Utilities May Recoup LEV Program Costs

Low-emission vehicle programs implemented by investor-owned utilities are not discretionary and should be reviewed in utilities? general rate cases or cost-of-service proceedings, rather than as separate funding applications, the California Public Utilities Commission ruled May 5. The commission adopted the recommendations contained in a joint report by 13 parties, including the state?s four gas and electric investor-owned utilities, the California Energy Commission, the California Air Resources Board, and regional air districts. The parties agreed that the utilities should recoup their future investments in low-emission vehicle (LEV) programs from ratepayers, provided that they serve the public interest by promoting cleaner air and safer, more reliable, less costly gas or electrical service. The commission noted that while the Clean Air Act does not require utilities to implement LEV programs, federal law mandates that utilities include low-emission vehicles in their own fleets. ?Utilities don?t carry out these programs at their discretion,? said commissioner Susan Kennedy, who authored an alternate decision that the commission approved on a 3-0 vote. LEV programs operated by Pacific Gas and Electric, San Diego Gas & Electric, Southern California Edison, and Southern California Gas are designed to develop and support electric and natural gas?powered vehicles. The commission initially approved ratepayer funding for utility LEV programs in 1993 after the California Legislature enacted a law directing the CPUC to work with utilities, other state agencies, and the automobile industry to facilitate the use of low-emission vehicles fueled by electricity and natural gas. The commission stressed, however, that it never intended for ratepayer-funded LEV programs to become permanently entrenched in utilities? operations and costs. Rather, the funding was intended to provide a bridge to creating a sustainable, competitive LEV industry, the CPUC stated. In their joint report, the parties recommended that the CPUC streamline its application procedures for LEV funding as part of their general rate cases. Utility LEV programs should not be terminated until utilities no longer operate them, the parties stressed. They also found that compliance with existing law is adequate to ensure fair competition between utilities and third parties and that LEV programs should continue to be funded as long as utilities and their customers use low-emission vehicles and utility customers directly benefit from them.

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Utilities May Recoup LEV Program Costs

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