[The San Diego Union-Tribune] California policymakers are committed to making sure that electric vehicles — and the charging stations and other infrastructure needs associated with them — transform the state’s transportation sector. But it won’t come cheaply.
A review conducted by the San Diego Union-Tribune showed various state agencies have committed $2.46 billion in public funds — some of it already spent and the rest planned over a number of years — for programs aimed at luring drivers out of cars and trucks powered by internal combustion engines and encouraging them into zero- or low-emission vehicles.
And that doesn’t count the $800 million in electric vehicle, or EV, programs that Volkswagen is spending across the state as part of an unprecedented settlement to help resolve the car maker’s emissions scandal. A state entity — the California Air Resources Board — is overseeing how and where the money is spent.
When the VW settlement is taken into account, investments to electrify California’s transportation landscape go well north of $3 billion, thus far.
“For the average person, that’s a big number, when you’re talking about billions,” said Carla Peterman, who recently completed a six-year term as a commissioner at the California Public Utilities Commission. “But when you look at the actual transportation sector and how much money goes annually into infrastructure and fuel, it’s a small amount.”
The two largest portions of the money come from a pair of the most influential agencies in state government — the utilities commission, or CPUC, and the California Air Resources Board, also known as CARB.
The CPUC has set aside $1.048 billion for various EV programs, with a lot of emphasis on constructing charging stations. The money comes from ratepayer fees collected by the three investor-owned utilities the CPUC oversees — San Diego Gas & Electric, Southern California Edison and Pacific Gas & Electric.
The air resources board has budgeted a slightly higher amount — $1.087 billion.
More than half goes to the state’s rebate program that is offered to Californians who buy or lease low- or no-emissions vehicles the state deems eligible, such as battery-electric and plug-in hybrids.
The standard rebate gives Californians $2,500 who buy or lease battery-electric vehicles, $1,500 for plug-in hybrids and $5,000 for hydrogen fuel-cell vehicles. Lower income drivers can get more, while high-income drivers are subject to caps.
Another $423 million of CARB’s efforts go to zero-emission trucks, buses and other vehicles to rid 10,000 tons of noxious nitrogen oxide from California’s air.
The vast majority of the dollars CARB reserves for its EV initiatives comes from money raised via the state’s cap-and-trade program, the trading system put in place to reduce greenhouse gases.
A third state agency — the California Energy Commission — also spends money on EV adoption programs, but to a lesser extent. Using money largely from Department of Motor Vehicles registration fees, the commission will spend $230 million through January 2024 to build refueling stations for hydrogen fuel-cell vehicles.
The CEC expects to spend another $95 million by the end of this year on charging stations and other EV programs, although the commission said the numbers may eventually exceed $200 million.
The EV push didn’t happen on its own.
A combination of legislation, executive branch decisions and directives from regulatory bodies have resulted in a slew of programs aimed at remaking the auto sector.
Former Gov. Jerry Brown originally set a goal of 1.5 million zero-emission vehicles on the state’s roads by 2025 but last year issued an executive order that dramatically increased the number to 5 million by 2030.
And the CPUC’s largest single EV investment — about $780 million over the space of five years — came as a result of 2015’s Senate Bill 350 that calls for 50 percent of electricity in the state to come from renewable energy sources and a 40 percent reduction in greenhouse gas emissions by 2030.
State officials acknowledge the costs and say more programs are still to come. Supporters envision a vast network of charging stations — in communities both big and small as well as wealthy and needy — extending all the way to the state line with Oregon to the north and the Mexican border to the south.
“We are under a directive from the governor’s office to help make the state carbon neutral,” said CARB spokesman Dave Clegern. If the targets are hit, Clegern said by 2050 the state should have a fleet of vehicles that is about 90 percent or more electric.
“There are several reasons why we’re doing this,” Clegern said. “First of all is because we have to. Californians all over the state are seeing the impacts now from climate change and this is a key part of getting greenhouse gas emissions down.”
According to CARB, the transportation sector accounts for the largest single source of greenhouse gas emissions in the state — 41 percent.
California is home to more than 537,000 EVs, far more than any other state. At the same time, though, EVs represent a tiny fraction of the 25 million registered automobiles in California and the state would need to increase EV adoption by nine-fold in the next 11 years to meet the target of 5 million.
CARB officials say the goals can be reached.
“The sales curve has gone up quite steeply,” Clegern said. EV sales in California increased from 96,847 in 2017 to 177,781 in 2018, a jump of 84 percent. “It’s catching on, definitely, and as people see the chargers and realize they’re able to do this, that there’s help out there, they buy the cars. They are good cars. And who wants to go to the gas station?”
The other organization spending big, green bucks in California is a private company that got into big trouble.
Volkswagen, after getting caught cheating in an elaborate scheme to manipulate diesel vehicle emission tests, created a subsidiary called Electrify America that will spend $2 billion over the next 10 years on EV programs across the country.
Of that, $800 million will be spent in California over a 10-year period, with CARB looking over VW’s shoulder to make sure at least 35 percent of the money goes to disadvantaged communities populated by drivers who often cannot afford EVs in the first place, not to mention charging stations in the garages of their homes or apartments.
In November 2017, the U.S. Department of Energy counted more than 15,000 public charging stations in California, the highest in the country. The VW programs will help boost those numbers but Clegern said the project “will not give us more than about 10 percent of what we need.”
Places of emphasis include apartments, condominiums, urban areas and commercial parking lots.
Adrian Moore, vice president of policy at the Los Angeles-based Reason Foundation, which advocates free-market economic policies, criticized the state’s spending on EVs on a number of fronts.
“Yes, I think there’s general support for electric vehicles,” Moore said but described the funding as “opaque” because it comes from sources often folded into other fees, such as the rates utility customers pay each month. That, Moore said, hides costs, which can add up over time.
“I bet if you turned this whole thing into a single bill and said … OK, we’re just going to send you an annual bill for your share of the electric vehicle subsidy, are you happy with this amount? You might get a little more resistance.”
Moore said the state’s programs amount to agencies in Sacramento picking winners.
“They’re deciding which things need to get subsidized at how much (and) not leaving it up to the taxpayers or the consumers,” he said. “And they have a bad track record. They’ve thrown billions at failed enterprises and failed programs.”
The way CARB sees it, though, the state has “waited far too long to make this push,” Clegern said. “If we don’t do it now, it’s not going to happen and we’re going to see very, very big problems for the people of California and for our economy as the result of climate change.”
Peterman, who was the CPUC’s lead commissioner on electric vehicle proceedings, said the transformation can end up being a winner for the state on multiple levels.
“There are benefits for the grid as well as for customers,” she said. “Electric vehicles, when they’re charged in a certain manner, can actually help us with integrating renewable energy and not wasting it. And it leads to more electric sales overall. And that can reduce the cost for every customer, even if you don’t have an electric vehicle, because there’s more customers to spread some of those fixed costs across.”
According to the CEC, California consumer 15.5 billion gallons of gasoline in 2017, the majority going into the tanks of cars, SUVs and pick-up trucks. The CEC estimates California consumers and businesses spend about a little more than $130 million a day on gas.
“For me, it’s a passionate subject because electrifying the transportation sector is a solution to so many of the challenges we face,” Peterman said. “I just think it’s such a win. But it’s complicated and it’s expensive and it’s a long, long road.”
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Electric transportation programs in California
CPUC (programs funded by ratepayers)
- approximately $780 million in “transportation electrification projects” the commission in 2018 directed the state’s three big investor-owned utilities (San Diego Gas & Electric, Southern California Edison and Pacific Gas & Electric) to implement over five years
- $42 million for pilot programs by the three utilities
- $7.3 million that three of California’s smaller investor-owned utilities were told to spend on electrification projects
- $44 million for Edison’s “Charge Ready” pilot program
- $45 million for SDG&E’s “Power Your Drive” program that is expected to wrap up in the next few months. SDG&E anticipates 3,000 chargers will be installed across its service territory.
- $130 million for PG&E to spend on light-duty EV infrastructure programs
TOTAL: $1.0483 billion
California Energy Commission
- $230 million through Jan. 1, 2024 to build refueling stations for hydrogen fuel-cell vehicles. The energy commission has already spent $120 million. The funding comes from fees from vehicle registration, identification plates and smog abatement.
- $95 million is expected to be spent by the commission by the end of 2019 on various EV programs, including charging stations. Eventually, these programs may total as much as $200 million. The funding comes from a portion of DMV registration fees.
TOTAL: $325 million (but could exceed $400 million)
California Air Resources Board
- $423 million for zero-emission trucks, buses and other vehicles to rid 10,000 tons of noxious nitrogen oxide from California’s air. The money will come from proceeds from the state’s cap-and-trade program and, in the case of heavy-duty vehicles, some bond money.
- $621.7 million goes to fund the state’s passenger vehicle rebate program for consumers buying or leasing low- or no-emission vehicles. ($338.4 million came from the state’s cap-and-trade auction proceeds.)
- $42 million for the Clean Cars 4 All Program that provides incentives to lower-income California drivers to scrap their older, high-polluting vehicles and replace them with EVs. It’s paid for with cap-and-trade money.
TOTAL: $1.0867 billion
Volkswagen settlement (funded by the carmaker and overseen by CARB)
- $800 million to be invested in California over a 10-year period for EV infrastructure and public education via Electrify America, a VW subsidiary.
GRAND TOTAL: $2.46 billion* [*When the $800 million from the VW settlement is added, $3.26 billion has been or will be spent in California on various EV programs, including infrastructure.]
Sources: California Public Utilities Commission, California Air Resources Board and the California Energy Commission
The San Diego Union-Tribune
February 3, 2019
