DECISION ADOPTING LOW CARBON FUEL STANDARD REVENUE ALLOCATION METHODOLOGY FOR THE INVESTOR-OWNED ELECTRIC AND NATURAL GAS UTILITIES Summary This decision adopts a methodology for allocating revenue generated from the sale of Low Carbon Fuel Standard (LCFS) credits by the electric and natural gas utilities. The electric investor-owned utilities are directed to allocate LCFS credit revenue to plug-in electric vehicle (PEV) customers by reducing the purchase cost of a PEV or by applying the revenue as a credit against the customer’s electric utility bill annually. Electric utilities may return all LCFS revenue through one of these options or divide LCFS revenue between each of these options. Electric utilities may not return LCFS revenue by reducing the volumetric rate levied on the electricity used to re-charge PEVs at residential locations. Natural gas investor-owned utility companies are directed to allocate LCFS credit revenue to natural gas vehicle customers by reducing the price of compressed natural gas fuel at utility-owned stations accessible to the public or via an on-bill credit for residential customers. Natural gas utilities may choose among these methodologies. Procedural History The Legislature, through the Global Warming Solutions Act of 2006, Assembly Bill (AB) 32, and the Governor’s Office, through Executive Order S-1-07, directed state government agencies to develop programs that reduce California’s greenhouse gas (GHG) emissions. AB 32 granted the California Air
instances when the PEV owner is on a PEV rate? The Carbon Intensity Lookup Table in ARB’s LCFS regulation includes carbon intensity for both average and marginal electricity generation. Alternatively, the ARB Regulation allows regulated parties to propose an alternative carbon intensity pathway for approval by ARB. The utility should specify which metric will be used for calculating LCFS credits. Definition and Identification of Revenue Recipients For either a point-of-sale credit program or an annual credit, the utility should specifically identify which party will receive the credit allowance. The utility should specify whether credits will be made available to non-residential PEV drivers, as well as any other parties, such as car dealers, that might be allocated revenue. For all customers receiving a rebate, the utility should specify how it will identify the customer. For the up-front rebate: How will the utility identify and verify existing PEV drivers? How will the utility identify and verify drivers buying a used EV? For the annual rebate: How will the utility identify and verify current PEV drivers? How will the utility be aware when those customers sell their PEVs?
workplace charging stations, public charging stations operated by non-utility service providers, and commercial fleets – ARB allows entities other than the utility to opt-in as the regulated party. If another entity does not opt-in as the regulated party, the electric utility may do so. Thus, for each utility’s LCFS Implementation Plan, that utility should identify whether or not it will serve as the regulated party for specific nonresidential sites, workplace charging sites and commercial fleets that do not optin as a regulated party. The utility should also specify how it would accept (e.g. contractual assignment) and disburse credit revenue in these instances. In addition, the utility should identify whether and to what party the utility will provide LCFS revenue in situations where a residential or non-residential customer leases a PEV rather than owns it outright. Other Allocation Issues In addition to providing a general description of how the utilities will calculate, market and disburse revenues from the sale of LCFS credits, and answering the questions listed above, each utility’s LCFS Implementation Plan should address other implementation issues the utility might anticipate. LCFS Credit Revenue Distribution for Natural Gas Utilities This Decision approves two methodologies by which natural gas utilities may distribute LCFS revenue – a price discount at the point of sale of CNG fuel at IOU public-access stations; and on-bill credits for utility customers. Gas utilities are allowed to choose either or both of these methodologies.