The North Carolina Utilities Commission approved a scaled-back version of Duke Energy’s $76 million Electric Transportation Pilot proposal. The Commission signaled its willingness to consider a second pilot proposal after Duke establishes a stakeholder collaborative to address concerns, explore opportunities, and incorporate new Commission criteria.Stan Cross | December 1, 2020
After a twenty-month-long wait, the Southern Alliance for Clean Energy (SACE) celebrates the North Carolina Utility Commission’s (NCUC) approval of Duke Energy’s Electric Transportation Pilot Program. Despite the program being scaled back from its original $76 million request to approximately $26 million in approved investments, this is a significant ruling:
- The approved electric transportation pilot is the largest in the Southeast – both in terms of program scope and ratepayer dollars committed.
- The order signals that North Carolina regulators see value in regulated utilities investing ratepayer dollars in transportation electrification, adding to the list of commissions nationwide that have concluded the same.
- The Commission’s inclusion of well-crafted electric transportation filing criteria is likely to inform and influence other Southeast utility commissions.
Public, Multi-Unit Dwelling Charger and School Bus Program Approved
The Commission acknowledged transportation electrification benefits, stating, “there is general agreement that there are many potential benefits to electric ratepayers and society at large in the transition from gasoline- and diesel-powered vehicles to electric transportation.” It also noted that a lack of charging infrastructure is a barrier to electric vehicle (EV) adoption and that “focused pilot programs can serve the purpose of expanding this charging infrastructure while allowing the utility to collect data on the impact of this new electric usage on its system.” The Commission concluded that there is “good cause” to approve four of Duke’s seven proposed programs.
- Public Level 2 Chargers: As proposed, Duke will install, own, and operate up to 160 Level-2 chargers and collect utilization and other load characteristics to understand potential grid and utility impacts.
- Public Direct Current Fast Chargers (DCFC): Duke will install, own, and operate up to 40 DCFC at 20 locations across its territories.
- Multi-Unit Dwelling (MUD) Chargers: Duke will install up to 80 Level-2 chargers at MUDs to support residential charging for non-homeowners.
- School Bus Program: Duke will install and own the charging equipment, provide funding to offset 30 electric school bus purchases, gather operational data, and explore vehicle-to-grid technology’s technical capabilities.
Residential, Fleet, and Transit Bus Charging Denied
The Commission denied Duke’s proposed residential EV charger rebate, fleet charging, and transit bus programs. It did not provide reasoning for program denial. What can be gleaned from the text is that these three programs’ goals did not align with the Commission’s definition of a ‘pilot project’ and the programs’ costs and benefits did not justify ratepayer investment at this time.
The Very Good, the Lacking, and the Missing
The Very Good:
- The Commission left the door wide open for Duke to propose a second pilot proposal that may “sufficiently scale” programs from “proof of concept” to “proof of value” stages to demonstrate the programs’ grid and ratepayer benefits.
- To inform and help craft a second pilot proposal, Duke is ordered to work with the Public Staff to establish a collaborative stakeholder process within 30-days. SACE intends to participate. This collaborative will provide a forum for a range of stakeholders, including advocates, charging infrastructure companies, and trade associations, to engage with Duke proactively.
- The Commission provided criteria for future electric transportation filings that include much of what SACE and other stakeholders argued was missing from Duke’s pilot filing, such as evaluation, measurement and verification, transparent and routine reporting, program cost/benefit analysis, and innovative rate design. The criteria mark the first Commission guidance we’ve seen in the Southeast and could be seen as a ‘best practice’ by other electric utility commissions.
The medium- and heavy-duty EV markets are forecast to expand rapidly; North Carolina Governor Roy Cooper recently signed the Tarheel State onto the Multi-State Medium and Heavy-Duty Zero Emission Vehicle MOU, and the pandemic is crushing city and transit agency budgets. Therefore it was disappointing to see Duke’s proposed transit program denied and the school bus program reduced. Transit and school bus electrification represent opportunities to significantly improve human health by eliminating tailpipe emissions, addressing climate change by reducing carbon emissions, and saving taxpayer money by reducing fuel and maintenance expenses. However, transit agencies and school districts need support covering the higher capital costs of electric buses and charging infrastructure. As Duke stated in its pilot proposal, utilities are well-positioned to invest in bus electrification and use that investment to manage bus charging and energy storage to benefit local governments, ratepayers, and the grid.
Despite equity and access concerns raised by stakeholders, including SACE and the North Carolina Justice Center, neither Duke’s proposal nor the Commission’s ruling addressed the need or outlined a process to ensure all North Carolinians have equitable access to electric mobility benefits. For example, missing from Duke’s and Commission’s consideration is the need for frontline community engagement and representation and an equitable charger deployment plan that identifies and ensures investment in rural and low-to-moderate income communities. Without inclusive planning and accountability, these communities risk being left behind and burdened with higher-cost, higher-polluting cars while wealthier and more urban communities benefit from lower-cost, cleaner EVs.
As We Advance
Because the Commission directed Duke to convene a collaborative stakeholder process to provide input and feedback on potential future pilot programs, this ruling marks the beginning of utility electric transportation engagement in North Carolina. Stakeholders possess a wealth of knowledge and creativity to leverage alongside Duke’s capabilities and capacity. This collaboration will provide a forum for identifying and debating utility engagement opportunities and addressing market challenges to ensure that Duke’s next electric transportation pilot proposal incorporates Commission criteria and is positioned to accelerate transportation electrification equitably.
As an intervenor in this electric transportation docket, SACE looks forward to participating in the collaborative. We will bring our regional perspective to bear and continue to champion the inclusion of diverse voices, implementation of robust and transparent evaluation, measurement, and verification processes, and development of utility-led programs that ensure EV-ownership access for all North Carolinians.
The Southern Alliance for Clean Energy’s ‘Electrify the South’ campaign advocates for a shift to clean, electric transportation throughout the Southeast. Visit ElectrifytheSouth.org to learn more and connect with us.