Thursday, November 8, 2012

Californians may end up driving the wrong way...

One of the joys of growing up around British cars is the occasional "home market" example that makes its way into the US, constructed for driving on the left.  Unless you work for the post office, you probably have never experienced the dislocation that occurs when driving a right-hand-drive car in the U.S.

A recent FERC decision seems to have cleared the way for a California PUC decision that could have California electric vehicles driving (or recharging) the wrong way, a market dislocation that may have grave consequences for EVs in California and elsewhere.

The whole story began in the 2000 - 2001 timeframe, when some participants in California's electric markets engaged in what was later called market manipulation.  At a time when rolling blackouts swept the state, Dynegy negotiated long term power contracts at a significant profit.  NRG took over Dynegy's assets in 2006, and became liable to the State for the excessive profiteering.

NRG ended up owing the State of California about $980M.

They negotiated a settlement with the State that had them "paying it forward" by spending about $100M of a $120M settlement on setting up EV charging stations through their subsidiary eVgo.  Needless to say, eVgo gets to jump from their Texas market into a probably pretty lucrative California market, with the California PUC at their back putting their official imprimatur on it.

Not surprisingly, EV companies already in investing in the California market were none to happy about this.  ECOtality1 filed suit.  At the time, ECOtality CEO Jonathan Read said:
"This so-called punishment is like a restaurant failing a health inspection, then being given an exclusive franchise to open and operate every restaurant in the city, subsidized by public funds,..."

Pretty close to the truth, if not spot-on.  It's a shame that California's 1st District Court of Appeal dismissed the case.  It would have been interesting.

NRG, for their part, called it a "commitment to invest".  Nice, when you can leverage something you would probably do anyway into getting out of a jam, plus get a public agency to endorse you doing it.

Eventually, this ended up in FERC's lap.  FERC gave it their blessing today.  Odd that the decision came out the day after the election, but that could just be coincidence.

Why is this all so terrible?  OK, hang in there with me, this is a case of "unintended consequences" and it's going to get a little complicated.
  • There are 3 basic types of EV recharging:
    • Level 1 (120VAC / 15A) suitable for topping up an EV overnight at home.
    • Level 2 (230VAC / 30A) suitable for charging when parked for most or all of a working day.
    • Level 3 or "DC fast charge" (up to 500VDC / 125 A) suitable for quick fill-ups, almost on a gas station model.
  • People with "range anxiety" will want DC fast charge available, even if they'll never use it.  
    • Most EVs have about a 75 mile range, based on a 2003 DOT study, 90% of Americans would do fine on their daily commute with Level 1 charging.
    • According to a 2009 DOT study, the average private vehicle commute in the US was only 12.79 miles.  (I commute that far by bicycle!)
  • There are two primary competing standards for Level 3 charging connectors, CHAdeMO and SAE J1772_201210 (that incorporates DC fast charging).
    • CHAdeMO is not an open standard.  It's highly proprietary, and not compatible with any other system.  In order to use the CAHdeMO connector, you've got to join the CHAdeMO Alliance.  My understanding is you have to pay a hefty sum just to read the standard. 
    • SAE J1772_201210 and it's related standards are open standards (heck, even I had an opportunity to make a tiny contribution to the development, and I'm not an Automotive Engineer, I don't even play one on television).  SAE's communication protocols are designed to be compatible with other standards.  In order to use SAE J1772, you just need to be associated with the SAE.  Anyone can see it for $66, less if you buy more than one standard volume.
  • As far as I can determine, eVgo rechargers use CHAdeMO for DC fast charge, and the AC-only version of  J1772 for Level 2.
  • The only cars sold in the US that use CHAdeMO are the Nissan Leaf and the Mitsubishi 1-MiEV.
Admittedly, CHAdeMo is already out there, and SAE J1772_201210 was just published.  Proprietary standards are often developed faster than open standards, because they only have to serve one company's interests.  In fact, that's usually the purpose.

Think VHS vs. Betamax or Blu-Ray vs. HD DVD.  (Interesting, Sony lost the first battle, and won the second.  But, I digress...)
 So, California get a fast start into the world of public EV charging.  Faster isn't always better.  (Remember the old Engineering adage: "Fast, cheap, good.  Pick any two.")

Rather than taking the time to allow a really competitive market to form, California gets to be "first".  As a result;
  • eVgo gets an advantage in the market, by dint of their association with the CPUC,
  • Nissan and Mitsubishi get an advantage in the market for EVs in California, since only their cars will be capable of using the DC fast charge that eVgo offers,
  • CHAdeMO gets an advantage in the DC fast charge penetration market, and
  • American car makers who want to compete in California will have to:
    • pony up to join an association intended to help Japanese carmakers, and 
    • either make a "California only" model, with a CHAdeMO connector, or make the connector a "dealer option" and make the car able to handle multiple communication systems.  (At least the "California" gasoline engined cars could be fueled outside California.)
So Californians may soon be "driving the wrong way," towards proprietary solutions and closed markets, instead of open, interoperable solutions and markets.

They may drag the rest of us along with them.  Am I being pessimistic?  Perhaps.

<sigh>  I'm going to go drive my MG.


1. Fair disclosure: ECOtality is a member of the EIS Alliance, of which I am the Executive Director.

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