What Price Too High? NRG Settlement Highlights Industry Tension

 

Despite the need to remain starry-eyed and romantic about the potential of electrified transportation, it is in the end a business that will either succeed or fail based on profitability.  ECOtality‘s involvement in the EV project allowed the consumer to benefit not only through installation of government subsidized infrastructure but also, and most importantly, as a result of Idaho National Labs access to the data about consumer behavior that will better inform the entire industry.  ECOtality’s interest in sharing is strategic.  It wants to use its early market penetration to give it first mover advantage and capture a larger share of charging station business going forward.  Data is the price it has to pay.

ECOtality’s advantage has now been directly challenged in the largest, and most profitable short- and long-term market: California.

NRG, a Texas-based investor owned utility with an aggressive gameplan for its “Freedom Station” charging network, negotiated a settlement with the California Public Utility Commission that could provide it with an exclusive franchise like entry into one of ECOtality’s most profitable territories.  The seed for this network, bizarrely enough, stems from NRG’s acquisition of Dynegy, Inc., a company rooted in the Enron scandal and found liable for over a billion dollars of overcharges to California consumers.  Rather than having the settlement money be returned pro rata to those consumers, the CPUC negotiated an agreement with NRG. Under the agreement, the company will spend $50 million to build 200 DC fast charging stations, $40 million for electrical infrastructure to support 10,000 level 2 charging stations, $5 million for research into EV charging services, and $4 million to develop EV car-sharing programs.  Here are the specifics:

NRG will also install infrastructure for plug-in units, or “make-readies”, at multi-family housing, workplaces, and public interest sites, which will over time support the installation of Level 1 and Level 2 chargers from all charging companies. Further, to meet the CPUC’s goal of ensuring that the electric vehicle charging infrastructure is available to Californians of all income levels, NRG will ensure that mixed-income housing locations are identified, evaluated, and pursued for the make-readies.

Other provisions of the settlement intended to support the roll out of electric vehicles and expand their availability include:

·        In consultation with The Greenlining Institute, NRG will pay an additional $4 million to support low income car-sharing, workforce training, and related programs;

·        NRG is required to spend $5 million to collaborate with researchers and stakeholders on technical demonstration projects that will test new charging and related technologies;

·        NRG will solicit competitive bids for third-party services and equipment, and will provide preferences for employees that are graduates of pre-apprenticeship training programs applicable to the trade or trades to be performed, as well as provide preferences for hiring and retaining employees from the historically disadvantaged or underrepresented classes, including women, minorities, and disabled veterans; and,

·        The fast-charging stations will be compatible with electric vehicles on the market today as well as new models to be introduced beginning next year. Initially they will all have a CHAdeMO charger and a SAE Level II unit; they will be upgraded to accommodate the forthcoming SAE (Combo) DC standard within six months of when chargers using that standard become commercially available.

“The lack of recharging infrastructure and the concern about the range of electric cars have been identified as a barrier for the proliferation of electric vehicles.  This settlement creates that needed infrastructure, which will open the market to many electric vehicle stakeholders,” said CPUC President Michael R. Peevey.  “Devoting one-quarter of the total settlement value to electric vehicle charging infrastructure is a strong, creative idea that will bring California incalculable public benefits.”

Said Commissioner Mark J. Ferron, “The settlement, in combination with the earlier settlement Dynegy reached with the state in 2004, brings closure to our case against Dynegy for its role in the energy crisis of 2000-2001.  In total, Dynegy together with NRG will have returned to the people of California more than $400 million in consideration.  Of this total amount, three-fourths, or $300 million, will be paid in the form of cash to offset the electric bills of customers in California. The remainder, more than $100 million, will be paid by NRG in the form of electric vehicle charging equipment. This will bring cleaner air, local jobs, and a much needed jump-start on what we expect will be an industry of the future.”

“This settlement captures significant value for California under circumstances where contentious and expensive litigation would otherwise have continued for many years and with uncertain results,” said CPUC Commissioner Mike Florio.  “The CPUC is committed to ensuring that the settlement not only makes electric vehicle infrastructure available to Californians of all income levels, but that it also creates job opportunities for California’s diverse communities.”

The fast charging stations will be owned by NRG’s subsidiary eVgo, which already operates a charging network in Texas. The stations will be compatible with the CHAdeMO charging standard, and will add equipment compatible with the new SAE standard when it becomes official. They will be located in retail areas near highways around the state’s four largest metro areas. Users will pay with a credit card, and the company envisions getting between seven and 15 bucks for a charge.

The network will also include 10,000 level 2 charging station locations, or “Make Readies,” as the settlement calls them. NRG will install the necessary wiring for these sites, then turn them over to property owners. NRG’s eVgo will have the exclusive right to install charging stations for 18 months, after which the sites will be open to competitors.

After trying, unsuccessfully, to get the CPUC to re-open its decision and provide public comment, ECOtality has now filed a lawsuit in Federal District Court alleging  that the PUC made an illegal agreement with NRG  that gives it  18 months of exclusive rights to operate charging stations in certain locations.

“This so-called ‘punishment’ is like a restaurant failing a health inspection then being given an exclusive franchise to open and operate every restaurant in the city, subsidized by public funds,” said ECOtality CEO Jonathan Read. “This is an illegal giveaway, negotiated without public input, that will not only impede the development of the electric vehicle market in California and ultimately cost consumers more — but it also denies California rate-payers any refunds from the nearly $1 billion in overcharging that occurred during the energy crisis.”

NRG spokesman, David Knox, maintains that the settlement benefits California’s entire EV industry. “NRG is making a private investment to build an electric vehicle infrastructure that will encourage electric vehicle adoption across the state to benefit the state of California, the people of California and all the businesses that support the electric vehicle industry.”

Is the NRG’s settlement too high a price for California rate payers?  Is ECOtality’s filing a misstep in the direction of enriching its own business  prospects at the expense of vehicle electrification?  Is the CPUC’s apparent disregard for its avowed policy favoring competitive neutrality instead a “creative solution” to jumpstart infrastructure and in the public’s best interests? Stay tuned.

The Journey Down Electric Avenue Begins

Portland State University and PGE co-sponsor a remarkable experiment in electric vehicle charging behavior, called Electric Avenue. Located in Portland at 633 SW Montgomery Street, it displays six level two charging station products (Blink, GE, OPConnect, Shorepower), plus one of the first DC FC installed in the country manufactured by Eaton.  Designated EV only parking spots,warnings are directed to ICE vehicles who nonetheless try to quietly slip into the available spaces with misguided hope that they won’t get ticketed (they will, to the tune of $70.00). Finding parking is such a premium at PSU that many drivers no doubt pull in reflexively.   Opened on August 17th, Electric Avenue featured a flashmob that danced in coordinated t-shirts and steps to the hauntingly obsessive song- “Electric Avenue” by Eddy Grant.

Each day, each week, offers PSU a new opportunity to see how EV users and publicly sited charging stations interact.   Practical issues become apparent.  Does the experimental signage communicate the parking location and restrictions properly? Does the DC FC properly instruct people how to use the connector without breaking the Yazaki Energy Systems manufactured tab.
Do the chargers function appropriately in all types of weather and usage? Do the chargers attract graffiti? Can seven chargers be sequenced on the same street easily?  Is clustering of chargers less expensive and more beneficial to attracting users?  Do people find the location near the streetcar useful?  When does most charging occur and for how long?

Perhaps its most important function is drawing attention to the technology. Students walk past as I connect my LEAF to a charging port.  Some spontaneously taking pictures with their cell phones.  They point. They talk huddled in groups.  They try not to stare.  But there is electricity in air.

Other  electric avenue facts

Fred Meyer Debuts the Fastest Electric Vehicle Charger in the West (and the U.S.)

Today was a momentous day in many respects.  ECOtality sponsored a ceremony at the Hollywood Fred Meyer  in Northeast Portland which is now hosting the first DC fast charging unit installed as part of the EV Project, nationally.  No other state received this distinction.  Considering the scale of the EV Project and the fact that it is rolling out a large number of level two units across the country, this was indeed a historic event.

Among those in attendance were Governor John Kitzhaber, Sen. Jeff Merkeley, Multnomah County Commissioner Chair Jeff Cogen, Fred Meyer’s President Michael Ellis and ECOtality’s President Don Karner.   Pacific Power’s Pat Egan also spoke about the importance of teamwork in getting these units installed within all utility’s service territories.  I got the chance to thank ECOtality’s president for his efforts in helping make Oregon a central figure in the national movement toward vehicle electrification.  We are indebted to private and public figures who see that the future of transportation lies in electrifying vehicles.

The DC fast charger  (Level 3) enables EVs to charge to close to full capacity within the time it takes to fill a normal gas tank; they have been likened to a attaching a firehose of electrons to your car.  These are beefy 440 v (125 amp) chargers using the Chademo charging connection imported from Japan and invented by TEPCO. The unit has a large flat screen which will be used for advertising and providing information to consumers while charging.  The number of Nissan LEAFs on hand was also impressive (I counted twenty) and I witnessed one of the first to plug in at the unit.

Sen Jeff Merkeley is to be congratulated particularly for his national leadership, along with Sen. Lamar Alexander (R-TN) in promoting vehicle electrification.  Oregon ships out $6 billion every year to fossil fuel companies, much of it going offshore.  If we can capture even half of that, we will be keeping money in the local economy and making Oregon a better place to live.

Governor Kitzhaber and Sen. Merkeley were also kind enough to speak of Drive Oregon and reference that forty companies in Oregon are currently operating in the EV space.  Drive Oregon is one of the first non-profits, nationally, to be empowered with the mission of promoting a state-based EV industry .  We plan on promoting economic growth, job creation, and commercialization of new EV-related technologies as our long-term strategy.

The sun shone brightly at Freddie’s throughout the ceremony making us all wince involuntarily.  Perhaps a sign that DC fast chargers are a ray of hope in an otherwise cloudy world of combustion.