Canary Media’s Down to the Wire column tackles the more complicated challenges of decarbonizing our energy systems.
California may be one of the first states to face the risk of its power grid growing too slowly to support the surging adoption of electric vehicles, heat pumps and more — but it won’t be the last.
That’s why Colleen Quinn, co-administrator of the National EV Charging Initiative, is excited about SB 410, a new California law aimed at speeding up the state’s grid buildout. In fact, she’d like to see it serve as a model for other states across the country.
“We’re focused on state utility policy because utilities have the ability to either slow down or accelerate the growth of the market,” Quinn said. “We need to understand and deal with this big problem — the timing and the process that’s needed…to support the utilities and the industry.”
SB 410, written by state Senator Josh Becker (D) and signed into law by Governor Gavin Newsom (D) in October, takes a comprehensive approach to a complicated problem, she said. Simply put, California’s utilities aren’t expanding their power grids fast enough to meet the state’s decarbonization goals.
The lag in grid buildout is already leading to yearslong delays in energizing EV truck-charging depots across the state, Quinn noted. That’s a problem for trucking and freight companies trying to comply with California’s Advanced Clean Fleets rule, which sets deadlines for converting hundreds of thousands of diesel trucks to zero-emissions models over the next 12 years.
“They can’t get the power from the utilities fast enough,” she said.
The slow pace of charging infrastructure buildout is also a thorn in the side of local governments, workplaces and everyday homeowners trying to secure charging for smaller EVs — and the challenge will only increase. Right now, California has 1.5 million plug-in electric and hybrid vehicles on the road; that figure is expected to be 8 million by 2030.
Though it’s most acutely felt by EV owners who need charging equipment right now, the slow pace of grid expansion is a drag on electrification efforts beyond transportation. In fact, over the past year, utility Pacific Gas & Electric has failed to deliver timely grid hookups to hundreds of commercial and multifamily buildings due to a combination of misaligned grid planning, supply and workforce shortages, and the utility’s focus on burying and hardening power lines to forestall grid-sparked wildfires.
Eventually, grid constraints will threaten a whole host of other climate priorities as well, said Max Baumhefner, a senior attorney with the Natural Resources Defense Council climate and clean energy program. It could stymie the push to convert buildings from fossil-fueled furnaces and water heaters to heat pumps, as is increasingly required under state building codes and emissions standards. Grid constraints could also restrict the role of distributed solar and battery systems, which studies indicate are vital to augment the utility-scale renewable energy resources that face their own interconnection bottlenecks on the state’s high-voltage transmission grid.
“PG&E’s territory is bigger than the state of Florida,” Baumhefner said. “We can’t write off a territory that big” by failing to take action to unclog the backlog in grid interconnections and expansions “and still meet the state’s clean energy and climate goals. […] We have to get to work now.”
A comprehensive plan to solve a complex problem
The climate and economic harms posed by California’s sluggish grid buildout have united an unusually broad coalition. Among SB 410’s supporters are dozens of environmental groups, including the Natural Resources Defense Council, the Sierra Club and the Environmental Defense Fund. Labor unions, including the International Brotherhood of Electrical Workers and Coalition of California Utility Employees, are also on board, as are business groups including the California Chamber of Commerce and California Building Industry Association.
SB 410 gives the California Public Utilities Commission until September 2024 to set target timelines for utilities to connect and upgrade customers to the grid. It also orders the CPUC to include state and local government air quality, transportation and building electrification plans and workforce development needs in those plans — and to control the costs of those grid expansions even as it sets deadlines and penalties for utilities that fail to build fast enough.
Revamping the regulations that dictate how utilities plan for and expand distribution grids — the low-voltage networks that carry power from substations to customers — is far from simple, however. It’s particularly complicated when that buildout must happen in advance of the expected future influx of EV charging and electrification loads that will require the new capacity.
The first step is to refine forecasting of where new grid demand will show up, Baumhefner said. Utilities and state agencies have traditionally structured those forecasts on typical timelines for large construction projects like schools, shopping malls and residential subdivisions.
But that forecasting process hasn’t kept up with the state’s aggressive transportation and building-electrification goals — including the speed at which certain projects can move. Truck-charging depots can draw as much power as sports stadiums, he noted, “but unlike a sports stadium, which the utility sees coming years if not decades in advance, it only takes six months” to install dozens of high-voltage EV chargers in a parking lot.
But grid delays can’t be blamed entirely on slow utility planning and forecasting cycles, noted Marc Joseph, an attorney for the Coalition of California Utility Employees. The supply-chain disruptions of the past few years have lengthened the time it takes to secure critical grid gear like transformers from months to years, for example. What’s more, training and apprenticeship programs for utility lineworkers typically take four to five years to complete.
That’s why SB 410 orders the CPUC to “come up with realistic standards” for supply chains and workforce development, “and then require utilities to do annual reporting, and, if they’re falling behind, submit a plan for how to catch up.”
Finally, he said, there’s the matter of how utilities will pay for all the grid upgrades they’ll be asked to complete much faster than they’ve typically done. A recent study warned that California’s major utilities will likely need to invest from $30 billion to $50 billion by 2035 to expand their distribution grids to enable the state’s electrification goals, with EVs driving the majority of that demand.
That brings up what he described as “the only controversial thing in the whole bill — how do we help PG&E catch up?”
Why California’s largest utility needs to catch up on its grid buildout
The need for this catch-up stems from California’s utility regulatory structure, Joseph explained. Utilities recover the cost of grid upgrades by winning permission from regulators to pass those costs onto the bills of customers in the form of rate increases.
In California, those plans, known as general rate cases, come every three years, but their preparation begins years before they’re submitted.
PG&E’s current plans are based on data from back in 2019, before state agencies had fully grasped how EV mandates would cause a surge in electricity demand. In other words, “PG&E fell behind because they weren’t expecting it,” he said — which is a big part of why the utility is now months behind in providing basic electrical hookups for more than 300 already-built commercial and multifamily properties, according to data submitted to California lawmakers.
California’s other major investor-owned utilities aren’t in quite as bad a situation, Baumhefner noted. In May, Southern California Edison, the state’s second-largest utility, filed its plans for a three-year rate case that includes extensive grid expansion and electrification targets based on more recent forecasts. Those plans were boosted by a state law passed last year, AB 2700, which explicitly orders the CPUC and utilities to build the latest EV growth forecasts into their grid expansion plans.
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