December 26, 2023

Decoding California's Electric Vehicle Charging Requirements: A Comprehensive Guide for Utilities

7 Min. Read

California is currently the top state in electrical vehicle (EV) adoption. It’s also a leader in creating rules and requirements that support the development of a modern energy infrastructure adapted to the growing rate of EV adoption.

As an energy provider, navigating the California EV charging requirements can be a challenge, but these rules can also help you adopt modern practices and become an electrification leader.

The Spark Behind California’s EV Movement

The current California electric vehicle charging requirements reflect a statewide policy designed to foster EV adoption. The California Air Resources Board approved drastic EV sale targets that would translate into EVs accounting for 35% of new vehicle sales by 2026 and 100% of sales by 2035.

EV sales currently represent 25% of sales, up from 16% last year. The push for widespread EV adoption is part of a broader climate plan that would result in net-zero carbon emissions and 100% clean electricity usage by 2045.

California is supporting its bold EV adoption targets with ambitious programs designed to develop the energy infrastructure, including $10 billion in investments under the California Climate Commitment.

So far, California is ahead of schedule for EV adoption and installing chargers, but California EV charging requirements remain significant, with a need for at least 1.2 million chargers before 2030 and all of those chargers will need to be supplied power.

Understanding California’s EV Charging Mandates

California is supporting its bold climate action plan with a strong regulatory framework that focuses on developing a modern electrical vehicle charging infrastructure. This framework also ensures the involvement of multiple players, including local jurisdictions and utilities.

California EV-Related Mandates

Governor Newsom made history in 2022 by signing Executive Order N-79-20, officially adopting a plan to reach a 100% target for EV sales by 2035.

This mandate is accompanied by a number of new rules that aim to facilitate this transition. For instance, AB 1236 requires cities and counties to create a streamlined process to approve charger installations in an effort to help address the California EV charging requirements.

The California Building Standards Commission tackled the issue of meeting the growing California electric vehicle charging requirements by introducing new mandatory building standards that call for pre-wiring public, commercial, and multi-family buildings to facilitate future charger installations.

The state’s Energy Resources Conservation and Development Commission is ensuring that all communities will have equal access to EV charging by creating provisions for assessing the state of charging and allocating funding to developing charging in underserved communities.

Additional mandates aim to modernize the grid, including California Public Utilities Code 740.16, which requires the California Public Utilities Commission to take steps to better integrate EV charging into the grid, and the California Independent System Operator to approve $7.3 billion in funding to improve energy transmissions.

Incentives

California is using incentives to ease the cost of this major transition and encourage a wide range of players to play an active role and help meet the California EV charging requirements.

Over the next five years, California will receive $384 in NEVI funding to fund various projects. The state is also offering an incentive of up to $2,000 per EV via its Clean Vehicle Rebate Project, and EV owners can apply for another program to cover 50 to 75% of the EV charger installation cost.

How Can Utilities Make a Difference?

As an energy provider, you can offer incentive programs to facilitate access to commercial and residential EV charging. You can also compile a list of existing state incentives and help users navigate and apply to these different programs.

Utility Companies: At the Heart of the Revolution

Utility companies are playing a pivotal role in meeting the California electric vehicle charging requirements and supporting the state’s climate action plan by tackling these challenges.

Facilitating Access to Ownership

EV ownership comes with an upfront cost. Energy providers are making a difference by offering rebates for EV purchases and residential charging equipment. Many utilities, such as PG&E, also offer additional incentives for electric fleets and school buses to further support the adoption of electric vehicles.

Grid Capacity

By offering a different TOU rate for EV owners to encourage charging during off-peak hours, Alameda Municipal Power is helping to shift the energy demand for EV charging when more people and businesses are using electricity and demand is highest, helping to alleviate and support local grid capacity. Azusa Light & Water is taking a similar approach by offering a program with discounts.

Pricing is an effective tool for managing the evolving electrification needs linked to EV charging, but utilities also need to actively expand their production capacity by investing in new clean energy projects and partnering with local energy producers.

Regulatory Challenges

The regulatory environment is becoming increasingly complex at the state level. Meeting the California Public Utilities Commission’s (CPUC) resource adequacy requirements requires energy providers to develop a strategic approach to increasing their production capacity.

The CPUC also approves electric rates, creating a strict framework for billing. A new regulatory challenge is emerging as the state is lowering incentives available via the net metering program, making selling solar energy back to the grid less appealing. This measure prevents utilities from overpaying for this clean energy, but utilities might need to roll out additional incentives, such as rebates on installation costs, to encourage local players to invest in solar to support the grid.

Weather Events

California is no stranger to adverse weather events, which create a genuine concern regarding grid resiliency. Utilities are exploring innovative solutions, such as partnering with local school districts to use bidirectional charging to turn electric school buses into a source of backup power during outages.

The Regulatory Maze: Navigating Compliance

Utilities need to turn compliance into a dynamic process that includes monitoring the latest changes and developing strategies to adapt.

Scope Assessment

As an energy provider, the rules that apply to your organization can vary depending on the role you play in supporting the growing California EV charging requirements.

For instance, the CPUC regulates EV charging installation programs offered by utilities to maintain a fair and competitive business environment. If you’re involved in installation projects, you’ll also have to follow rules from the National Electric Code.

Your source of funding can also determine which rules apply, with NEVI-funded projects having specific requirements.

Potential Areas of Contention

The changing regulatory landscape is creating some potential points of contention between the state and its energy providers.

Consumers are increasingly dissatisfied with energy providers, which is why the CPUC is adopting a stricter stance on regulating price hikes. It’s an opportunity to mend the relationship with consumers, but energy providers must find a balance between fair pricing and financing investments in new energy production projects to meet the California electric vehicle charging requirements.

The CPUC is also working on extending the scope of its regulations with new rules for energy transmission, battery storage projects, and more. Plus, load-serving entities must meet the state’s goals for energy production, including a 20% quota for clean energy.

The Importance of Partnerships

Experienced electrification partners can make this regulatory environment easier to navigate while helping utilities meet the California EV charging requirements. Qualified electricians can help with compliance when installing EV charging stations, startups can offer innovative ways to integrate EV charging into the grid, and local players can support the development of a fair pricing model that works for everyone.

Opportunities and Innovations on the Horizon

As an energy provider, you can position yourself as an electrification leader by planning for what comes next in the world of EV adoption.

The state of California could adopt further mandates that will support its climate action plan, including a project to turn the state into a centralized energy procurement agent, measures to invest in EV charging in low-income communities, and a proposal to have municipalities create a streamlined process to install EV chargers in the public right-of-way.

New technologies are also opening up exciting possibilities. Bidirectional charging, smart grid interfaces, microgrids, and even electrified roads could define tomorrow’s energy infrastructure while meeting the growing California EV charging requirements.

Utilities can make a difference by implementing the latest technologies, working closely with state entities to meet compliance requirements, and forming local partnerships to foster electrification.

What’s Next for California Energy Providers?

Forward-looking utilities can support California’s goal to go electric by 2035 by rolling out incentives, helping customers navigate existing programs, advocating for new regulations, and forming partnerships with state players, non-profits, municipalities, and other entities.

As an electrification leader with more experience than anyone else when it comes to EV charger installation and implementing other energy transition technologies, Qmerit can help you navigate this increasingly complex regulatory environment and turn these rules into a valuable roadmap for electrification rather than a burden. Get started and support electrification in your region by learning more about EV adoption and electrification initiatives in California and contacting Qmerit today!