 What I'm going to do today is I think perhaps a change of pace for you all, I understand, and that this is really going to be pure policy, the talk I'm going to give you today. And although I'm not a partner at Energy and Environment Economics anymore, I'm still affiliated with the firm. And I continue to work with them, but I launched a new firm with professional colleague Emobility Advisors, which is really our goal is to work full time on policy to promote transportation electrification across the board. So hence the E3 PowerPoint format, but the new title. And I think the other reason this is in the E3 PowerPoint format I'll mention is just a lot of what I'm going to present to you today is distilled from recent reports that I've worked on with E3 to share with utility clients who are always eager to understand what's going on in other parts of the country. So what I want to do in the 30 to 40 minutes that I'm going to aim to talk to you is to, after this quick introduction, then give a little background on the electric utility industry, quick primer on market and regulatory context. Then I want to talk about some of the major themes across states and utilities, some of the things that really the biggest questions that they're all thinking about. And then I want to go into three, pardon me, five specific areas which are very salient and talk a little bit about where states are coming together and where they're converging on those things. Now, the next question is, oh, okay, right. So electricity, electric utilities and automakers have historically existed in completely different worlds, but the electrification of transportation is really bringing them together. And I think that there's something of an odd couple. So let me lay some groundwork to get to the point where you can, I think, see that. First thing to understand about electric utilities in the United States is that there are a lot of them. There are something like close to 3,000 of them. In fact, on other things, I think I've even seen numbers as big as 4,000. They fall into three categories, investor owned. So they're stock, they're traded on the publicly traded companies, publicly owned, which are typically owned and run by a city or a county. So like Austin, Texas, Seattle, LA, Sacramento are examples of big publicly owned utilities, but there's a lot of little ones. And then there's also a lot of cooperatives. However, a relatively small number of investor owned utilities, 168 versus nearly 3,000 public ones. That small portion that's investor owned really accounts for most of the customer served. You can see that in the two charts in the bottom left-hand corner. The other thing is just to give you a sense of the size of them and where our utilities fit in. The top, the bottom right corner gives you some of the major utility companies in the US. And this is kind of old. I see it's from 2012 and there's been some more mergers since then. But the main thing to notice that two of the California utilities, Pacific Gas and Electric, PG&E and Edison International, which is the holding company for Southern California Edison, they're among the top two utilities in the country. And if you actually look at, sort of separate away the holding companies or some of the other enterprises that are sometimes wrapped up in them, PG&E and Edison are probably still the largest utilities in the US. So that's important to think about when we think about California. So very Balkanized industry, but a lot of the money is in the big IOUs. They mainly serve the big populace areas. So automakers, really different kind of industry. Highly competitive, consumer product, enormous. The big automakers are all global enterprises. 2019, total revenue for the industry was over a trillion dollars. If you look at the market cap for the top 10 companies led by Toyota and VW, it's huge, 200 billion for Toyota, 80 billion for VW. And if you look at a utility, their market cap is typically quite a bit smaller, particularly a lot of the ones on this chart on the right are again, they're holding companies. So they're multiple utilities in there. But if you go, like, I think the first one that's actually just a single utility is Consolidated Edison, which serves the New York City area. And then PG&E as of April last year, about a year ago, their market cap was 27 million for ConEd, 22 million for PG&E. If you follow the news, you know that lots of things have happened that have caused PG&E's stock value to go down. So I note below that their highest market cap since 2006 was 35 million. So, you know, one utility, one big utility has about the same market cap as a good-sized automaker and is dwarfed by the biggest one. And the revenues also, if you look at like Toyota's 2019 revenues of 172 billion dollars, compare that to PG&E's of about 17 billion dollars again, order magnitude difference. So, you know, just to put them in perspective. So the other thing that's, and I'll come back to what the significance of some of those things are, but just bear that in mind. So IOUs, investor-owned utilities are regulated at the state level. That is like the nature of the federalism for the energy industry is that really most of the regulation on all the important things occurs at the state level. The principal exception is interstate commerce, which primarily means regional electricity markets like PJM and the Mid-Atlantic region and interstate transmission. But really most other aspects of IOUs operation, pricing, et cetera are regulated at the state level by entities with various names, but commonly called public utility commissions or public service commissions. In most states, but not all of them, PUC commissioners are nominated by the governor and typically have some sort of legislative confirmation process. That's how it works in California. There are a number of states, for example, our next door neighbor, Arizona, where they're elected and that can lead to some very bizarre things happening. And if anybody remembers, I'll tell you about one in the Q&A after the seminar and the student discussion. So EPA regulates smoke stacks, but PUCs regulate pretty much everything else. So it's really these best-run utilities are local monopolies. What they have a monopoly over depends on whether or not they're in what's known as a restructured state where they're still fully vertically integrated and they handle all aspects of generation transmission and distribution of electricity. But any event, they're local monopolies and they're regulated by these state authorities. Okay, OEMs, automakers, original equipment manufacturers or OEMs are regulated mainly at the federal level with some delegations of the states. Now that can seem confusing in California and I'll explain why. So the federal clean air act is the main authority for tailpipe emissions from vehicles. And traditionally that's been the mileage standards set by the US EPA and the National Highway Safety Traffic Administration. And then I think the enforcement is largely up to the states. However, the Clean Air Act granted California unique power to set its own stricter tailpipe standards when it was passed back in the early 70s. And the reason for that is that due to decades of air quality issues in Southern California, our state was already regulating emissions from vehicles and generally trying to address pollution problems. And so California had an exemption carved out for it that allowed it to continue to have its own stricter standards in order to try to meet stricter standards for vehicles and other things in order to meet the federal standards for various pollutants like docks and particulate matter and so on and so forth. The other interesting thing about the Clean Air Act is that I think it's section 177 allows other states to adopt California's regulations. And that has happened for a long time with its just conventional tailpipe emissions standards for again, things like docks. And but since California started up with its zero emission vehicle program 20 plus years ago and has really been pushing for automakers to make and sell both battery electric and fuel cell vehicles to date. Actually, I think this is incorrect. I think 10 other states have adopted the zero emission vehicle program because Colorado just joined last year and both Minnesota and New Mexico are on the way. So the Zab states amount to something like a third of the US market for automakers. And I think it's safe to say that they, well, they really don't like that. They don't like the idea that they're selling cars. Here they are, they're global corporations and they're selling cars in the US, one of their biggest markets, not their biggest market anymore. For most of them, it's China, but they're selling cars in the US and there's two standards, one at the state level and one at the federal level. And when the Trump administration came in and California and the feds had achieved, had converged at the time that during, when President Obama was in office, but they had converged on some pretty stringent mileage slash CO2 standards, tailpipe standards. And when President Trump was elected, some of the automakers went to him and said, we really wish that you would not, that you could sort of slow this whole thing down. And he basically said, oh boy, will I ever. And he has really tried to completely reverse what happened under the Obama administration and indeed has tried to revoke California's authority to set its own standards altogether. So they're all off to the courts now. This will grind on for years. And I think that the automakers, some of them are probably really sorry that they ever had that conversation or wrote that letter to President Trump because now they have two standards and they have a lot of litigation before it gets sorted out. So two different industries. One, local monopolies understates supervision, primarily kind of economic regulation. The other federally regulated with this interesting carve out for California and global enterprises. So now they're coming together. So the California Zero Emissions Vehicle Program, which is to date, mainly been enforced in California and is now really being picked up in other states and enforced actively in other states. Again, that's something if you wanna know about it, I can tell you later. But now we have this convergence of these two historically different and very distinct industries. And so we have guys and women who work for automakers sitting in rooms like the one in the top left, which is the auditorium at the CPUC because suddenly the CPUC and other public service commissions, especially in the ZEP states, are really important venues for them because those, the utilities at a minimum have to reinforce their distribution systems in order to serve what will over time be a pretty substantial load. And many utilities and a lot of environmental advocates are eagerly banging on the door saying, we would like to build not just the infrastructure, the distribution infrastructure, but we would also like to, in many instances, we would like to own and operate charging stations because utilities, the other thing that's important about them is while automakers make money by selling cars and even more importantly, lending money people to buy cars, utilities make money by deploying infrastructure and then they get paid a return on their infrastructure. So they like building more infrastructure. And moreover, what they also like is to be close to their customers and to be seen as doing things that are green, particularly in states like the ZEP states. And so for all of those reasons, we've had a number of utilities come forward to their commissions and say, we would like to own and operate charging stations or we wanna be involved in this in some way. And I don't mean to make this sound nefarious. I mean, these are just what their incentives are. And there's a lot of good people who work on this and plenty of people who just appreciate, this is a new electric load and it's our job to serve it and we need to work out how we're gonna do it. So now this is being worked out and all to some extent and almost every state now with three states, I'm gonna talk about gonna zero in on really being in the vanguard. And this is just a colossal headache for OEMs because again, here they are, they're huge global enterprises and it was bad enough that they had to deal with like the feds versus the ZEP states in the U.S. And now they've got 50 states that are each sort of deciding well, we're gonna decide for ourselves how we should use our electric utilities to support transportation electrification. So that's the stage, the stage is set. So the states I'm gonna talk about, I'm gonna zero in on are our home state of California and then New York state, which is historically also a real bellwether state for regulation and then Hawaii, which has really emerged in the last several years is a very interesting laboratory for energy policy and has kind of been a leader in some regards. So just very quickly, the approach, we got started on this in like 2009 in California when the first Leafs and Volts and Tesla Model Ss were heading our way. And the commission and the utilities understood that we had to start doing some things to accommodate that load. And the sort of the prevailing view that really kind of, I would say governed what happened at the CPUC to the extent that you could even say it was sort of a philosophy was essentially let a thousand flowers bloom. Utilities gonna come to us with ideas, we should let them try stuff out. We had pilots that, I call them pilots because some of them were like $100 million, which is not a pilot and really I think anybody's book. And as a result, we had San Diego gas and electric wanting to own and operate charging infrastructure, the whole nine yards. We had different model from Southern California Edison in the Los Angeles area. There's a lot of litigation. And now 10 years on the commission has launched a big docket that they're calling the drive OIR. Where they're trying to work out kind of a comprehensive framework that they're calling the transportation electrification framework. And that would culminate in the direction to the utilities to bring them plans. I'll just say briefly there was a stakeholder mutiny when this 200 page draft TEF as it's called came out. And they said this is way too much work by the time this all gets done and litigated, it's going to be out of date. So they're kind of back to the drawing board and how to do that. New York, that building that looks like it should be in Moscow or maybe Stalingrad is actually the headquarters of the New York public utilities. Or it's anyway, it's on the Capitol mall in Albany. It's really a scary looking place. And they've really come at it from a much more top down view where it's like, you know, they sort of told the utilities to try some stuff. But then they said, like, you know, we're going to tell you what we want you to do. You know, we're going to tell you what role we're going to have. So they had a very kind of what I would call a lean stakeholder process and a few workshops. They got some written papers. They had E3 work on a study for their companion research agency, NYSERDA on cost of benefits. And then they put out a white paper in which they said, okay, this is how we think it should be. Here's our model. And then the third one is Hawaii, where for several years now the Hawaiian commission really been saying to the utility HECO, you know, like basically they put out a decision maybe like seven, 10 years ago when solar was first becoming a big thing. And, you know, and just said like, listen, you guys, you are just from the last century, things are going to be different now. You know, this is how we're going to do stuff. You're going to be more customer oriented. You're going to be more receptive to distributed energy, distributed energy resources, including solar. And then, you know, they hammered on them several more times. And they'd let HECO do a little bit around EV charging stations. They actually did a really cool pilot with Nissan at one point. But when they came back for more, and this was what I would call a real pilot, very small, when they came back for more, the commission said, no, that's enough. We want to see your plan. We want you to go do stakeholder outreach. We want you to come back with a comprehensive electrification strategic roadmap that lays out your priorities for the near term, the midterm and the longterm been up to 10 years, you know, across all the potentially electrifiable technologies. And so I had the privilege to work on that when I was at E3. And the document is available if you go to E3's website or HECOs. And I think it's still really sort of set the standard for one of what one of these plans look like. So anyway, so three of the states, and then so we'll just sort of follow them through. So, to, as you think about an energy regulator really fundamentally there, they're mainly about the money. I mean, a lot of other things have come in the picture, but the PUC again, like it sets the rates that it allows the utility to collect money from its customers to give a return to its shareholders and to, you know, make certain investments that's at its core. That's really what they do. But in places like California and a lot of the other ZEP states, you know, regulators and utilities have been pressed into service to support social and environmental goals and none more. And many of these sort of come under the heading of what we call market transformation. So the idea of taking, you know, a completely new and not yet commercial technology, like in the last decade, you know, renewable energy, and in the current and coming decade, electric vehicles, you know, transforming the market for those to make them fully commercial and, you know, and pump priming. So that's, you know, become a core part of the mission, certainly of the California commission. And I think it's fair to say that, you know, the Hawaii commission and to a large extent, the New York commission understand, you know, that they want to see themselves the same way. So they want market transformation. They want to support their states, you know, EV adoption and greenhouse gas mitigation goals. For sure they care about rates. But the other thing you really care about when they're kind of setting the rules for like who gets to do what and how much the rate payers pay for is they also want competition and innovation. And, you know, they're mindful that the utility is a regulated monopoly, that it has essentially, you know, guaranteed capital recovery. And they have to somehow play this, like do this delicate balancing act to create a playing field in which, you know, new entrants providing, for example, charging services can come in and carve out business models in an industry that really has no natural monopoly characteristics. You can't really say that, you know, EV charging is a natural monopoly like the way that, you know, the buyers portion of the utility is. So what they're trying to balance is like, well, if we have the utility to it, you know, they can go really fast and we can really deploy a lot of charging infrastructure and that helps sell a lot of cars. But then maybe we would snuff out these new entrants who are probably more innovative than the utilities. And really a lot of my work and just sort of thought that I've done over the last 10 years has really been around this core question. And so we're going to see how that's played out in various states. So the last thing I want to say is if you sort of think about the market transformation challenge of EVs from the perspective of the auto industry, of the, you know, the environmental advocates of, you know, generally, you know, the broader community who want to see EVs adopted, we kind of came to the conclusion again in the work that we did with utilities and regulators at E3 is that it really makes sense to frame that conversation around, you know, what are the adoption barriers to EVs? And there have been study after study, a lot of good work out of ICCT in San Francisco, but certainly not limited to them. So surveys and studies on factors that, you know, stand in the way of people buying cars. And typically, you know, they zero in on, you know, people just don't know that much about EVs and they're worried that they can't charge, that there's not enough charging infrastructure. So range anxiety. And today they still cost more than other vehicles and there are some other things. And then from the utility perspective, you know, there's also this question of, you know, how do we integrate this big new load into our grid in particular, our distribution grid where a charging EV can use as much electricity under certain circumstances as a house does today. And so there's that question for them. And then there's the other question. You know, most cars aren't driving most of the time. So can we somehow incentivize people to drive and charge their cars in a way that's advantageous to the grid and particularly helps us absorb solar energy. We did a lot of work at E3 on this. I'll mention. Okay. So when you think about what the utilities role will be, they're really, they're really free models. Although there are four shown here. So model number one is just basically this is a load, like any other load, it's just like a new subdivision, you know, the utilities job is to just provide the service connection. So all the stuff on its own system, you know, the wires, the service drop, the transformer up to the meter, you know, that's their job and that gets, you know, recovered through rates and everything else that's up to the customer. So that's like I said, that's business as usual. The opposite end of the spectrum is what some utilities have asked their commissioners to let them do, which is full ownership. So they basically want to be, they want to both do the upgrade and then they want to offer some sort of a turnkey or concierge service and do everything on the customer side of the meter too, including owning and operating the charging structure. And then case number two is really the in-between case, which is what's referred to as a make ready where the utility does the upgrade on its side of the meter. And then it takes care of kind of the wiring and everything else on the customer side of the meter up to the charging station. Then the customer owns the charging station and has, you know, a separate relationship with some kind of third party company like ChargePoint or EVGO. So those are the models and a lot of the fight about what utilities roles should be and what, how much rate payer money should be spent on EV charging really kind of circles around this question of which of these roles does the utility play. So how's it worked out in our free states? So again, in California, we've let a thousand flowers bloom. So we've tried all the models. So Southern California, which is pictured on the right, that's a San Diego gas and electric facility. They persuaded the commission to let them do this to own and operate a lot of charging infrastructure, primarily at workplaces and multi-family housing in exchange for piloting a very interesting time dependent tariff design, which is actually designed to use EVs to integrate solar power because they have more solar on their system than, than any of the other utilities. So at the other end of the spectrum, Sandy Southern California Edison came into the commission right from the beginning and said, you know, we just really mainly want to do make readies. And you know, we think that will, we think that will work. PG&E came to the commission and said, you know, we want to do everything. And the commission said, no, you can't. And in the end, they ended up getting a primarily make readies approved with some exceptions for disadvantaged communities. That's a DAC and multi-unit dwellings, which have proved to be very difficult to serve. And then there, then there's some pilots. And there has not been a lot of utility money yet. I think PG&E is the exception, but it's really primarily a make ready that has gone into DC fast charging because there's, there's cap and trade revenue and VW under the settlement agreement has been spending a lot of money on that. So kind of a mishmash in California, but I think in this, you know, this docket I mentioned before, the policy docket that's happening now, they're really kind of realizing, you know, that nobody, nobody thinks that it's wrong to do make readies, you know, or everybody thinks it's fine to do make ready. So then it's really more about what are the circumstances in which it's, you know, acceptable for utilities to do more. New York, you know, very different cattle of fish than California, you know, fully restructured state. So the utilities are really principally distribution companies. They, you know, New York, it's the home of the stock market. It's just, you know, it's a very market oriented state. And the commission staff under the supervision of the chair of the New York public service commission wrote this white paper I mentioned and issued it in January. And they basically say, look, you know, there's no reason for utilities to be in the charging infrastructure business or charging service business at all. And we don't want them in it. And we think the make ready model is fine. And we understand that in rural upstate areas of New York, it's going to be difficult to deploy the network of DC fast chargers that's needed to, you know, give people the range confidence to say drive to Montreal. But we think there should be some sort of franchise arrangement for that. It's also the case that New York has this other pot of money that New York power authority gets a lot of revenue from the big hydro plants like at Niagara Falls. And they've been spending some money on DC fast charging too. So, so that's kind of another reason that the utilities don't necessarily need to be tapped for that Hawaii. When we wrote our plan for when we helped. Heco write their. Transportation strategic plan. They really wanted to include it. And so, you know, until it did, I mean, it's their plan, what they called a critical backbone of chargers that they would own. And the way we described it as we want to have all this creative destruction in the charging industry. And, you know, lots of innovation and competition, but we don't want people to ever feel like they're going to be stranded. And so, you know, we don't really know what that means. So they told Heco to go hire a consultant to come up with a model of what it is and navigate, write a report and you can read it. I did not find it all that compelling. And I'm not sure the commission did either because they then issued a yet another decision. And they said, let's just not talk about that critical backbone thing for now. Just go to some make readies and then. And work on the bosses. Because the major cities, particularly Oahu, want to start electrifying buses. So that's the, that's kind of what's going on in Hawaii. So I would say in general, the trend is towards, you know, that the make ready is becoming the principal model. It really gets the utility largely out of the business of being a charging service provider. And the exceptions are going to be around. And so, you know, where we do see different outcomes is for those publicly owned utilities where they don't have a commission to answer to. And they are more kind of a tool. And I mean, that are the best sense of the word of. Typically, the local city government. So you see Los Angeles department of water and power being a lot more proactive. And also see this to some extent the southeast where commissions tend to be more. And it's a lot harder to, you know, to work with them. And so, you know, to work with them. And so, you know, I think that's just a lot harder to jack or, you know, jackhammer things up and so on and so forth. Where we do see different outcomes is for those publicly owned utilities where they don't have a commission to answer to, and they are more kind of a tool. And I mean, you know, you know, you know, I think that's where commissions tend to be more indulgent of what utilities want to do. Okay. So let me talk about kind of quickly go through a few of the other key considerations for commissioners. So California politics are such that. You know, it's really, really important to decision makers in Sacramento to the legislature in particular. You know, you know, you know, I'm very much a, you know, on carbs radar, the air quality board that the rollout of electric vehicles cannot just benefit the wealthy people who actually buy new cars. And that. So we see particularly in California and these big, you know, 100 plus, you know, many hundred multi hundred million dollar decisions authorizing. And you know, you know, you know, I think that's why I think that's why you're, you know, they're going to be percentages in there that, you know, you have to put this much into some vantage communities and that much and, you know, like at least this much and, you know, in multifamily housing. And PG and a, you know, has a program that they're a new program where they're going to actually do sort of like a turnkey service for low and moderate income customers. Now there's a different point of view. That we see more on the east coast, you know, it's like, look, the number of EVs that's going to find its way into low and moderate income communities is going to be really small for a while because, you know, it's really a very small segment of the US population that even buys new cars. And, you know, many people in low and moderate income communities, particularly in disadvantaged communities are buying, you know, maybe not even a second hand car, but a third or fourth hand car. And so it's really not a wise use of the ratepayers money to be building charging infrastructure in these communities to serve what, you know, even if the chargers were there, but probably still be a relatively small number of cars. So the other point of view is like, look, let's just focus on cleaning up the emissions of the vehicles that go through those communities and are located close to them. So the ports, big commercial fleets, freeways. And so that's, you know, the New York White Paper says that explicitly, like, we're, you know, we're not going to designate, you know, we're not going to tell them to go get these things built in low income communities. We're going to focus on cleaning up trucking, trucking in transit. And I mean, I will say, California is doing both. I mean, we lead the country in terms of what we do with ports and transit. So, you know, we have a kind of, I'm going to have one of everything on the menu or maybe even on several and everything on the menu approach. But I think the key thing is that, you know, some of these more market oriented states again, don't see it as, you know, making that much sense to put infrastructure in low income communities. I'm going to skip past this because I've mainly covered it already. But I think the key thing to notice that most of the discussion about transportation electrification to date has really mainly been about light duty vehicles. I mean, when you look at like the carbon emissions, they are where almost all the action is. But if you look at the local air quality impacts, then that's all transit and goods movement. And so you, you know, you get a double whammy and that's why carb is actually moved away, for example, from zero mission bus program. And they now call it the advanced clean transit rule and everything else in this is an advanced clean car, advanced clean truck rule. So we will see a lot more action on that in all the states. And the thinking is by far the most advanced in California. So I want to talk about two final things really quickly. And the last five minutes because I want to have some room for Q&A. So cost benefit analysis, this is something that has been, you know, honed to a very fine point over decades at commissions like the ones in California and New York. And, you know, new investments, for example, an energy efficiency or the decision about should we build this power plan or do the storage thing, they go through the cost benefit analysis ringer. There's been a big discussion about, you know, should we be, you know, applying cost benefit analysis to transportation electrification investments that utilities are making with their customers money. And San Diego Gas and Electric Commission D3 to do a cost benefit analysis for them of the program that I told you about a few minutes ago. And then I don't know if they threw it in the circular file, but nobody looked at it at the commission. They just sort of steamed ahead. They haven't really worried about cost effectiveness at all because their view is look, this is market transformation. We're at the early stage of this market. Why would we expect these investments to be cost effective? You know, we're trying to, we're trying to accomplish something that's, you know, is not really readily priced. On the other hand, you know, with John Rhodes, the chair of the New York commission, when I met with him to discuss some cost benefit analysis that we did for NYSERDA, you know, he expressed a concern that he wants to use the rate payer dollars, rate payers dollars wisely. And I mean, I do think most commissioners, including all the ones in California feel that way as well, but they leaven that wisdom with their concern about market transformation. And, you know, so he wants to be discriminating about which programs, you know, yield more benefits. The Hawaii plan includes some cost benefit analysis, but again, it wasn't really something that was determinative for their commission. So, but again, like the dollars have not really been big in any state yet, except for California. And some states have started to say, okay, when you come back to us utility with a, you know, 100,000, sorry, a hundred million dollar program or something like that, then you're really going to have to prove that it's going to generate benefits, not just for people who own EVs, but for the general body of rate payers as well. And the reason that it would generate benefits for the general body of rate payers as well is that if the charging EVs doesn't require much or any new distribution infrastructure, then you're basically recovering those fixed costs over more kilowatt hours of sales. And if you do some sort of smart charging to shift the charging, you know, for example, to overnight the wee hours, then you're going to use it even, you're going to use your fixed infrastructure even more efficiently. And you can look at these later. These are two charts I pulled out of the wine electric plan. But what they show is that from kind of a regional perspective, if you compare the cost of serving the EV load to all the benefits that are reaped minus the environmental benefits, the big dominant thing is this light lavender bar, which is the gasoline savings. And when you compare those to the cost of making electricity, it's cheaper. I'm sorry, the, the, the lavender, yeah, the lavender is the avoided gasoline consumption. So it's cheaper, but who's getting those benefits? Well, the people who own the cars, the EVs. So the other question is if we compare the cost of serving the load to the revenue paid in the rates paid in by the people who own the cars, does the cost of serving them, is the cost of serving them more or less than what they pay in? And what we found in Hawaii was that it was more than what they pay in, especially again, if they're primarily charging off peak. So this is the kind of thing that commissioners care about, but this is the level at which this has been done so far is purely like, you know, what are the effects of EV adoption per se? The question that's not being asked is, although we did it a little bit in New York, the question is not really being asked so much as like, but how does that compare to how much the utility wants to spend to help make this happen? Okay, last thing I'm going to talk about is, so I just talked about how the benefits to the general body of rate payers are greater when we have smart charging. So we shift charging to off peak hours or we put it, push it into hours when there's a surplus of solar power. There's a lot of different ways that you can do that with rates. There have been a lot of creative rates experimented with around the U.S. I mentioned the one that San Diego pride, that's a time-varying rate that specifically encourages charging at times of day when there's surplus solar. New York had a pilot with a really interesting company called Fleet Karma teamed up with ConEd, and they piloted an approach that basically just paid people a reward if they went the whole month without ever charging during the on peak hours. Hawaii is, again, at the direction of their commission, even as we speak, developing EV rates that are going to have the same, I think, same goal as particularly the SDG and E-rates to use their surplus solar energy. When asked by clients when we, at E3, what rate did we like the best, we always pointed them to this San Diego gas and electric rate. And the thing that we liked about it was that it's a three-part rate. So there's a customer charge to just basically what you charge, pay every month to be connected and have a bill printed and sent to you. Then there's kind of a charge that's associated with kind of the total size of your footprint on the grid, and that can go down. If you spread your load out, even it out some. And then the really interesting thing on there was the marginal cost value-based charge, which varies by hour. So they took the California ISO day head prices and they said, okay, tomorrow is going to be a high solar day. So the price is going to be really low in the afternoon. And we're going to show that to the customer in the hopes that they will choose to charge then. So really interesting example. Again, happy to provide info on all of these. So I will just say the main punchline from this slide is that when we actually looked at dynamic rates, like the one I just described versus standard time of use rates, the dynamic rates really provide a lot more value. And that's because they pick out the days where it's most useful to have somebody move that they're charging around. So they provide a lot more value to the grid. And so that's, that's why we always supported those rates. So that is all I have to say that I have time to say. And I'm happy to take your questions. Great. Thanks very much Nancy. That was a terrific tour de force covering a huge amount of territory. So I'm going to try to summarize a long list of questions. There are several questions that kind of get out. Just probably viewing you as one of the world's expert on all this. Of the states you've looked at which, which ones do you think are doing the best job managing this transition. And are any of them moving as fast as you think. They have to, to achieve the objectives that we all have in mind. You can define whose objectives you, you would like to use as a reference point for that. Yeah, I mean, that's a great question. And it's a really hard question to answer because again, you, you have to think about why do PUCs have the process that they have? I mean, it's all about collecting money from the many to pay for services that everybody uses in various ways to varying degrees. I think to me, a couple of things stand out is, I mean, I like how they did it in New York because, and Hawaii, because both of them were, you know, the commission, I think provided some direction to begin with. And, you know, some, you know, in Hawaii kind of like, this is what you want. These are the questions we want you to answer and how we want you to do it. And it was a pretty compact assignment. It was a very small and uncomplicated place. You know, in New York, they really had a pretty lean stakeholder process and, you know, came out with a paper and said, okay, just file the stuff in your rate cases, you know, and it took them, I think a year and a half to write the paper because they were busy with other stuff. So, you know, and this is a problem, you know, with regulation is that, you know, legislatures and regulators ambitions often exceed their means. Even when I worked at the California commission, I was just blown away by the amount of paperwork and process. It takes to do anything there. And I continue to believe that that's it, it doesn't, like that people can get due process without that much process. And so I guess I would look at those, you know, I like how it's worked out in those other states. So one more. I think it's, it's kind of a collection of many issues. It seems like a lot of the action here has to do as, and you cut it up this way with a charging capacity. So who should own what types of charging capacity? And who should have access to that? You've already talked a little bit about who benefits and who pays, but is there a general, you see different business models coming up where in some places you two, and you actually gave one example of utilities, either could do it or not do it. OEMs could do it or not do it. Municipalities could do it. Third parties could, could own it. Any general wisdom from your perspective on that. If you say you were, and you, you may be doing this for all I know, suppose you were a VC and you were getting a bunch of new business proposals from different people who were going to buy and sell essentially electricity from charging capacity. And so the investment would be in charging capacity. Which ones do you think would make the most sense or do you just need a wide range of possibilities to fit the different circumstances one finds in the different states and sectors. Well, there's a lot of questions wrapped up in that question. I mean, I am a big fan of creative destruction. So, you know, this is why I really have, you know, pushed hard in every jurisdiction where I got to talk to a regulator have always pushed hard for the make ready model because I think essentially that provides a sufficient financial foundation to enable various charging companies to try out different kinds of models for interfacing with customers and, you know, for pricing charging services or packaging up subscriptions. And I think that, you know, and they've all, I mean, I guess the other thing I'll say is that I also think that that free money from the, you know, from the EBSP's point of view, from the charging company's point of view, that free money has to be conditioned to some extent, you know, and that is part of what results in so much litigation is how much it's going to be conditioned. But one of the things that I think California has done and some other commissions are thinking about is that there has to be some kind of interoperability. If like, if the rate payers, you know, the general body of rate payers are going to subsidize your EV charging business, then everybody has to be able to use your station. It doesn't have to be free, but they have to have a way that they can, that they can use it. And so, and they don't have to have a, you know, a key chain with 27 different RFID cards on it. They should be able to call a number or swipe a credit card or whatever. And I think that's, you know, that's, that's important. If there's a part of that question, I didn't answer that you would like me to answer. Feel free to re-ask it. I may, I may, yeah, in a way I may do that because I'm going to parse things a little bit. There are a host of questions on what I would call grid integration, related grid integration issues. And I know you touched on it a little bit, but you know, everything, everything from is the system going to be able to take the increment in total load? Is it going to be able to manage the various loads, you know, between, you know, having more renewables on having charging, perhaps doing veal vehicle to grid trades and so on. How do you see that working? I see people either say it's totally impossible to go very fast or we'll work it out. The whole thing will work. We don't have to worry about, those are just details. If we get everything set up, if we build it, they won't come. Effectively, how do you see that set of issues? Yeah, I mean, this is something that we really looked at a lot from a lot of different angles at E3. You know, at some point, some of you have probably seen someone from E3 present on the pathways model, which is a energy systems model of the entire economy. And I like to start there, you know, in some forums when I talk and, you know, what that shows is that really the new, even with super aggressive adoption of EVs in California, and this would be true anywhere, super aggressive adoption of EVs, and sort of meeting the kind of energy efficiency targets we have that we pretty much have flat load at the system level all through the 2020s, you know, and that was before the COVID economic crisis hit. And then it ramps up kind of gradually after 2030, because at that point, the new cars are very, very efficient. You know, the light weighting has been very successful and so on. So we have never regarded it as a problem for the, you know, generation. So the issue is really primarily at the distribution level. And, you know, if you have a lot of cars really concentrated in a relatively small, you know, distribution area, you know, how do you, how do you serve them? And I think that's the most immediate question. It's, you know, the utilities were all ringing their hands 10 years ago that they were going to have exploding transformers. And, you know, no such thing has happened since then. And what they've spent to accommodate the cars that have been sold to date is pretty modest. But that will become an issue going forward, but it's something that they should be able to plan for. Great. And I think there's some, you know, there's a lot of different technologies to solve that problem. Two more quick ones. If you were advising the utility, which it sounds like you do a lot. How would you advise them to prioritize? You actually did touch on this explicitly, but didn't say too much about it. Would you go for the light duty vehicles for the commercial market for municipal EV fleets? Is there anything, anything, any general guidance in that area? I think it really depends on where you are. I mean, if you're, I mean, first of all, everybody, it's foundational to do something for light duty vehicles. I think unless you're, you know, exclusively serve, you know, an area where people just don't have, you know, if you're like a rural co-op in Montana, that should probably not be your priority. But if there's like a meat packing plant that, you know, trucks go in and out of all the time of the school, then maybe you should think it about the trucks. But if you're, you know, the way they looked at it for clients is, you know, beyond light, you know, light duty, then what are the major, you know, commercial and industrial transportation related loads in your community, you know, has your transit agency decided that they want to electrify their fleet? Or, you know, do you have big, you know, multimodal depots or a port or, you know, so I think there it's all very, you know, very location specific and you really need a custom assessment. One last question that's come up in many of the seminars this quarter from totally different angles is, once you start down the EV road, how long before surprise, surprise, it turns out that fuel cell electric vehicles are actually an even better idea. I guess for you, do you feel the system has been set up away in a way that kind of compromises kind of a path, a lock in pathway problem? Do you think the current initiatives could kind of fit hydrogen fuel cell vehicles or we need something else or are we making, you know, investments that will regret because we should have known that the hydrogen fuel cell vehicles would ultimately beat out the EVs? How do you come out on that set of issues? Yeah, it's a really interesting question. I mean, you know, the airport has really gone out of their way for years, you know, to call, you know, call it a zero emission vehicle program to have a fuel cell path to compliance. You know, they really wanted to figure out a way to finance the, you know, charging or the hydrogen refueling network for cars. They thought they were going to use the low carbon fuel standard to get the refiners to pay for it, but that didn't happen. And, you know, there's a modest number of stations in California and really no place else. And that I think has led all of the major OEMs to just think, well, we got to have an electric player in the game. My understanding though is that the bigger factor is actually in China where they've really gone heavily, you know, electric. And that, you know, that's really the tail that's wagging or it's the dog that's, we're the tail, they're the dog. Great. Well, thanks for a terrific seminar for answering all these questions. So skillfully, I think you just proved my hypothesis that you're one of the few people alive who actually can play three-dimensional chess while roller skating. Thanks. Thanks again. We'll look, we'll look for you on campus here with, particularly with the bits and plots program down the road. As soon as we're all cleared to travel. Great. Thank you. Great. Thanks a lot.