New electricity rate will make truck and bus charging cheaper, cleaner in California

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New electricity rate will make truck and bus charging cheaper, cleaner in California

State regulators have just approved a first-of-its-kind charging rate for electric trucks and buses in Northern California that will make it more affordable for fleet operators to switch from diesel to electric.

This new “dynamic” rate changes on an hourly basis, providing more options for fleet operators to charge their vehicles when electricity is cheap (eg when the grid is underutilized or when there is plenty of clean electricity). In 2019, state regulators approved Pacific Gas and Electric Company to offer the time consumption of a commercial electric vehicle; regulators also instructed the tool to request a more dynamic pricing option, which is what was just approved. PG&E offers a menu of options tracks with EDF’s recent recommendation that more options – to accommodate many different operational utility cases – are needed to make the electrification of commercial vehicles as affordable and clean as possible.

The advantage of a dynamic rate is that it can free up more cost savings for truck and bus operators. The more they can save on their fuel costs, the lower their total cost of ownership, which in turn will make it easier to convert from an old dirty vehicle to a cleaner solution.

This new price is now available to commercial electric car customers in the PG&E service area that covers Northern and Central California.
New rules such as the Advanced Clean Trucks rule and Governor Newsom’s executive order requiring all new vehicles to have zero emissions over the next 15 years will greatly increase the need for flexible charging options across the country.

New electricity tariffs will make charging trucks and buses cheaper and cleaner in California Click to tweet

There are many different types of commercial electric cars, from small vans to school buses. Unfortunately, there is no shortage of dirty trucks and buses running in disadvantaged communities in PG & E’s service area.

The figure above shows class 2-8 vehicles in PG & E’s service area in disadvantaged communities.

The California Public Utilities Commission identifies several key fleet customer segments and requires PG&E to implement various marketing, training and outreach strategies, including prioritizing rollout in disadvantaged communities and other vulnerable populations.

Commercial vehicles do not run uniformly throughout the state; there are transit corridors and department stores that create hotspots for pollution. California regulators want to use these outreach strategies to prioritize certain areas that will see an overall impact on improving local air quality and other related health benefits. This newly approved dynamic speed can make charging a commercial electric vehicle more economical to switch from diesel, and concentrating marketing, training and deployment in these areas will help ease this huge impact.

While this new tariff gives customers savings, it also sends them a price signal to charge at times when the state has excess clean electricity – a dynamic rate is more detailed than a useful life rate and reflects better grid conditions. The price to charge will be lower when there is excess renewable energy on the system and more expensive when there are fewer. Given the way the California grid is designed, these dynamic rates will help clean renewable energy displace dirty power and further reduce emissions associated with the operation of these vehicles.

Last December, state regulators approved a dedicated rate for the commercial life of commercial electric vehicles for customers in the San Diego Gas & Electric service area. CPUC also instructed this tool to request a “dynamic” rate for its commercial electric car customers, which will happen later this year. Tools in other states may also want to follow this model by offering a combination of dedicated pricing for commercial electric vehicles (both time consuming and dynamic) to help speed up the introduction of electric trucks and buses.
Ultimately, the goal is to make the transition from diesel to electric as affordable as possible for fleet operators in their business operations.

Larissa Koehler and Elizabeth B. Stein contributed to this post

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