San Diego Union-Tribune (Sunday)
$25 MILLION OVER BUDGET
California Public Utilities Commission calls for independent audit of San Diego Gas & Electric
Commission calls for audit of San Diego Gas & Electric over electric vehicle charging program.
ASan Diego Gas & Electric pilot program that installed more than 3,000 electric vehicle charging stations around the region ran $25 million over budget and the California Public Utilities Commission says before it approves plans to start a second phase of the program, SDG&E must pay for an audit to look into the reasons why.
Officials with the utility do not dispute the figure, saying the overruns stemmed from the fact the program — called Power Your Drive — was a brand new one.
“We have nothing to hide,” said Estela de Llanos, SDG&E’S vice president of Clean Transportation, Sustainability and chief environmental officer. “We have been transparent through the process.”
De Llanos said SDG&E has not sought to recoup the $25 million on the shoulders of ratepayers — so far. “And if we do seek recovery of those costs,” she said, “We expect the (public utilities commission) to scrutinize that request. And any examination of that would be open and transparent. We’re not concerned with showing that or having it reviewed.”
The overruns come as the utility looks to have the commission extend the Power Your Drive program so SDG&E can build more charging stations.
In a proposed decision written last month by a CPUC administrative law judge, before receiving the OK to proceed, SDG&E must hire an independent consultant to conduct an audit to identify the reasons for the overruns and “help ensure the ratepayer investment is not mismanaged for a second time.”
SDG&E would pay for the audit through shareholder, not ratepayer, funds — a stipulation de Llanos said the utility accepts.
Background
Launched in 2016, the Power Your Drive pilot program was part of a larger effort by California policymakers to promote the transition from internal combustion cars and trucks to electric vehicles, or EVS.
“We felt (SDG&E) should have stopped when they hit the authorized budget (of $45 million) and let the commission know about the big overruns before continuing to build more sites.”
Elise Torres
staff attorney for The Utility Reform Network, a consumer group
With former Gov. Jerry Brown establishing a goal for 5 million light-duty EVS on California’s roads by 2030 and last year’s executive order by Gov. Gavin Newsom forbidding the sale of new gasoline-powered vehicles by 2035, there is a pressing need to construct more EV charge ports.
The California Energy Commission estimates 1.5 million charging stations will be needed to support Newsom’s executive order. Through the CPUC, investorowned utilities will help with the state’s build-out.
Before the pilot program started, SDG&E asked for $65 million in funding but the commission, saying, “we are concerned with the cost,” reduced the budget to $45 million.
The utility proceeded to build 3,040 charging stations at 254 sites — such as workplaces, condominiums and apartment complexes where drivers park for long periods of time but often don’t have access to charging infrastructure. Thirtytwo percent of the ports are located in disadvantaged communities in the San Diego area.
But by the time the pilot was completed, the price tag came to $70.2 million, 55.5 percent over the authorized budget.
“SDG&E has not adequately demonstrated efficient use of ratepayer funds in the Pilot or sufficiently explained its cost overruns,” the proposed decision said.
SDG&E officials have blamed the overruns on the program being the first of its kind.
“There was really no data to build the project cost estimates when we filed the application,” de Llanos said. “We did our best to estimate the costs at the time and this was still when transportation electrification was at a very early stage of development.”
The Power Your Drive pilot also uses a special rate structure that encourages drivers to charge when electricity supplies and renewable energy production are high and prices are low. The information technology needed for the system, de Llanos said, led to higher costs.
So did other elements that come with building infrastructure in workplaces and multi-unit dwellings, de Llanos said, such as building ramps to meet federal disability requirements.
“We felt (SDG&E) should have stopped when they hit the authorized budget (of $45 million) and let the commission know about the big overruns before continuing to build more sites,” said Elise Torres, staff attorney for The Utility Reform Network, a consumer group known as TURN, which has been involved in the case.
The two other major investor-owned utilities in California — Southern California Edison and Pacific Gas & Electric — have also established programs to build charging stations and their numbers, consumer advocates say, are considerably lower than SDG&E’S.
The proposed decision said Edison’s pilot program had an average cost of $13,731 per port while PG&E’S cost $17,956 per port. SDG&E has requested an average cost of $21,605 per port for the second phase of Power Your Drive.
In calling for an audit, TURN said the price difference “leaves one to question whether (SDG&E’S) costs were recorded correctly, and if they were, to what extent they were avoidable.” TURN also said ratepayers paid “at least a portion of consultant fees” for Power Your Drive that may have gone over budget.
De Llanos said the average costs between SDG&E and the two other utilities do not represent a true apples-to-apples comparison.
“We can’t go into Edison and PG&E’S books,” de Llanos said. “We don’t exactly know how they’ve come to their cost numbers. But when we look at it and try to adjust, we think our per port estimate on the (Power Your Drive) extension, when it only ref lects the direct capital implementation costs, is in line with the other utilities.”
Details of the overruns come three months after SDG&E reached a settlement agreement with a pair of consumer groups over a fouled-up energy efficiency program that saw the utility lose track of millions of lightbulbs that had been paid for by SDG&E customers.
Under the agreement, SDG&E will refund $51.6 million to ratepayers and pay a $5.5 million fine because it “knowingly submitted inaccurate information” about the mismanaged program in filings to the CPUC.
Part II for the program?
In its request to implement a second version of Power Your Drive, SDG&E plans to build 2,000 more charging ports in about 200 locations. The administrative law judge in the proposed decision has called for SDG&E’S costs to come to $15,000 per charging port — some $6,000 less than SDG&E’S request. The utility says the lower number is financially “infeasible.”
“We would, unfortunately, have to walk away from the program” if a $15,000 average were imposed, de Llanos said. “We know from our actual experience, running this pilot and constructing over 3,000 chargers, that it is not possible in our service territory to construct end-to-end charging infrastructure safely, reliably, using skilled labor ... for $15,000 or less.”
TURN disagrees and says one aspect of the proposed decision calls for workplaces to pay more when SDG&E installs charging stations on their sites. “If they take into account all these extra contributions from site hosts, I think the $15,000 per port is definitely doable,” Torres said.
A vote on the proposed decision had been put on commission’s March 25 agenda but was held until at least April 15 for further review. There’s speculation some major changes will be made to the proposed decision or a separate, alternate decision may be issued.
It takes a majority of the CPUC’S five commissioners to approve a decision. Commissioners have the ability to reject, approve or alter proposed decisions.