Southern California Edison has a plan to jolt the region’s heavy transport industry.
The utility put forward a proposal last week to invest $570 million in charging infrastructure for electric vehicles between 2019 to 2023, mostly for medium and heavy vehicle chargers, which are used to juice buses, trucks, forklifts, and other off-road industrial vehicles.
Should its plan be approved by the California Public Utilities Commission, local electric vehicle manufacturers as well as vendors and service providers are poised to see a big boost in business.
“We look at this as kind of a game-changer,” said Zach Kahn, director of government relations at BYD Motors Inc., a downtown subsidiary of Chinese electric bus and truck manufacturer BYD Auto Co. Ltd. “This will really drive demand for our buses and trucks.”
In 2013, BYD Motors opened a North American electric bus manufacturing plant, which employs about 400 workers, in Lancaster.
The impact of the subsidies would likely echo a boost to business that light electric-vehicle charging companies felt after Rosemead-based Edison last year launched a $22 million pilot program, dubbed Charge Ready, to install 1,500 charging stations in residential and commercial properties throughout Southern California.
“When the program was launched, and the funding was made available, many of (Edison’s) customers came to us looking for a solution,” said Jordan Ramer, chief executive of EV Connect, an El Segundo vendor of charging stations. “We’ve seen an over 50 percent boost in customer inquiries and sales in the Southern California area.”
The bulk of Edison’s proposal – as much as $550 million – will be focused on building charging infrastructure for heavy vehicles. The utility plans to allocate about $70 million of that to reimburse customers, such as businesses and transit agencies, for buying the equipment. Charging stations for heavy vehicles can cost up to $10,000 apiece. Edison has yet to determine its reimbursement rates. The remaining $480 million would be spent to upgrade grid infrastructure to support greater charging demand.
Edison has also proposed spending $19.5 million on other initiatives, such as the installation of additional light electric-vehicle chargers, five fast-charging station clusters in urban areas, and monetary rewards for rideshare drivers who use electric vehicles.
The utility plans to pay for the infrastructure spending by increasing electricity bills by up to 0.4 percent over a five-year period.
The initiative would like give the heavy-duty electric-vehicle industry in Southern California a rolling start, said BYD Motors’ Kahn.
“Infrastructure has historically been one of the challenges for large-scale adoption of electric vehicles,” he said. “To have that infrastructure taken care of, your upfront costs are significantly lower, which allow you to electrify.”
Because medium- and heavy-duty internal combustion buses and trucks spew large amounts of air pollution, electrification of those vehicles helps Edison reduce the region’s smog levels, said Laura Renger, the utility’s principal manager of air and climate, who noted the initiative also serves several of the utility’s business interests.
“It spreads out the fixed cost (of infrastructure) among a greater amount of customers,” said Renger. “(Electric vehicles) can also be used in the future to soak up overgeneration from solar.”
Heavy-duty electric vehicles are becoming a workhorse for a variety of industrial applications.
Jonah Teeter-Balin, director of product marketing at Monrovia charging equipment manufacturer AeroVironment Inc., said the market for electric forklifts has seen steady growth in recent years as lifting capacity and recharging speed has increased while overall costs have gone down. Indoor usage, particularly around food-processing plants, has become popular.
Annual sales of electric forklifts increased by 9 percent in 2015. Meanwhile, sales of internal combustion forklifts fell by nearly 14 percent during the same period, according to Irish market research firm Research and Markets.
Though the number of electric buses in California is still dwarfed by natural gas and diesel vehicles, there are signs that market is growing as well, said Kahn.
“We’ve got about 300 buses on order in the U.S.,” he said. “You are starting to see the numbers pick up.”
BYD Motors has about 50 electric buses on the road in California and it has plans to triple its Lancaster employee base to meet increasing demand, he said.
Rival electric bus manufacturer Proterra Inc. of Burlingame said Edison’s plans could have a big impact on its transit agency customers. It has supplied 21 electric buses to Foothills Transit and the Sacramento Transportation Authority, said Matt Horton, the company’s chief commercial officer. The firm leased a 157,000-square-foot manufacturing facility in the City of Industry in 2015 with plans to hire 70 workers.
“Many agencies don’t have much experience with (electric buses) and are somewhat tentative to invest in the infrastructure,” he said. “To know that they will have a strong partner in the utility is helpful. We think this will accelerate the adoption of electric vehicles.”
Because Southern California accounts for one-seventh of the nation’s entire bus fleet, Horton said he anticipated Edison’s infrastructure spending would spark greater national demand for electric buses.
“SoCal was almost single-handedly responsible for building the natural gas bus movement,” he said. “The nation looks to SoCal to see what new technologies will take off.”
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