REPORT TO COUNCIL
SUBJECT
Title
Action on an Electric Vehicle Program funded through Low Carbon Fuel Standard Credits to Facilitate Electric Vehicle Adoption and Related Budget Amendment
Report
BACKGROUND
In October of 2016, the City of Santa Clara, dba Silicon Valley Power (SVP) entered a voluntary California Air Resources Board (CARB) program called the Low Carbon Fuel Standard (LCFS) Program. The LCFS Program was created through AB 32, California Global Warming Solutions Act of 2006 and Governor’s Executive Order S-01-07. The LCFS Program is a key part of a comprehensive set of programs in California to cut greenhouse gas emissions and other smog-forming and toxic air pollutants by improving vehicle technology, reducing fuel consumption, and increasing transportation mobility options. The LCFS Program is designed to decrease the carbon intensity of California's transportation fuel pool and provide an increasing range of low-carbon and renewable-powered alternatives. The goal of this program is to reduce by at least 10 percent the carbon intensity of California’s transportation fuels by 2020.
Through compliance with the LCFS Program, SVP receives LCFS credits. These credits are sold in an exchange and these funds are to be used to comply with Title 17 of the California Code of Regulations Section 95483(e) (1) (A-D), LCFS program proceeds may only be used in accordance with the following requirements.
Regulated Parties for Electricity
For electricity used as a transportation fuel, the party who is eligible to generate credits is determined as specified below:
For on-road transportation fuel supplied through electric vehicle (EV) charging in a single- or multi-family residence, the Electrical Distribution Utility is eligible to generate credits in its service territory. To receive such credits, the Electrical Distribution Utility SVP must:
A. Use all credit proceeds to benefit current or future EV customers;
B. Educate the public on the benefits of EV transportation (including environmental benefits and costs of EV charging, or total cost of ownership, as compared to gasoline);
C. Provide rate options that encourage off-peak charging and minimize adverse impacts to the electrical grid; and
D. Include in annual compliance reporting the following supplemental information: an itemized summary of efforts to meet requirements (A) through (C) above and costs associated with meeting the requirements
The City currently has a total of seventy (70) City installed public EV charging stations located at Central Park Library, Santa Clara Convention Center, Tasman Garage, City Hall, and, most recently, the Northside Library. Two Level 3 DC fast charging ports at the Central Park Library have been identified for replacement.
In July 2018, Council approved a Grant Agreement with the California Energy Commission and approved the appropriation of those grant funds to complete the Electric Vehicle (EV) Ready Communities Challenge Blueprint Plan to help the City achieve electric vehicle readiness, and understand current gaps and implementation barriers. Staff anticipates this Blueprint in combination with the proposed use of LCFS Program funds for charger rebates and other incentives will accelerate deployment of transportation electrification within Santa Clara.
DISCUSSION
The City has seen an increase in residential EV purchases up from 38 EVs in 2011 to over 2,200 EVs to date, per California Clean Rebate Program statistics. This does not include fleet vehicles that entities like the City have begun to acquire. There is also a significant inflow of EVs that come into the City to work, shop, and visit the entertainment venues. With convenient, publically accessible EV charging incentives to promote EV charging in the community, and with community outreach and engagement, SVP can meet the intent and requirements of the LCFS Program to reduce carbon emissions from the transportation sector.
Staff proposes to work with other City departments to develop, administer, and market a multifaceted SVP EV-Program that facilitate the adoption of Electric Vehicles throughout the City of Santa Clara. The proposed EV-Program will include an Electrical Vehicle Charging Equipment rebate for residential, multi-family, schools, non-profit entities, and will develop projects for public access EV charging, resiliency and emergency EV charging access, along with outreach, education and community engagement. Staff has analyzed other utility offerings and these proposed charging rebates will match or exceed those of comparable utilities.
Staff is recommending the establishment of a SVP EV Program that would include the following initiating activities in fiscal year 2018/19:
Electric Vehicle Charging Equipment Rebate:
- Residential: $750 rebate per installed electric vehicle charger equipment
- Multi-Family: $3,000 rebate per installed public electric vehicle charger equipment
- Schools & Non-Profit entities: $5,000 per installed electric vehicle charger equipment
Electric Vehicle Public Access Charging:
- Placing public electric vehicle chargers at City owned facilities, such as at the new Reed and Grant Sports Park (8 charging ports) and Raymond G. Gamma Dog Park (6 charging ports)
The LCFS program is undergoing a proposed redesign by the State of California and the amount of credits SVP would receive for Calendar Years 2019 and2020 are subject to change per rulemaking by the California Air Resources Board. CARB is proposing to use a percentage of LCFS funds from electric utility providers, like SVP, to fund a statewide point-of-sale rebate. The State is proposing to administer and market the program on the utilities behalf. SVP may receive more LCFS credits through the sale of Electric Vehicles and use of publically owned chargers. Staff further recommends that Council grant the City Manager authority to make programmatic modifications in response to EV market changes, availability of new technology, and/or program changes as required by the State.
ENVIRONMENTAL REVIEW
This action being considered does not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15378 as it has not potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment.
FISCAL IMPACT
SVP’s EV-Program will be funded one-time through the sale of LCFS credits. On November 17, 2017, 2,360 credits were sold generating $224,200 in revenue and on July 13, 2018, 10,683 credits were sold for $1,944,306, for a total of $2,168,506. The LCFS Program is projected to receive an additional 11,500 credits for Calendar Year 2018 transferred to SVP in March 2019. Consolidating the funds from the various sales of LCFS credits in in the Electric Operating Grant Trust Fund will support the proper tracking of funds as the program is initiated. Program revenues may be allocated for the estimated 0.25 FTE needed to administer and implement this program. Staff anticipates using existing staff resources supplemented with temporary as-needed staff to stand-up the initial program objectives and will be reevaluate staffing resources based on program participation and expansion of activities.
Budget Amendment
FY 2018/19
|
|
Current |
Increase/ (Decrease) |
Revised |
|
Electric Utility Operating Fund |
|
|
|
|
Funding Use Category |
|
|
|
|
Wholesale Transaction Credits |
$1,944,306 |
($1,944,306) |
$0 |
|
Fund Balance |
$183,755,224 |
($224,200) |
$183,531,024 |
|
Intra Transfers Out - Miscellaneous |
$0 |
$2,168,506 |
$2,168,506 |
|
|
|
|
|
|
|
|
|
|
|
Electric Operating Grant Trust Fund |
|
|
|
|
Funding Source Category |
|
|
|
|
Intra Transfers In - Miscellaneous |
$0 |
$2,168,506 |
$2,168,506 |
|
|
|
|
|
|
Funding Use Category |
|
|
|
|
Salaries |
$472,265 |
$35,000 |
$507,265 |
|
Benefits |
$269,947 |
$18,000 |
$287,947 |
|
Materials/Services/Supplies |
$11,349,518 |
$2,115,506 |
$13,465,024 |
COORDINATION
This report has been coordinated with the Finance Department and City Attorney’s Office.
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email clerk@santaclaraca.gov <mailto:clerk@santaclaraca.gov> or at the public information desk at any City of Santa Clara public library.
RECOMMENDATION
Recommendation
1. Approve the establishment of Silicon Valley Power’s Electric Vehicle (EV) Program as Program 1319 in the Electric Operating Grant Trust Fund using proceeds from the sale of LCFS Credits;
2. Transfer of $2,168,506 from the sale of LCFS Credits in the Electric Department Operating cash account to the Electric Operating Grant Trust Fund, and make additional budget appropriations to support the initiation of the EV-Program, and;
3. Grant the City Manager authority to make future programmatic changes as necessary.
Staff
Reviewed by: John C. Roukema, Chief Electric Utility Officer
Approved by: Deanna J. Santana, City Manager