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California regulators voted unanimously on Thursday that companies providing electric vehicle charging stations and services will not be regulated as public utilities in the state, which is expected to be one of the earliest and largest markets for plug-in vehicles and a model for other markets. This marks a victory for charging infrastructure ventures including Coulomb Technologies, ECOtality (s ETLY) and Better Place, which have been pushing for this decision for months.
The trio, which makes of the EV Service Provider Coalition, have argued that the strict regulations covering public utilities could stifle innovation, competition and investment if extended to charging service providers, effectively halting an emerging industry in its tracks. The CPUC notes in its decision that a broad array of entities may take on the role of charging service provider. Those providers could include owners of standalone charge points, residential and commercial landlords that provide charging as a service to tenants or tenants’ customers, condo associations or employers offering charging as a service to residents or employees.
Utilities including PG&E (s PCG) meanwhile, have weighed in throughout the CPUC rulemaking and argued that electric vehicle charging service providers should in fact be considered public utilities, but face flexible or light-handed regulations covering things like safety, interoperability, and reliability of equipment and services. According to the CPUC’s decision, PG&E said “no need exists for traditional cost-based regulation of pricing, as long as no market power is demonstrated.”
“The industry is poised to take off in California, but this will only happen if there is at least a measure of assurance that an EV service provider will not be treated like an electric utility,” the EV Service Provider Coalition wrote in a comment filed with the California Public Utilities Commission last month. The group has also pushed for the CPUC to avoid boxing EV charging providers into a definition as entities that resell electricity, rather than providing an electric vehicle service.
The CPUC seems to have taken that to heart. In a release about its decision this week, the CPUC summarizes its decision, “that the sale of electric vehicle charging services to the public does not make a corporation or person a public utility solely because of that sale, ownership, or operation.” Commissioner Nancy Ryan added a statement that the decision “provides needed regulatory clarity to encourage the state’s entrepreneurs and investors to develop charging solutions that will satisfy consumer needs and work harmoniously with the electric grid. ”
ECOtality President and CEO Jonathan Read welcomed the decision in a statement today, commenting that it will allow businesses to compete, which in turn will help lower prices and improve product quality. “While we believe electric vehicle infrastructure can be viable in diverse utility regulatory settings,” he said, “we value an open, innovative business environment, and are gratified to see California’s regulators are supportive of that position.”
Better Place’s VP of North America Jason Wolf told us in an interview earlier this year that one of the biggest reasons for a slower, more cautious electric vehicle infrastructure environment in California compared to some other markets has been a lack of clarity from the CPUC on this question of regulating charging service providers like utilities. Wolf said this uncertainty has made investors — the kind that put $350 million into Better Place in January for its efforts — less eager to move quickly to back a Bay Area network.
Getting today’s decision on the books will be a green light for these companies in some ways, but there’s still a long road for regulators to figure out how to handle this new industry. As ECOtality points out, the CPUC is specifically hanging onto the right to consider and possibly regulate other aspects of the electric vehicle and charging market, such as home installation, metering and rates.
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