cleaner transportation and alternative fuels

Gasoline and diesel transportation fuels represent a major share of America’s most pernicious air pollution, water-borne toxins, and climate emissions. While we presently have better technological choices for cleaner electricity production than for transportation fuels, there is still significant progress available from more fuel-efficient vehicles, hybrid technologies, and alternate fuels. There is also much future promise in hydrogen fuel-cell vehicle technologies. CEERT has been working to clean up CO2 from cars and trucks, promote smarter transportation and development planning, and help develop an alternate fuel-distribution infrastructure as near-term means to reduce the impacts of fossil-fueled transportation.

Recent Developments:

Advanced Clean Cars Program

CEERT continues to coordinate with state and national NGOs to defend the 2022-2025 national passenger vehicle emissions standards (known in California as the Advanced Clean Cars regulations).  On April 2 the US EPA announced that it was overturning its January 2017 determination under the Obama Administration that the Clean Cars regulations were entirely feasible from both technical and economic perspectives.  The EPA under the Trump Administration has ruled that the current standards “are not appropriate,” do not “comport with reality,” are set too high, and should be revised.  The EPA is therefore withdrawing the January 2017 determination, and will issue an NPRM (Notice of Proposed Rulemaking) with the National Highway Traffic Safety Administration (NHTSA) to seek public comment and further consider what it deems to be appropriate standards for model year 2022-2025 light-duty vehicles.

At the same time, NHTSA overturned its prior 2016 determination made in response to a direction from Congress that the penalties automakers should pay for failing to comply with annual corporate average fuel economy (CAFE) targets (the average fuel mileage the fleet of passenger vehicles sold by each automaker should achieve each year) should be adjusted for inflation.  The 2016 determination would have raised the penalty amount — which has not been adjusted since the 1980s — from $5.50 to $14 per tenth of a mile violation.

Under the Trump Administration, NHTSA’s reasoning for overturning the penalty adjustment is that it would have a “negative economic impact.”  Under the Obama administration NHTSA estimated that inflation adjustment would add $30 million in annual civil penalties for violating automakers, while under the Trump administration the estimate for annual civil penalties is as high as $1 billion.  NHTSA is proposing to keep the civil penalties frozen at $5.50 per tenth of a mile violation, but if it can be convinced that there is a good reason for an increase, the amount should be capped at $10.00 per tenth of a mile violation.  NHTSA is requesting public comment by May 2 as part of the NPRM for its current proposal.

While a final determination on the clean cars regulations is subject to a new, yet-to-be-initiated rulemaking, the rejection of the overwhelming technical and economic evidence already submitted in support of staying the course (if not increasing the targets) for reducing tailpipe emissions, together with NHTSA’s proposing to freeze CAFE penalties at $5.50 per tenth of a mile violation, suggests that the EPA and NHTSA are intent on rolling back a program critical to California and 13 other states and the District of Columbia meeting their air quality and climate goals.  Moreover, any weakening of the standards could end up undermining the global competitiveness of US industry.

Since EPA’s and NHTSA’s determinations and the NHTSA NPRM have just been issued, stakeholders are still weighing responses to go with uniform rejection by the clean-car states and the coalition that supports them.  The Trump administration has clearly created an environment of extreme uncertainty about the regulations and the cars that the automakers must deliver to market, which is to nobody’s advantage.

Electrifying Transportation

CEERT continues to monitor the CPUC’s Alternative-Fueled Vehicles rulemaking (R13-11-007) and the IOUs’ transportation electrification plans pursuant to SB 350, all of which have been consolidated under SDG&E’s A.17-01-020 application, as several CEERT affiliates are active parties in these proceedings.

On March 30 the CPUC issued a Proposed Decision (PD) on utility SRPs (standard review projects, which cost more than $4 million and are scheduled to last more than one year).  In arriving at its PD, the Commission worked with the utilities and active parties to determine whether the proposed SRPs were reasonable and in the ratepayers’ interests; and whether the SRPs’ proposed revenue requirement, cost recovery (including balancing account proposal) standard of review, and rate designs should be approved.  Opening and rebuttal testimony was submitted in July and August by non-utility parties on fast-charging infrastructure and rates; on medium/heavy duty and fleet-charging infrastructure and commercial EV rates; and on residential charging infrastructure and rates.  This was followed by evidentiary hearings September 25 – October 12, and written and reply briefs on November 21 and December 21.

The PD approved four transportation electrification programs and one rate design proposed by the three IOUs, with a total budget of nearly $589 million (and a further $23 million for program evaluation).  The PD authorizes the IOUs to implement the following over approximately five years:

  • $137 million for SDG&E to establish a Residential Charging Program in which up to 60,000 residential customers would get rebates to install Level 2 charging stations at their homes (at least 25% deployed to customers in disadvantaged communities).
  • $22 million for PG&E’s Direct Current Fast Charging MakeReady Program, which would install make-ready infrastructure at about 52 sites that would support approximately 234 fast-charging stations (at least 25% of sites to be in disadvantaged communities, with these sites being eligible to receive a $25,000 rebate for the charging equipment).
  • $207 million for PG&E’s FleetReady Program to support electrification of at least 6,500 medium- or heavy-duty vehicles by installing make-ready infrastructure at a minimum of 700 sites (with a minimum of 25% of the budget in disadvantaged communities).
  • $201 million for SCE’s Medium- and Heavy-Duty Infrastructure Program to support electrification of at least 6,500 medium- or heavy-duty vehicles by installing make-ready infrastructure at a minimum of 700 sites (with a minimum of 40% of the budget in disadvantaged communities).
  • At no incremental costs: SCE’s Commercial Electric Vehicle Rate Design to establish three new time-of-use rates for commercial customers with electric vehicles. For the first five years the rates would not include demand charges, which would be phased in over the next five years.

The electrification of transportation that results from these programs should provide important contributions to improving air quality and achieving the state’s climate goals.  The CPUC is accepting written comments on the PD, which the Commissioners will not consider for approval before May 10.

Low-Carbon Fuel Standard (LCFS)

CEERT continues to participate in advocacy efforts to improve the LCFS and extend it to 2030.  CARB’s draft concept issued in September considered setting a final compliance target of an 18% reduction in the average carbon intensity (CI) of California’s transportation fuel below 2010 levels by 2030.  CARB also scheduled a three-year hiatus in the compliance ramp (at 10% below 2010 levels) for CI during 2020-23.

CEERT and other stakeholders cautioned that implementing a 3-year plateau at the 10% level could remove a market signal and risk disincentivizing the investor community from continuing to support the low-carbon fuels industry during those years, along with complications such as potential loss in innovation, supply disruption, etc.  CEERT also advocated, based on technical research, that CARB increase the compliance target beyond 18% to 20% or more by 2030.

In the complete draft regulatory package released on March 6, CARB removed the 3-year hiatus for 2020-23 and adjusted the compliance ramp for annual reductions in the CI of fuels to have a constant declining slope that reaches a revised endpoint of 20% reductions below 2020 levels by 2030.

The CARB Board will take stakeholder input on the formal rulemaking at an April 27 hearing, and staff will continue to work with stakeholders on the proposed regulatory package through December.

Alternative and Renewable Fuel and Vehicle Technology Program

On January 10 CEC staff released a revised draft of the 2018 – 2019 Investment Plan Update for the Alternative and Renewable Fuel and Vehicle Technology Program.  The plan maintained funding of $20 million each for electric vehicle charging and hydrogen fueling infrastructure for fuel cell cars, with electric and fuel cell vehicle funding also coming from $17.5 million for Advanced Freight technologies and $12.7 million for manufacturing, emerging opportunities and work force training and development.

On January 26 Governor Brown issued an Executive Order that set aggressive targets of placing 5 million zero emissions vehicles (ZEVs) on California’s roads by 2030, along with 200 hydrogen fueling stations and 250,000 electric vehicle charging stations by2025.  The EO contained a $1.25 billion climate investment plan that included immediate additional funding for the CEC’s ARFVTP program.  Consequently, the CEC had to again revise the 2018 Investment Plan to incorporate these additional funds.

A second revised draft of the 2018 – 2019 Investment Plan Update was released on March 5 and reviewed at a March 15 hearing of the ARFVTP Advisory Committee.  Total funding for the 2018-2019 Plan was raised from $97.2 million to $277.5 million, with funding for EV charging infrastructure raised from $20 million to $134.5 million and for hydrogen fueling infrastructure from $20 million to $92 million.

CEERT and other members of the Advisory Committee unanimously approved these funding levels.  In light of the proposed accelerated rate of ZEV and ZEV-infrastructure deployment, CEERT and the Greenlining Institute recommended that a strategic planning process be undertaken on workforce training and development in these areas.  The final version of the Investment Plan will be considered for adoption during the CEC’s spring business meeting.