rideshare services. This increases electric miles traveled and provides an opportunity for riders to experience and learn about EVs. The pilot may incentivize customers to purchase, lease, or rent new and used EVs, or mobilize already-owned EVs to participate in the rideshare economy. Any gasoline-fueled trips that are replaced with zeroemission miles will reduce air pollutants and GHG emissions, creating associated environmental and health benefits. 56 Similarly, SCE s Electric Transit Bus Make-Ready Program will provide air pollution and GHG reductions, as each electric bus reduces pollutants, GHG, and dependence on gasoline. 57 SCE s Urban DCFC Clusters Pilot could help residential customers without access to overnight off-street parking or home charging adopt an EV and quickly charge it near their homes. Lack of overnight or home charging is especially problematic for customers 54 Exhibit SCE-01, p ACR at Exhibit SCE-01, pp Exhibit SCE-01, p

27 in multi-unit dwellings, who could benefit from this pilot. DCFC located in densely-populated areas away from highway corridors could also prove useful for EV drivers participating in the rideshare pilot. 58 (5) SCE s Portfolio Can Encourage High-Quality Jobs and Economic Benefits, Including in Disadvantaged Communities As discussed above, SCE s proposed portfolio provides employment opportunities. SCE anticipates its portfolio could potentially create many jobs for electricians, engineers, and construction workers. 59 SCE plans to contract for many of the required services, potentially including engineering, design, and construction. SCE participates in the Commission s voluntary supplier diversity program, 60 which sets a goal of procuring 21.5 percent of the company s annual spend on goods and services from WMDVBEs. 61 These job benefits inure especially in low-income and disadvantaged communities. 62 These communities are burdened not only by increased air pollution, but also by poverty, unemployment, lack of educational attainment, linguistic isolation, and low infant birth rates. 63 SCE s proposed portfolio encourages jobs and economic benefits for these communities, as well as the environmental benefits discussed above. b) SCE s Portfolio Minimizes Costs and Maximizes Benefits SCE designed its proposed portfolio to minimize costs and maximize benefits. For example, SCE proposes to source relevant products and services through a competitive request for proposal (RFP) process to select vendors and contractors. When 58 Exhibit SCE-01, pp , Exhibit SCE-01, p Commission General Order Exhibit SCE-01, p Exhibit SCE-01, p. 53, fn, Exhibit SCE-01, p

28 providing a rebate on charging equipment in any of the proposed pilots and programs, SCE will follow the base cost methodology developed for the Charge Ready Pilot to minimize costs while meeting the needs of participating customers. 64 The proposed portfolio will maximize benefits of TE by requiring that customers participating in the proposed programs take service on a TOU rate plan, which incentivizes charging in a manner consistent with grid conditions. 65 III. REGULATORY CRITERIA: DO THE UTILITIES PROPOSED PORTFOLIOS OF PRIORITY REVIEW PROJECTS MEET THE CRITERIA SET FORTH IN THE SEPTEMBER 14, 2016 ASSIGNED COMMISSIONER S RULING, AS DETAILED BELOW? IF NOT, WHAT MODIFICATIONS ARE NECESSARY? The ACR set forth guidance that SCE used to design its portfolio of priority-review projects. The portfolio meets the ACR s criteria, as further described below. 66 A. Do the proposed portfolios align with CPUC and utilities core competencies and capabilities and focus on a variety of transportation sectors? SCE s portfolio focuses on SCE s core competencies safely delivering reliable, affordable, and clean electricity to our customers and managing effective customer programs. For the programs requiring construction, SCE will work closely with customers, creating safe, cost-effective interconnection with the distribution grid, testing technologies and new grid strategies. 67 SCE s market-neutral approach enables third-party businesses throughout the TE 64 Exhibit SCE-01, p Exhibit SCE-01, p This brief only discusses how SCE s proposed portfolio of priority-review projects meets the regulatory criteria set forth in the ACR. SCE has no comment on PG&E s or SDG&E s proposed priority-review projects. 67 Exhibit SCE-01, p

29 ecosystem to focus on their respective core competencies, including providing TE charging equipment and services, communications technology, customer applications and networks to support vehicle-grid integration. 68 SCE s portfolio focuses on a variety of transportation sectors. SCE proposes priorityreview programs for light-duty vehicles (Residential Make-Ready Rebate Pilot, EV Driver Rideshare Reward Pilot, Urban DCFS Clusters Pilot), transit buses (Electric Transit Bus Make- Ready Program), and non-road equipment (POLB Rubber Tire Gantry Crane Electrification Project, POLB ITS Terminal Yard Tractor Program), described above. 1. Do the proposed projects align with local, regional and state policies, including the CPUC s Integrated Resource Plan, the Distributed Energy Resources (DER) Action Plan, the state s Zero-Emissions Vehicle Action Plan, and the Air Resources Board s Scoping Plan and Mobile Source Strategy? SCE s portfolio aligns with and supports local, regional, and broader state policies for reducing petroleum use, air pollutants, and GHG emissions because transportation electrification is necessary to achieve these requirements and goals. Examples of the major policies and electrification initiatives that SCE s TE portfolio supports include: Executive Order B , 69 which calls for an 80 percent reduction in GHG emissions from the transportation sector by 2050, infrastructure in place to support one million zero-emission vehicles by 2020, 1.5 million zero-emission vehicles on California roads by 2025, and implementation of an Interagency 68 Id. 69 Exhibit SCE-01, p

30 Zero-Emission Vehicle ( ZEV ) Action Plan 70 (updated in 2016) for agencies such as the CPUC, California Air Resources Board ( CARB ), and the CEC, California s efforts to meet National Ambient Air Quality Standard deadlines and the California Clean Air Act, 71 The State Alternative Fuels Plan adopted by the CEC and CARB, which sets a goal of increasing non-petroleum fuel to 20 percent of on-road demand by 2020 and 30 percent in 2030, adopted pursuant to AB 1007, 72 SB 1274 California Charge Ahead Initiative, which increases customer access to EVs by creating vehicle rebates and financing for low- and moderate-income consumers, 73 and SB 1204 CA Clean Truck, Bus, and Off- Road Vehicle and Equipment Technology Program, which equips mediumand heavy-duty vehicles with clean technologies, 74 and California s Sustainable Freight Strategy, which establishes clear targets to improve freight efficiency, transition to zero-emission technologies and increase the competitiveness of California s freight system, developed pursuant to Governor Brown s Executive Order B To ensure alignment and support, SCE actively sought feedback from public agencies (federal, state, regional, and local), as well as stakeholders from the private and non-profit sectors. On December 9, 2016, SCE invited over Id. 71 Id. 72 Id. 73 Exhibit SCE-01, pp Id. at Id. 24