California Governor announces $120M settlement with NRG will fund electric car charging stations across California; new Executive Order to accelerate commercialization of ZEVs
23 March 2012
California Governor Edmund Brown Jr. and the California Public Utilities Commission to announced a $120-million settlement with NRG Energy Inc. (stemming from claims reaching back to Dynegy and the California energy crisis in 2000 and 2001) that will mostly be applied to fund the construction of a statewide network of plug-in vehicle charging stations, including at least 200 public fast-charging stations and another 10,000 plug-in units at 1,000 locations across the state.
The Governor also signed an executive order (EO) designed to accelerate the commercialization of zero emission vehicles (ZEVs). The EO instructs all state government entities under the Governor’s control to “support and facilitate the rapid commercialization of zero-emission vehicles” and sets out specific targets to lay the foundation.
This executive order strengthens California’s position as a national leader in zero-emission vehicles, and the settlement will dramatically expand California’s electric vehicle infrastructure, helping to clean our air and reduce our dependence on foreign oil.—Governor Brown
Settlement. The agreement, pending approvals and finalization, resolves outstanding litigation arising out of a long-term electricity contract entered into over a decade ago by a subsidiary of Dynegy, Inc., then a co-owner with NRG of the portfolio of power generating plants currently owned by NRG in California. NRG assumed full responsibility for resolving this matter in 2006 when NRG acquired Dynegy’s 50% interest in the assets. $100 million from the settlement will fund the fast-charging stations and the installation of the plug-in units and electrical upgrades. The remaining $20 million will be directed to the CPUC for ratepayer relief.
[Dynegy, along with Enron and several other energy companies, was accused of energy price manipulation during the California electricity crisis that began in May 2000. Dynegy had also emerged as a white knight bidder for Enron, but scrapped the merger before closing. Enron subsequently declared Chapter 11 and unsuccessfully sued Dynegy. Buyout firm Blackstone Group acquired Dynegy in 2010, and power producer NRG Energy Inc. paid Blackstone $1.36 billion for Dynegy plants in California and Maine. ]
The fee-based network of charging stations funded by the settlement and to be built by NRG will be installed in the San Francisco Bay Area, the San Joaquin Valley, the Los Angeles Basin and San Diego County.
The settlement will launch a virtuous circle in which ever more Californians will feel comfortable driving EVs, and growing EV sales will in turn attract ever more investment in charging infrastructure to our state.—CPUC President Michael Peevey
The new ZEV (zero emission vehicle) regulations approved by the California Air Resources Board in January as part of the Advanced Clean Cars package (earlier post) requires minimum numbers of battery electric and fuel cell electric vehicles to be sold into California, with an anticipated target of 15.4% of new vehicles by 2025 (i.e., one in 7 new cars).
Executive Order. Governor Brown also ordered that the California Air Resources Board, the California Energy Commission, the Public Utilities Commission and other relevant agencies work with the Plug-in Electric Vehicle Collaborative and the California Fuel Cell Partnership to establish benchmarks to help achieve by 2015:
Major metropolitan areas will be able to accommodate zero-emission vehicles, each with infrastructure plans and streamlined permitting; and
The manufacturing sector will be expanding zero-emission vehicle and component manufacturing;
The private sector’s investment in zero-emission vehicle infrastructure will be growing; and
The State’s academic and research institutions will be contributing to zero-emission vehicle research, innovation and education.
The Executive Order also calls for benchmarks to achieve the following by 2020:
The state’s zero-emission vehicle infrastructure will be able to support up to one million vehicles;
The costs of zero-emission vehicles will be competitive with conventional combustion vehicles;
Zero-emission vehicles will be accessible to mainstream consumers;
There will be widespread use of zero-emission vehicles for public transportation and freight transport;
Transportation sector greenhouse gas emissions will be falling as a result of the switch to zero-emission vehicles;
Electric vehicle charging will be integrated into the electricity grid; and
The private sector’s role in the supply chain for zero-emission vehicle component development and manufacturing State will be expanding.
Benchmarks ordered for 2025 include:
More than 1.5 million zero-emission vehicles will be on California roads and their market share will be expanding; and
Californians will have easy access to zero-emission vehicle infrastructure;
The zero-emission vehicle industry will be a strong and sustainable part of California’s economy; and
California’s clean, efficient vehicles will annually displace at least 1.5 billion gallons of petroleum fuels.
The Executive Order further mandates a California target for 2050 of a reduction of greenhouse gas emissions from the transportation sector equaling 80% less than 1990 levels.
AB 32, the 2006 Global Warming Solutions Act, calls for a 30% reduction of greenhouse gas emissions by 2020. An overall goal of a reduction of 80% below 1990 levels by 2050 was set by an executive order signed by former Governor Arnold Schwarzenegger.
Brown’s Executive Order further calls for the state vehicle fleet to increase the number of its zero-emission vehicles through the normal course of fleet replacement so that at least 10% of fleet purchases of light-duty vehicles be zero-emission by 2015 and at least 25% of fleet purchases of light-duty vehicles be zero-emission by 2020.
This directive shall not apply to vehicles that have special performance requirements necessary for the protection of the public safety and welfare.
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