www.nj.gov/bpu

New Jersey Electric Vehicle Infrastructure Ecosystem

2020 Straw Proposal Stakeholder Meeting

Wednesday, June 3, 202010:00 a.m. – 3:30 p.m.

Via webinar

www.nj.gov/bpu

Meeting Guidelines• Submit questions for the discussion portion of each panel via the question box.

Include your name and organization.

• During the discussion portion of each panel, a moderator will call out the name of a person with a question.

• Time permitting remarks can be made at the end of a panel by using the “raise hand” function. Please limit your remarks to 3 minutes.

• All participants will be muted throughout the webinar, except when asking questions or making remarks.

• Everyone is encouraged to participate; we will take as many questions and comments as time permits.

• Listen to and respect other points of view.

www.nj.gov/bpu

Panel 3: How to design and integrate EV charging into the rate structure

• Identifying appropriate residential rate design for customers living in multi-family dwellings.

• Establishing rate design for C&I customers installing EVSE: waiver versus rebate.

• Designing adequate time-of-use rates be for EV customers.

Panelists Mark Warner – Gabel Associates

Elizabeth Stein – Environmental Defense Fund

Adam Benshoff – Edison Energy Institute

Felicia Thomas-Friel - NJ Division of Rate Counsel

Stephanie Green – Rocky Mountain Institute

Carine Dumit – eVGo

Patrick Bean – Tesla

Panel 3: How To Design And Integrate EV Charging Into Utility Rate Structures

June 3, 2020

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Mark WarnerVice-PresidentGabel Associates732-296-0770

New Jersey BPU: EV Stakeholder Meeting

Utility Rate Design And EV Market Development

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• Rate Design Can Create Market Barriers In Key Segments:– Encouraging Off-Peak Residential Charging– Public Fast Charging (impact on electricity costs from demand charges)– Demand Charge Impacts On Key Commercial Segments (especially BTM):

• Workplace (for use by employees)• Fleet chargers• Multi-family chargers

• Utility Rate Design Is One Of The Highest Impact Ways To Encourage And Guide EV Market Development, And Represents A Unique Utility Role

Grid Impact

EV Adoption

• Enables• Pricing• Rules

Rate Design

• When• Where• How

Charging Behavior

• Adoption• Grid Costs

Market Impacts

Utility Rate Design Is An ESSENTIAL ELEMENT Of The EV Charging Ecosystem

Public Fast Charging (DCFC): Challenges

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• Public DCFC Is A Primary Strategy For Increasing Adoption– Customer concerns are really “charge anxiety”

• That Strategy Depends On:– Achieving widespread “geographic density” (goals set in law)– Filling in “charging deserts”, ensuring geographic coverage– Public fast charging investment LEADs vehicle adoption

• These Market Development Drivers Create Structural Economic Barriers:– Low utilization in early years– Private investors focus on profitability, not achieving policy goals

• Utility Rates With Demand Charges Amplify Market Barriers During Initial Periods, Especially In Critical Areas (i.e. charging deserts with lower usage)

Public Fast Charging: Challenges (Continued)

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• EV Drivers Will Typically Be Charged On A “Per-KWHR” Basis

• But Commercial Utility Tariffs Have Two Key Components:– A “Demand Charge” related to peak power (kwr)– A “Volume Charge” related to total consumption (kwhrs)

• That Structure Can Result In A Very High Cost Of Electricity Per KWHR

Reference: Gasoline = 35 cent/kwhr

This Problem Is Especially Difficult For High Power DCFC.

The Extent Of This Problem Can Vary BY LOCATION, and OVER TIME.

Most Severe During The Early Years, When BEV Population Is Low.

Public Fast Charging: Potential Solutions

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• Key Objective: Solving Industry Economics Problem In A Form That Utilities Can Support, Without Disrupting Fundamental Cost Recovery Principles

• Typical Solutions For The “Public Fast Charging Demand Charge Problem”– Specialized EV “public charging tariffs” that eliminate demand charges– Temporary “demand charge holidays” (or “waivers”)– Simple “flat fee” rebates to compensate for demand costs (over a finite period)– Adaptive structures that vary demand charge offset as needed

The “Set Point” Approach– Establishes a fixed “cost of electricity” for eligible locations, fixed period of time– Location interconnected on standard tariff, but receives rebates to achieve set-point– Key design parameters: set point ($/kwhr), eligibility, term of incentive

• Set Point Strategy Advantages– Ensures owner/operator cost certainty (net of incentive)– Incentive is “self-regulating”: sites get exactly the incentive needed at any point in time– Solves economic problem, without disrupting important rate design principles– Highly transparent: amount of incentive clearly known– Policy considerations are clear: what is the right set point?

Residential Charging: Challenges

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• Default Residential Charging Behaviors Can Create New Peak Loading• These Are Substantial Loads, That Could Be Highly Coincident

• If HALF The Cars In NJ All Started Charging At The End Of The Work Day, That Would More Than Double The Existing Peak. That Increases Costs Through:

– More expensive peaking generation– Higher Capacity and Transmission Allocations– Greater grid reinforcement investments that could have been reduced or delayed– These costs potentially impact ALL ratepayers, not just EV drivers

TypicalPJMPeak

Behavior Change Needed:

1) Start Charging Later At Night

AND

2) Spread Aggregate Impact Of Charging Over Full Off-Peak Period

Residential Charging: Potential Solutions

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• Residential Time-Of-Day Tariffs Are A Good First Step – Minimum MUST DO

• BUT, TOU (by itself) Is Not Enough – It Creates A New Peak As Market Grows– Need “charge spreading” in addition to “deferred starts”

• “Managed Charging” Is An Advanced Approach That Leverages Rate Design:– Managed Charging “flattens the curve” of EV impact on the grid, reduces costs– Couples a charger technology with a rate design: NEED BOTH– Depends upon an “intelligent load device” (smart charger) optimized for EVs– Part Of A Smart Grid: Enables “load sensing” and “charge coordination”– Gives the utility good visibility on EV loading, allows granular real-time coordination

• Key Success Criteria For Residential Managed Charging:– Charger incentive should be focused on smart chargers– Charger incentive must be tightly integrated with utility off-peak incentives– Must establish utility linkages for transaction data and charge coordination– Program accomplishes “deferred starts” now, “charging spreading/coordination” later– Incentives should be highly visible for end-consumer to impact charging behavior

Closing Thoughts

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• “Rate Design” For EVs Is More Than Just An Electricity-Delivery Tariff– Design shaped by market development goals, not just “delivery of service”– May include other elements: make-ready, coordination services, etc– May have strong eligibility or “market shaping” factors– May treat different customers differently, including changes over time– Will likely depend upon utility programs, not just a price schedule

• EV Rate Design Is Highly Strategic– EV charging benefits all ratepayers, including distribution cost dilution– EVs deliver significant public health improvements that impact ratepayers– Impacts both EV adoption, cost avoidance, and benefit optimization

• Rate Design Can Best Be Delivered By A Utility• And It Has Large Impacts On Many Aspects Of Charging Ecosystem• Allows For Granular Determination Of “Shared Responsibility”

Rate Design for Buses and Trucks: Preparing to Optimize Uptake

Elizabeth B. Stein

June 3, 2020

Electric Trucks & Buses Are Here Now

Many models are already

available, including for:

• Transit buses

• School buses

• Cargo vans

• Yard trucks

Sales of EVs Poised for Growth

More Models Coming in 12-24 months

Announced production

timelines for:

• Cargo vans

• Box trucks

• Regional freight day cabs

• Refuse vehicles

A public health menace in vulnerable communities

Source: Rutgers School of Public Health, Public

Health and Our Ports: The Road to Clean Air (2018)

Fleet Perspective on Barriers

Source: UPS/GreenBiz

Getting Ready for MHDV electrification

• Distribution Grid Impact Study

• Lay the groundwork for managed/smart charging

– Technical requirements

• Advanced Metering Infrastructure

• Key communications standards, OpenADR

• Billing Systems

– Rate design

Vision for MHDV rate design

•Rapid electrification

•Low societal (including environmental) cost

•High societal (including environmental) benefits

Charging behavior: MHD vs LD

• MHDs have significantly larger batteries– More power in total needed to charge

• Chevy Volt 60kWh

• Bus 300kWh

– Greater opportunity to act as a grid resource/asset• V1G

• V2G

• In use most of the day, so charging window is limited

• More market segments, more diversity:– LDV: 1-2 MHDV: up to 87

How can rates help electrify fleets better, faster?

• (Grid) Cost Containment– Cost-reflective Pricing

– Incentivize charging at lowest cost times

– Use incentives to minimize costs where capacity is constrained

• Keep Bills Manageable (for vehicle owners)– Coincident peak charges can work if understood

– Alternatives to demand charges can provide flexibility

– Customer marketing, education, outreach, and technology

• One size does not fit all.– Different levels of granularity

– More or less protection against volatility

Thank you!

Elizabeth B. Stein

estein@edf.org

Transforming global energy use to create a clean, prosperous, and secure low-carbon future.

EV rate design to meet New Jersey’s climate goals –

perspective from RMI and PG&E

New Jersey BPU Stakeholder Workshop

June 3, 2020Stephanie Greene

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Agenda

• Background and context

• Rate design principles

• Residential charging

• Commercial charging: PG&E, RMI

• Key Takeaways

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Electrification is a central pillar to meeting NJ’s climate goals, and can benefit all ratepayers through increased load

• New Jersey’s energy master plan (EMP): least-cost way to meet state’s climate goals is to electrify the transportation and buildings sectors.

• No new light duty EV sales after 2035. • U.S.-wide, we need 1 in 5 light duty vehicles to be EVs by 2030, ~50 million cars.• Utilities and private sector players working together is critical to make this happen.

New Jersey EMP – https://www.nj.gov/emp/docs/pdf/2020_NJBPU_EMP.pdfRMI EMP overview - https://rmi.org/new-jersey-charts-a-practical-affordable-course-to-a-decarbonized-economyRMI Blog - https://rmi.org/1-in-5-cars-need-to-be-electric-by-2030-what-will-it-take/

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California and PG&E context

• PG&E – one of largest utility EV infrastructure programs in the country: – 7500 Level 2 chargers – $350 M medium and heavy duty (+DCFC) charging infrastructure

Like New Jersey, transportation is ~40% of state’s GHG emissions

Of approved IOU TE infrastructure programs

EVs in the country in PG&E service territory

California goal of 5 Million ZEVs on the roads by 2030

$1B

1 in 5 5 M

EVs in California500k

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Rate Design Principles for EV Charging• Rates should make EVs affordable – less than cost of gasoline

(~$0.29/kWh, or ~$0.09/mile, or less) or diesel.

• Charging should be profitable to be sustainable; demand charges prevent this at low utilization.

• Rates should be simple and customer-friendly.

• Tariffs should be time-varying and charge more for coincident peak demand.

Ways to achieve this include…

• Rates should either eliminate demand charges, or, scale with utilization.

• Base volumetric rates on marginal cost.

• EV chargers should be on dedicated tariffs and on separate meters.

• Tariffs should have low fixed charges.• Cost shifts should be demonstrated, not assumed, esp. when utilization is

low.

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Residential and multi-family-dwelling rates should be as low as possible compared to gasoline

- 80%+ EV charging happens at home

- Gasoline parity: <$0.29/kWh, or ~$0.09/mile – PG&E’s rate is $1.20/gallon equivalent

- TOU to encourage charging behavior that avoids grid upgrades or peak energy use -PG&E’s rate was 11 PM-7 PM.

- Multi-family could meter the chargers separately (using the meter inside the charger) and bill with residential rate.

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2. C&I rates should eliminate demand charges, or if not, then scale them with utilization

• Commercial EV rate - targeted for fleets, DCFC, multi-family, and workplaces and eliminated demand charges

• RMI optimized – scales up demand charges and scales down volumetric rates with utilization.

Rates should help to accelerate electrification through encouraging DCFC as well as electric buses, trucks, fleets, workplace charging.

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PG&E’s commercial EV rate eliminates demand charges while ensuring adequate cost recovery

• No demand charge – Defined a new customer class.• Simple - Rates are stable year-round, sending charging networks and drivers reliable

and appropriate price signals• Appropriate cost recovery – Three-part TOU rate matched to system peaks• Stakeholder feedback and modeling input critical - Allows affordable and profitable

EV operation across a wide variety of load shapes and charging scenarios

$167 per 50 kW connected load

SubscriptionCharge

12¢ kWh

Midnight 9am 2pm 4pm 9 pm+ Energy

Charge“EV-Large S” (> 100 kW) rate

10¢ kWh 33¢ kWh

$21 per 10 kW connected loadCEV-Small

CEV-Large

Note –public slide from PG&E proposed rate, not final decision

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RMI’s Rate Proposal scales demand charges as a function of utilization

• Allows profitable DCFC operation• Fixed monthly charge: $34.40/mo.• Two-tier ToU rate:

On-peak (9 am – 9 pm)Decreases from $0.068 to $0.007Off-peak (9 pm – 9 am) Decreases from $0.022 to $0.002

• Demand charge: Increases from $0.677 to $17.622/kW

RMI DCFC Rate Design Study (Sept 2019) https://rmi.org/insight/dcfc-rate-design-study/

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DCFC Rate Designs Compared

RMI tariff produces the most consistent cost per mile and the cheapest cost at 5% and 10% utilizations

PUBLIC 150 KW DCFC

RMI DCFC Rate Design Study (Sept 2019) https://rmi.org/insight/dcfc-rate-design-study/

Goal: Meet or beat gasoline parity at $0.09/mile.

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General advice to utilities and regulators

• Engage customers and other stakeholders early and incorporate feedback. PG&E’s process:

– Partnered with EPRI to conduct a customer survey – Engaged CALSTART to run a stakeholder engagement process with various fleets– Engaged a wide number of other stakeholders and received feedback

• Model the rate for different use cases – DCFC, MUDs, workplaces, fleets – could consider splitting DCFC from other commercial customers.

• A new customer class – enables true cost causation, lower fixed costs, matching marginal costs

• No demand charge holiday – creates uncertainty for customers and requires guessing when utilization will be higher.

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Key Takeaways

• Electric vehicles (and buildings) are critical to meeting New Jersey’s, and the world’s, climate goals

• Rate design is critical to accelerating electrification and creating a sustainable market

• Public DCFC are critical parts of the EV network.

• For DCFC and fleet customers, need to eliminate demand charges or scale them with utilization

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RMI EV-GRID REPORTS

Electric Vehicles as Distributed Energy Resources (June 2016)

BY GARRETT FITZGERALD, CHRIS NELDER, AND JAMES NEWCOMB

ELECTRIC VEHICLES AS DISTRIBUTED ENERGY RESOURCES

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WAR R O O M

CARBON

BY GARRETT FITZGERALD AND CHRIS NELDER

EVGO FLEET AND TARIFF ANALYSISPHASE 1: CALIFORNIA

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PUBLIC VERSION

EVgo Fleet and Tariff Analysis (March 2017)

From Gas to Grid (October 2017)

DCFC Rate Design Study (Sept 2019)

Seattle City Light TE Strategy (Aug 2019)

Reducing EV Charging Infrastructure Costs (January 2020)

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Transforming global energy use to create a clean, prosperous, and secure low-carbon future.

Thank you!www.rmi.org/our-work/mobility-transformation

sgreene@rmi.org

N E W J E R S E Y E L E C T R I C V E H I C L E S I N F R A S T R U C T U R E E C O S Y S T E M 2 0 2 0 S T R AW P R O P O S A L

B P U T E C H N I C A L C O N F E R E N C E – R AT E D E S I G N P A N E L # 3

0 6 / 0 3 / 2 0 2 0

C A R I N E D U M I T | D I R E C T O R , M A R K E T D E V E L O P M E N T - E A S T

1

2

Agenda

About EVgo

EVgo in New Jersey

DCFC Use Cases

Rate Design Principles

Example Rate Designs that further private sector EVSE investments

Key Takeaways

America’s Largest and Most Reliable Public Fast Charging Network

3

Develop | Finance | Own | OperateFounded in 2010

Over 800 fast charging locations nationwide

We build, own, & operate the nation’s largest

network of public DC fast chargers

98% charger uptime rate

200,000+ customers

100 million Americans live within a 15- minute

drive of an EVgo charger

About EVgo

EVgo in New Jersey

~40 EVgo DC Fast Chargers currently operational across 16 sites in New Jersey

~75% of New Jersey residents live within a 20-minute drive of an EVgo charger

Greatest demand near metro areas

4

Brookdale Service Area – North(Garden State

Parkway, Bloomfield) in partnership with PSE&G

Menlo Park Mall

Fast Chargers Serve MUD Residents

52 – 81 % of apartment dwellers with battery electric vehicles are

relying solely on public charging.

Source: International Council on Clean Transportation, Quantifying the Electric Vehicle Charging Infrastructure Gap Across U.S. Markets

(January 2019)

56/2/2020

Rate Designs at Core of Successful Transportation

Electrification

Xcel Energy new rates for commercial EVs

and fleets reduced demand charges, which were making electric buses 60% more

expensive for RTD to operate than diesel

6

Utilities Across the Country are Introducing Commercial EV RatesUtilities Across the Country are Introducing Commercial EV Rates

7

Commercial EV rates have been introduced or approved in a dozen+ states, including:

CA, WA, NV, AZ, CO, MN, WI, PA, NJ, NY, CT, RI, ME, HI… and more

Commercial EV Rates

EVgo Rate Design Principles

Time-varying rates. TOU pricing is essential to ensure that EV charging meets system needs. Becomes more important as utilities in many states are relying more heavily on renewable generation resources (e.g. wind & solar) whose output also varies by time.

Cost-based rates. Rates optimized for EVs should be cost-based and do not need to be subsidized.

Minimize demand charges and maximize the use of TOU volumetric rates, particularly when utilization of the charging infrastructure is low. This does not create a cost shift if TOU rates are cost-based and represent incremental revenues.

Limit monthly fixed charges, non-coincident demand, or subscription charges.

8

EVgo Rate Design Principles

Provide rate options, including the ability to switch to a standard commercial rate schedule.

Rates can be technology neutral. Many Commissions already have rates in place designed to accommodate similarly “spiky” loads (e.g. agricultural uses). Maintaining DCFC eligibility for “Low Load Factor” or “Pivot Irrigation” rates can be a simple, effective adaptation.

Preserve the existing infrastructure base with universal application of rates. All rates intended to expand charging infrastructure should apply to the installed base as well.

Available to all EV commercial use cases. There are a variety of commercial EV use cases i.e. workplace, public, and fleet charging. New commercial EV rates should be available to all commercial charging customers

9

Exemplar EV friendly ratesUtility Exemplar Rates

Southern California Edison, CA

TOU – EV – 8

- All volumetric TOU rates for first 5 years, with demand charges phased back in years 6-10

- TOU volumetric energy charges increased to recover costs

Eversource, CT

EV Rate Rider Pilot (EVRRP)

- Demand charges of the applicable commercial rates are converted to an equivalent $/kWh

charge for all kWh utilized by the DCFC customer during each billing period

SDG&E, CA

TOU – M (Interim Rate)

- While the EV rate is finalized, sites can temporarily switch onto this rate with a $2.50/kW

demand charge and the 40 kW demand cap waived

Dominion, VAGS – 2 (Non-Demand)

- Low usage sites (<200 kWh per kW) qualify for this non-demand general service rate

Madison Gas & Electric, WI

Low Load Factor Provision

– Commercial customers on rate schedules Cg-4, Cg-2, or Cg-2A; annual electric load factor

<15%. On-Peak Demand Reduction of 50%

DTE Energy, MI

GS – D3

- The 1000 kW demand cap for this non-demand general service rate is waived for DCFCs

through June 1, 2024

Significant Precedent Exists for BPU to Address Rate Design

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Key Takeaways

•Keep it simple, avoid overengineering and creating complex structures.

•Allow for runway in the short and medium term that set all stakeholders on the path to meeting Transportation Electrification objectives.

•Draw from lessons learnt in other states, avoid reinventing the wheel

•Commercial EV rates and technology neutral rates are both possible

•Rates should apply to new and existing charging stations

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Q U E ST I O N S ?

C A R I N E D U M I T, D I R E C TO R O F M A R K E T D E V E LO P M E N T - E A ST

C A R I N E . D U M I T @ E V G O . CO M

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N J E V I N F R AS T R U C T U R E E C O S Y S T E M :H O W T O D E S I G N A N D I N T E G R A T E E V C H A R G I N G I N T O T H E

R A T E S T R U C T U R E

J u n e 3 , 2 0 2 0

O U R M I S S I O N

Accelerate the world’s transition to sustainable energy

T H E T E S L A F A M I L Y

T H E T E S L A F A M I L Y – P A R T 2

T E S L A C H A R G I N G

Supercharging Destination Charging Where You Park

T E S L A C H A R G I N G I N N E W J E R S E Y

Superchargers

25 locations

222 charging stalls

Destination chargers

53 locations

122 charging stalls

7

E V C H A R G I N G A N D D E M A N D C H A R G E S

Ex. Utility Rates:

Fixed charge = $100

Demand charge = $8/kW

Energy charge = 10 c/kWh

DCFC

C O N S I D E R A T I O N S F O R C O M M E R C I A L E V R A T E S

Goals:

• Effective $/kWh on par with

commercial class average

• Send signals about the best

times to charge

• Provide some level of certainty

R E C O M M E N D A T I O N S F O R C O M M E R C I A L E V R A T E S

• Provide rate options.

• Available to all non-residential

EV charging accounts.

• Minimize use of non-coincident

demand charges.

• Utilize time-of-use volumetric

components.

• Avoid short-term incentive rates.

E X A M P L E S O F C O M M E R C I A L E V R A T E S

Restructured Markets

• Eversource CT

• Central Maine Power

Vertically Integrated

• SCE

• PG&E

• Alabama Power

Non-EV Specific Rates

• Dominion VA, GS-2