Electrification of fleets is progressing faster than anticipated in the US, with more states, cities and municipalities rolling out programmes to support the transition to a cleaner future. At the same time, several large fleet operators have announced plans to ramp up their investments in electrification as part of their long-term climate commitments. This, however, requires new strategies and solutions to ensure a smoother transition to electric vehicles (EVs).

Fleet managers face multiple challenges in electrifying their fleets. One of the crucial issues is connecting to a utility’s grid for efficient charging options. Utilities will have a decisive role to play in helping fleet operators go green. They will need to support the deployment of EV charging infrastructure, provide incentives, and upgrade the grid to handle the additional electric load. Utilities have already begun capitalising on the emerging opportunities as more fleet operators explore electrification. 

As part of the virtual conference on Fleet Electrification in the US organised by Global Transmission Report, with support from REGlobal, on March 3-4, 2021, half a dozen US utilities showcased their plans and programmes in the fleet electrification space, across two separate sessions. In this edition, we present the highlights of the two sessions related to ‘Electric Utilities – Opportunity and Role’.

Karen Reif, Vice President, Renewables & Energy Solutions, PSE&G, gave an overview of the clean energy future in New Jersey whereby the state has committed an investment of USD1.03 billion for three years on energy efficiency (approved in September 2020); USD707 million for four years on advanced metering infrastructure (AMI) (January 2021); USD166 million for six years on EVs (January 2021); and USD109 million on energy storage (pending approval).

Notably, the investment committed for EVs relates to smart charging infrastructure including residential smart charging Level 2, mixed use charging and public DC fast charging. The fourth sub-programme, Vehicle Innovation, involving a USD45 million investment in medium and heavy duty vehicles (MHDVs) is held in abeyance pending a stakeholder consultation process. Overall, the EV investments will help New Jersey improve EV penetration and charging infrastructure where it is lagging behind several other states in the US. In fact, the density of public chargers relative to the population of New Jersey is the lowest of the states that participate in the Zero Emission Vehicle (ZEV) programme. The EV programme is expected to result in substantial environmental benefits including 14 million metric tons of CO2 avoided through 2035 and other benefits such as direct clean energy jobs, advancement of the state’s clean energy and EV goals, mitigation of EV market barriers and reduction in range anxiety.

Under the first sub-programme, 40,000 chargers at single-family homes will be installed at an investment of USD80 million. PSE&G will provide funding towards the installation of Level 2 networked EV chargers at residences in the PSE&G territory as well as provide customer incentives to encourage charging during off-peak periods. The mixed-use charging infrastructure involves an investment of USD35 million and will result in the installation of 3,500 chargers across 875 locations and a diverse set of customers such as multi-family, municipalities and retail centres. The third sub-programme involves an investment of USD45 million for the deployment of 1,000 public DC fast chargers across 300 locations on travel corridors. PSE&G will deploy make-ready electrical infrastructure and provide financial incentives towards the cost of Level 2 charger and DC fast charging equipment installation. It will also provide financial incentives to defray electricity costs in the case of DC fast chargers. Make-ready service upgrade refers to the infrastructure from the pole to meter and the infrastructure further up to the charger stub is known as behind the meter.

Figure 1: Utility investment in make-ready infrastructure
Source: Presentation by Karen Reif, Vice President –Renewables & Energy Solutions, PSE&G

Kevin Schwain, Director, Electric Transportation, Xcel Energy, highlighted that the company is one of the first US utilities to take a carbon-free pledge to achieve 80 per cent reduction by 2030 and 100 per cent by 2050. The company’s EV vision will allow everyone in the communities it serves to experience the benefits of electric transportation and improved air quality. It is estimated that there will be 1.5 million EVs on the road in the areas served by Xcel Energy by 2030, replacing gas-powered models. This translates into 20 per cent of all vehicles or a 30-fold increase in EVs. This will result in annual fuel savings of USD1 billion by 2030. This is based on the assumption that an EV will cost USD700 less per year to fuel than a gas-powered car. It will also help reduce 5 million tons of carbon emissions annually by 2030, translating into 3 tons of carbon reduction per vehicle.

Schwain spoke extensively about Excel energy’s offering of utility support for fleets in the form of advisory services to build the business case including factors such as the ascertaining power requirements and identifying the right vehicles to be integrated in the fleet; infrastructure support to reduce capital needs; and energy optimisation to reduce operating expenses.

Christopher Budzynski, Director, Strategy and Business Development, Exelon Utilities, highlighted the similarities and differences between MHDV and light duty vehicle (LDV) electrification. These relate to the impact on grid, customer charging behaviour and the policy/business model. From the grid point of view, MHDV involve significantly higher peak capacity and load requirements due to size and concentration of vehicle fleets (6 to 8 MW of loads); upfront customer engagement, system planning and designs and construction efforts to ensure distribution system readiness; and additional strategic siting considerations of fleet depots to improve public health in overburdened communities. From the customer point of view, sustainability objectives are a primary driver for fleet electrification efforts amongst early adopters; majority of charging is completed through dedicated depot charging behind the customer meter and supplemented with on-route charging; and there is an increasingly predictable charging schedule, thereby yielding more opportunities for grid management services at scale. From the policy and business model perspective, progressive regulatory and market structures that encourage future state grid management services are required; along with a diverse scope of products and services to offer to fleet managers and more defined criteria for business model preferences (make ready vs utility own/operate).

Budzynski spoke about the role of a utility in lowering upfront make-ready and ongoing EV equipment supply (EVSE) costs by designing innovative rate structures and programmes; planning and grid management by incentivising infrastructure investments to support present and future electrification efforts; customer engagement by ensuring understanding of long-term customer needs and developing internal support structures for customers as those needs change.

He announced that Exelon Utilities has received approval for its programmes in Maryland, New Jersey, district of Columbia and Delaware and has some activities underway in Washington DC. The company offers utility solutions for fleets, transit buses and school buses. Under each of these, the utility will make grid investments and offer either a rebate model for the EVSE and/or provide public accessible on-route charging with utility-owned EVSE. For customer engagement, the utility will use fleet assessment tools to ascertain the total cost of ownership, infrastructure requirements and environmental impact besides identifying and supporting acquisition of funding. Reduction in total cost of ownership can be achieved through innovative rate design, rebates/incentives for make-ready work and EVSE, reduction in the upfront cost of vehicles (through the subsidies offered by the state) and utility ownership of battery for grid management services via vehicle-to-grid (V2G).

The issue of standards and interoperability is important for utilities to run programmes for managed charging for the fleet vendors. Here, open access and interoperability are important for the utility to be able to communicate with the equipment and collect relevant data to assist in system planning and also help the customer manage their fleet better from a cost perspective by taking advantage of the rates that are on offer.

Overall, policy objectives must be designed to reduce barriers and create opportunities for medium- and heavy-duty fleet electrification. The role of the utility must be clearly defined in programme development and fleet management, providing a path for the recovery of prudently incurred investment to support fleet electrification. The utility must support customer education and undertake outreach programmes considering the unique operational, reliability and resiliency needs of each customer. The development of the action plan must consider environmental justice impacts, help meet the greenhouse gas (GHG) emission goals and create economic development opportunities for the stakeholders.

Karl Popham, Manager, Electric Vehicles & Emerging Technologies, Austin Energy, highlighted some of the several fleet electrification initiatives being undertaken by the company in Austin. There are currently over 200 EVs in the City of Austin fleet, tracking toward the 330 goal. The City Fleet EV plan is expected to save the city USD3.5 million and 12,000 metric tons of CO2 over 10 years. The city is deploying charging infrastructure at facilities such as new buildings to support the electric fleet.

Another initiative is the Capital Metro Bus Electrification. Cap Metro has collaborated with Austin Energy to develop their North Ops Bus Depot to build a smart charging facility for over 200 electric buses. Cap Metro currently has 12 battery-electric buses with plans to buy 19 additional 40-foot electric buses within the next two years. By collaborating early in the process, Cap Metro was able to future-proof the electric capacity of their facility to expedite expansion while reducing costs. Austin Energy has also developed a fleet and a public charging pilot rate designed to encourage high usage and efficiency while ensuring full cost recovery for Austin Energy.

It has entered into partnerships with local car dealerships and offers an online EV buyer’s guide. Another initiative is the US DOE and Texas grant-funded programme Austin SHINES, which is a virtual power plant that optimises the value stream for solar and storage with a business model developed for grid, commercial and residential applications all under one integrated system and controls a platform called the distributed energy resource optimizer (DERO) that was developed for this project. The increase in EVs as well as battery capacity is the reason that Austin Energy added the V2G component to the programme. COA is working on the Austin Climate Equity Plan and has set a draft goal of achieving electrification of 40 per cent of total vehicle miles travelled (VMT) by 2030 from about 1 per cent VMT today.

Eric Seilo, Senior Manager, Southern California Edison (SCE), spoke about California’s aggressive GHG emissions reduction goals (80 per cent by 2050) and the various Governors’ executive orders related to EVs and EVSE. By 2030, the state aims to reach 5 million LDVs, 250,000 Level 2 chargers and 10,000 DCFC. Further, 100 per cent new LDV sales are to be ZEV by 2035; and 100 per cent of all vehicles are to be ZEV by 2045. In 2019, SCE released the Pathway 2045, which targets electrification of 75 per cent passenger vehicles or 26 million EVs; two thirds of MDVs (900,000); and one third of HDVs (170,000). SCE has itself committed to electrifying over 6,200 fleet vehicles including LDVs, forklift fleets, MDVs and HDVs by 2030. Seilo spoke about SCE’s role in removing four key barriers to electrified transport, namely, availability, affordability, awareness and accessibility. SCE helps in the installation of charging infrastructure, lowering costs of acquiring EVs, increasing customer understanding of EV benefits and ensuring programmes enable equity. 

SCE has run several pilots and priority review projects related to transport electrification that have now turned into larger programmes with the Charge Ready Transport (CRT) programme and the recent preliminary approval of the Charge Ready 2 residential programme, which is a USD442 million make-ready infrastructure deployment programme focused on multi-unit dwellings and workplaces, with a heavy disadvantaged communities focus.

Under the CRT programme, SCE provides the infrastructure to support the installation of EV charging equipment at no cost to the programme participant. This is a unique opportunity for fleet operators who choose to acquire EVs given that the infrastructure required to support the installation of EV charging equipment typically represents a sizable investment. SCE will design, construct and install the necessary infrastructure on both the utility-side and customer-side of the electric meter at no cost. Programme participants are responsible for the selection, purchase and installation of the EV charging equipment.  The EVSE rebate is available for qualifying customers who choose charging equipment from SCE’s approved product list. SCE has designed specific EV rates, which will phase in demand charges over a period of time. In the initial period up to 2023, there will be only energy charges, during the 2024-28 period, demand charges will be gradually phased in and finally after 2029 it will return to the traditional energy plus demand charges model.

Seilo shared that while the infrastructure programmes are all rate-based, the vehicle rebate programmes are funded through the Low Carbon Fuel Standard and are not in rates. According to him, the big challenge and a key initiative on the part of utilities is to understand the gap where vehicles park now and updating the regulatory authorisation steps to get approval for grid expansion in those areas with the expectation of future electrification.  

He cited the benefits of dealership engagement programmes. In Sacramento, the PlugStar dealer engagement programme with Plug In America resulted in 10 per cent more EV sales (and 20 per cent higher BEV sales) and doubled the five-star customer satisfaction ratings compared to non-PlugStar dealers.

Figure 2: Current SCE programmes and future roadmap
Source: Presentation by Eric Seilo, Senior Manager, SCE  

Ryan Wheeler, Clean Transportation, National Grid, highlighted the significance of fleet electrification given that transportation accounted for over 45 per cent of the GHG emissions in the northeast and was a leading cause of air pollution. National Grid is running three fleet electrification programmes in the US across Rhode Island, Massachusetts and New York. Pilot studies are underway in Rhode Island. In Massachusetts, 100 comprehensive studies are available while site and bill analysis is available for all customers in New York. National Grid covers up to 100 per cent of the make-ready charging infrastructure cost in all the three states. For post-purchase services, it is evaluating managed charging programmes and rate options in all states. It is focused on accelerating customer fleet conversions with dedicated resources and support.

In Massachusetts, National Grid has partnered with Highland Electric and Proterra to bring electric school buses to Beverly. The goal is to showcase the bus capabilities in the first year and test V2G in the second year. In New York, the goal is to electrify 25 per cent or 150 of transit buses by 2025 and achieve 30 per cent of MHDV sales by 2030. National Grid will build make-ready infrastructure and perform fleet assessments for heavy-duty public transit and fleets in New York. In January 2021, it launched the National Grid EV Fleet Hub to make available resources for customers to access information about vehicle options, funding resources, programme overview and materials and case studies.