UCAN's Objections to SDG&E EV Proposal
SDG&E Electric Vehicle Charging Stations Pilot Test
Summary of UCAN’s Objections
- All three major ratepayer protection groups oppose the proposed settlement. UCAN (Utility Consumers Action Network); TURN (The Utility Reform Network); ORA (Office of Ratepayer Advocacy)
- Too Big: SDG&E claims their 5,500 charging stations at 550 sites will make up only 20% of the eventual market for such services in 2025. UCAN is skeptical of this projection. If SDG&E’s chargers were all built today, they would represent 88% of today’s market.
UCAN recommended the CPUC adopt significant changes to SDG&E’s proposal, first that SDG&E’s proposal be reduced by more than 70% (from 550 sites to no more than 150 sites)
UCAN pointed out that SDG&E’s proposal for 10 stations per site was too rigid to accommodate the variety of locations and local EV populations that might support each site.
- Too Long: The pilot is proposed to last until 2037, that’s 22 years. Pilots do not normally last 22 years.
- Too Expensive: The current settlement proposal is a giveaway to SDG&E shareholders. Under CPUC rules, an IOU (Investor Owned Utility) gets to add all approved investments into their rate base, which means they can raise rates to ensure payback as they increase capital investments. So not only are they guaranteed to break even on the initial investment: they get a rate of return on that investment while the majority of ratepayers – who do not and will not own EVs – get to pay for this additional return to investors. Effectively, rates will increase by millions of dollars a year for these charging stations, and you will pay for this pilot through higher rates even if you don’t own an EV.
- SDG&E ownership of the Electric Vehicle Service Equipment (EVSE) is not necessary to test rate structure. Utility ownership of charging equipment has still not been adequately justified in the proposed settlement or the response to comments. SDG&E claims that they need to own the equipment to make sure it is useful for the life of the equipment. But SDG&E could take care of this “used and useful” problem by requiring locations they select for charging equipment to keep the equipment in Good Working Order.
- SDG&E wants to treat electric and gas ratepayers like tax payers and then impose a $100 million dollar tax increase. SDG&E has submitted testimony that suggests that, much like how taxes pay for state policy goals, the Public Utilities Commission can allow a rate increase to help meet the Governor’s policy goals for increased electric vehicle ownership. UCAN pointed out that ratepayers for essential services like electricity are not taxpayers and should not be treated as such.
- Misleading numbers from SDG&E. As UCAN’s expert points out, SDG&E has grossly miscalculated the cost effectiveness of this program by tossing into the calculations all the anticipated costs and revenues associated with expected organic growth in the EV market, i.e., all the growth that will happen with EVs regardless of whether this program is approved.
- Anti-competitive. SDG&E’s pilot may result in an anti-competitive environment for the private market place.
- Outrageous incremental cost per EV placed in service. SDG&E estimates that 3,300 additional EVs will be purchased in SDG&E territory due to greater access to SDG&E’s charging stations. UCAN did the math: SDG&E is asking for almost $103 Million for this “pilot” that will result, according to SDG&E’s own estimate, in an additional 3,300 EVs purchased in SDG&E territory. $103 million divided by 3,300 vehicles yields a cost to the ratepayers of $32,212 for each additional electric vehicle purchased.
- Equipment Obsolescence. Rapidly developing markets, like EV charging stations, undergo technological change rapidly, so it may be that the charging stations installed in this program will be obsolete before they are paid off. If approved, ratepayers will, of course, foot the bill for any obsolete equipment SDG&E purchases.
In addition to the objections noted above, UCAN has provided several other legal, factual and technical reasons why the CPUC should significantly scale back SDG&E’s proposal. Click here to learn more.