New Jersey BPU OKs $205M EV Spending by PSE&G

Jan 31, 2021 | Rich Heidorn Jr.

The New Jersey BPU approved a settlement trimming PSE&G's proposed electric vehicle infrastructure program to $205 million over six years.

The New Jersey Board of Public Utilities last week approved a settlement trimming Public Service Electric and Gas’ proposed electric vehicle infrastructure program to $205 million over six years (Docket # EO18101111).

PSE&G had proposed spending $364 million on EVs and an additional $179 million on energy storage. Under the settlement, the BPU deferred the storage spending and $45 million in spending to electrify school buses while reducing spending on residential smart charging, Level 2 mixed-use charging and public DC fast charging by 18%. “Cross program investments,” such as information technology, were slashed by almost three-quarters.

More than 20 parties, including the state Ratepayer Advocate, commission staff and EV maker Tesla, signed the stipulation of settlement. Two charging companies and several environmental groups declined to endorse the agreement.

The BPU approved the settlement as “a fair and reasonable resolution” of the matter.

In accordance with the BPU’s September 2020 minimum filing requirements (MFR) order, the board deferred action on PSE&G’s proposed $45 million “vehicle innovation fund” for medium- and heavy-duty vehicles (MHDVs) such as school buses. Provisions relating to utilities’ “last resort” ownership of EV charging stations also will be deferred under the MFR order. (See NJ BPU Outlines ‘Shared Responsibility’ EV Plan.)

Energy Storage

The settlement also excludes PSE&G’s proposed energy storage initiatives, which will be the subject of a separate proceeding authorized by the board in June 2019.

PSE&G proposed spending $13.1 million on “solar smoothing” storage systems to prevent rapid power fluctuations resulting from changes in cloud cover; $38.6 million in “distribution deferral” projects to supplement the operating capacity of substation transformers; $20 million in “outage management” spending to reduce the peak load on substations to reduce the number of mobile transformers; $25.7 million on microgrids for critical facilities; and $11.9 million to reduce peak use at public sector facilities, improve resilience, and reduce transmission and distribution investments.

Storage “as part of the charging ecosystem is best addressed in conjunction with MHDV charging uses,” the board said. “As agreed upon in the stipulation, the proposals advanced by PSE&G concerning an [energy storage] program will appropriately be held in abeyance in this proceeding pending future policy guidance from the board.”

Charging Providers, Environmental Groups Dissatisfied

Charging providers Greenlots and Electrify America declined to support the settlement, with the former complaining that it did not include MHDV initiatives or provisions allowing the utility to own charging stations as a “last resort.”

Royal Dutch Shell’s Greenlots said the PSE&G program is overly reliant on private market investment: “The private market has proven inadequate to electrify New Jersey’s transportation sector at the scale and speed required to adequately support existing rates of EV adoption, let alone meet the state’s statutory commitments in the [Plug-In Electric Vehicle Law] and the more rapid timetables called for in the 80 x 50 Report,” in which the state outlined its plans to reduce greenhouse gas emissions to 80% below 2006 levels by 2050.

Volkswagon’s Electrify America said that demand charges for DC fast chargers are too high. “The proposed rate structure, while addressing many concerns, has not reduced the demand charges to the degree necessary to allow Electrify America to price its product at a reasonable price (for example, gasoline equivalency) without covering ongoing energy expenses for the foreseeable future nearly every time someone charges their vehicle, with no ability to recover investments even with support from a make-ready program,” it said.

Filing jointly, Environment New Jersey, the Environmental Defense Fund, Natural Resources Defense Council and Sierra Club said the settlement fails to ensure the state will meet its goals on vehicle electrification, storage and MHDV charging. They said the board should order a rapid timeline for the proceeding on the utility’s MHDV and storage proposals. They also expressed concern that the stipulation does not include utility investment.

In approving the settlement, the board reiterated its commitment to Gov. Phil Murphy’s goal of having 330,000 EVs in the state by 2025.

“The board finds that the funding levels included in the stipulation are adequate and that the ‘shared responsibility’ model adopted in the MFR order and in the stipulation appropriately prioritizes private investment over utility ownership,” it said. “Ownership and operation of EV charging stations should be driven by the market, and, therefore, EVSE [electric vehicle service equipment] infrastructure companies, site owners and property management companies are the preferred owners and operators of EVSE.”

It noted that the MFR order allows utilities to file a petition to own charging for the “occasional and narrow instances” where it is appropriate.

Rebates

Under the settlement, PSE&G will provide the following rebates to offset installations of charging infrastructure:

Residential

- - up to $1,500 of the make-ready cost (utility meter to charger stub) for up to 40,000 charger stubs (maximum $60 million).
  - up to $5,000 of the make-ready cost (service upgrade) for up to 4,000 locations ($20 million).

Mixed Use Commercial Level 2 (240-volt) chargers

- - up to $7,500 of the make-ready cost (utility meter to charger stub) for up to 3,500 charger stubs ($26.25 million).
  - up to $10,000 of the make-ready costs (service upgrade) for up to 875 locations ($8.75 million).

DCFC Public Charging

- - up to $25,000 of the make-ready cost (utility meter to charger stub) for up to 1,200 charger stubs ($30 million).
  - up to $50,000 of the make-ready cost (service upgrade) per location for up to 300 locations ($15 million).

Incentives are contingent on the charging station being capable of sending and receiving communications via Wi-Fi or cellular network and participants agreeing to share session-level charging data with PSE&G.

PSE&G will collect reimbursement for the spending through the technological investment charge (TIC). The utility’s 2018 proposal would have raised annual bills for a typical residential customer by $1.24. The order did not estimate the cost of the reimbursements under the settlement.

Other Action

In other action, the board approved:

- - the appointment of Commissioner Bob Gordon as hearing officer for Rockland Electric Co.’s proposed $6.7 million EV program (Docket No. EO20110730).
  - a waiver allowing drivers to provide alternative documentation for participation in the Charge Up New Jersey EV incentive program in response to delays in the Motor Vehicle Commission’s processing of drivers’ license renewals as a result of the coronavirus pandemic (Docket No. QO20030262).
  - a memorandum of understanding with Northeast Energy Efficiency Partnerships and the Rutgers Center for Green Building, to “convene and engage” stakeholders in a collaborative to develop a New Jersey Zero Energy Building Roadmap (Docket No. QO21010002).