Vehicle-to-grid (V2G) technology promises to be a true win-win: a powerful grid balancing resource for utilities and a source of incremental income for EV owners (electric school buses seem to be an ideal use case). But before V2G can really take off, there needs to be a system for utilities to compensate EV fleet operators for using their batteries as virtual power plants.
Now Pacific Gas and Electric (PG&E) has received regulatory approval to establish a V2G export compensation mechanism for commercial EV charging customers in its California service area. The V2G export rate provides upfront incentives to help commercial customers offset vehicle costs, and enables these vehicles to export power to the grid during peak energy demand periods.
The California Public Utilities Commission (CPUC) adopted a settlement agreement with Electrify America and the Vehicle-Grid Integration Council (VGIC), an industry trade group, establishing a rate that will be available to charging equipment paired with stationary energy storage systems.
More than 420,000 EVs have been sold in PG&E’s service area, representing one in six EVs in the country. A wave of large EVs such as school buses and trucks is expected to hit the roads over the next few years, and the timing could be propitious. California’s grid is facing unprecedented challenges, and V2G-capable fleets have the potential to be flexible resources that can make the grid more reliable, efficient and affordable.
“The adoption of the nation’s first V2G export rate aligns with our core focus of proactively preparing the grid, increasing access to EV infrastructure, and supporting EV adoption through rates, rebates, tools, and education,” said Aaron August, PG&E’s VP of Utility Partnerships and Innovation.
VGIC, which is committed to advancing the role of smart EV charging, hopes that this new export rate structure in the nation’s largest EV market will serve as a guide for additional innovative rate structures across the country.
“The CPUC’s decision is a strong step forward for Californians and in support of the state’s grid, implementing the nation’s first dynamic export rate for EV charging customers,” said Ed Burgess, VGIC Policy Director. “Leveraging the capability of EVs as a grid resource will help integrate more clean energy into our power system, reduce energy bills for all utility customers, and support California’s ambitious decarbonization goals. We appreciate PG&E’s constructive approach to supporting this program, and believe it serves as a guidepost for other forward-looking energy providers to follow across the country.”