Game Winning Medium and Heavy Duty Vehicle Transition

There is little doubt that electric trucks and buses are coming. Industry is driving change with manufacturers investing billions to bring these vehicles to market and hundreds of fleets are putting in orders.

Governments are adopting key policies that aim to accelerate the market and its transition from diesel-fueled engines to zero-emission motors. The allocation of funds in the Infrastructure Investment and Jobs Act, regional and state policies, such as the Advanced Clean Trucks and Advanced Clean Fleets rules, as well as the agreement by nineteen jurisdictions to achieve a hundred percent sales of zero-emission medium- and heavy-duty vehicles, are mobilizing the transition to zero-emission trucks and buses.

To ensure this shift is cost-effective, equitable, and that it maximizes environmental and grid benefits, an all-hands-on-deck approach is needed. Key state agencies, environmental justice and community based organizations, labor, and industry must work collaboratively to achieve a sustainable transition. In addition, the utility, a stakeholder that often flies a bit under the radar, will be an essential part of a sustainable zero-emission vehicle future.

As fleets begin to adopt zero-emission vehicles, their first line of contact will often necessarily be the utility, which is best equipped to help fleets understand and plan to develop their charging infrastructure.

As such, it is vital that utilities, and utility commissions that regulate them, offer programs that deploy and support the charging infrastructure necessary to allow these fleets to operate seamlessly, effectively, and to maximize the benefits of such a transition.

Pamela MacDougall: Commissions should set targets and metrics at the outset of a program to provide guidance and allow utilities to demonstrate clear progress.

These programs are important because they provide a pathway for utilities to ensure that new zero-emission technology and infrastructure investments will prioritize communities most vulnerable to the health impacts caused by climate pollution.

Charging stations — and by extension vehicles — must be deployed in a way that provides cost and environmental benefits to all customers, prioritizes public health, and helps achieve other energy sector transition goals.

Utility participation to set up these stations in a way that aligns with the trajectory and goals in state policies, such as the Advanced Clean Trucks and Advanced Clean Fleet rules, and in the multistate MOU, is key.

To ensure that charging stations are well equipped to meet fleet needs and achieve key targets, utilities and utility commissions should provide successful programs consistent with providing safety, and adequate and reliable service at just and reasonable rates. These programs should incorporate the following:

Targets and Metrics 

Larissa Koehler: Utilities can play an important role in a cost-effective and equitable vehicle expansion.

As a threshold matter, utility commissions should set targets and metrics at the outset of a program to provide guidance and allow utilities to demonstrate clear progress. These metrics or targets should be developed in collaboration with broader industry, communities, and state stakeholders so they consider and integrate priorities and solutions and are in alignment with state targets.

Progress reports should be comprehensive, regular, and publicly available, allowing for robust feedback from key stakeholders, including community based and environmental justice organizations, to ensure accountability and collect information that can help identify infrastructure program gaps and inform course corrections as they move forward.

Targets and metrics should look beyond cost and include broader societal interests. One key deliverable should be equitable deployment of charging stations. For instance, in many cases, charging infrastructure is not present in communities that are most burdened by harmful air pollution. 

So, utility commissions need to direct utilities to install a percentage of charging stations in such communities that support the ability of small businesses and businesses owned by people of color in these locations to make this transition.

Planning and Outreach

To cost-effectively integrate the large additional load from electric vehicles, utilities must perform robust planning, which includes proactive, targeted outreach to fleets to understand their needs and what their future growth trajectory looks like.

The information will help the utility better understand how to meet fleets' needs, as well as facilitate grid planning that maximizes the environmental and system benefits of zero-emission vehicles and mitigates the need for expensive grid infrastructure build out.

Additionally, as utilities are likely to be the first point of contact for facilitating charging as fleets transition, it would be beneficial to have dedicated utility staff to answer questions from businesses — particularly small businesses that may not have the same resources or knowledge base — and provide general education and technical assistance. This way, moving to zero-emission vehicles can happen in a more streamlined and cost-effective way.

Cost and Benefit Evaluation

Currently, many utility commissions decide whether a program passes a cost-benefit test by looking purely at monetary costs. However, commissions should evaluate costs and benefits in a holistic way by using a more comprehensive analytical tool.

For instance, use of societal cost tests has plenty of precedent in the energy efficiency context. They account for the savings inherent in fewer missed work and school days, hospital visits, and would paint a fundamentally different picture than an analytic framework that treats these benefits as having zero value.

Identification and evaluation of these types of benefits should be done in concert with environmental justice and community-based organizations to allow the favorable economics of charging programs to be equitably recognized.

Program Structure 

Zero-emission vehicles, in particular trucks and buses, need not be seen as a burden for utilities. Rather, they are an opportunity to help meet other clean-energy targets, while potentially lowering costs for all ratepayers and increasing power reliability.

Utility programs need to be structured to keep costs down for zero-emission vehicle customers and ratepayers more generally. They need to include incentives and programmatic features that educate users on how to effectively manage charging and better utilize the grid.

For example, pricing can encourage charging when there are more renewables on the grid and less demand to lower costs for all customers and there's a need to harness fuel-cost savings relative to diesel to the extent possible.

Program structure can determine the scalability of utility efforts. If a program has the attributes necessary to demonstrate key benefits and pave the way for a more wide-scale transition and economies of scale, that can bring down costs throughout the market and potentially for customers.

As such, utilities can play an important role in a cost-effective and equitable vehicle expansion. This includes facilitating deployment of charging infrastructure in a more streamlined way by rate-basing infrastructure up to a certain amount on the utility side of the meter.

Additional strategies are targeting incentives for small businesses and businesses operating in low-income and communities of color to bring down the upfront cost of charging infrastructure and deploying technologies that mitigate grid buildout, such as onsite solar and storage.

That is, widening the reach of electric vehicles can help integrate more renewable energy into the grid, if charging is managed. If increased load is integrated in a way that more effectively uses the grid, this can help lower costs for all ratepayers.

Of course, these broad principles are just a starting point — the devil is in the details. Utilities should be looking at what design elements need to be considered to unlock the full value and health and environmental benefits of zero-emission vehicles.