Comment Log Display

February 20, 2024

California Air Resources Board
1001 I Street
Sacramento, CA 95814

RE: ChargePoint Comments on Proposed Low Carbon Fuel Standard
Amendments 

Thank you for the opportunity to submit comments on the proposed
amendments to the Low Carbon Fuel Standard (LCFS) issued on
December 19, 2023. ChargePoint has reviewed the Proposed Regulation
Order and appreciates the work of the California Air Resources
Board (CARB) Staff to implement changes to LCFS that will advance
investment in low carbon fuels and infrastructure in California.  

About ChargePoint

Since 2007, ChargePoint has been committed to making it easy for
businesses and drivers to go electric with one of the largest
electric vehicle (EV) charging networks and a comprehensive
portfolio of charging solutions. ChargePoint's cloud subscription
platform and software defined charging hardware is designed
internally and includes options for every charging scenario from
home and multifamily to workplace, parking, hospitality, retail,
corridor, and fleets of all kinds. 

Summary of comments

•Expand the scope of "less intensive verification" for on-road
electricity crediting to allow for networked charging stations that
meet certain requirements to be pre-approved. Entities that do not
meet the requirements for less intensive verification could still
undergo full verification.
•Remove the exemption for dedicated parking spaces under
multifamily crediting and allow owner/operators to claim credits on
all stations at multifamily locations.
•Regarding the MHD-FCI provision: (1) relax the siting requirement
to within 5 mi of a FHAA corridor, (2) reduce the minimum kW
nameplate capacity to 200, (3) consider shortening the FCI
crediting window to 7 years, and (4) roll unutilized LD-FCI
capacity into the MHD-FCI provision to increase deployments.
•Take greater action to stabilize the credit market, either through
supply-side intervention or more stringent carbon intensity
targets. Increase the step down to 10%.
•Modify the Automatic Acceleration Mechanism (AAM) formula to
trigger once the credit bank exceeds three-fifths of the prior
year's deficits, instead of three-fourths.





Requirements for less intensive verification 

The inclusion of on-road electricity crediting in the verification
program is not a small lift and needs to be done thoughtfully.
Therefore, we suggest CARB consider putting off including
electricity verification in this rulemaking given the many other
issues being considered. However, if CARB believes that on-road
electricity reports must undergo third-party verification under the
amended regulation due to largescale risk of misreporting (which to
our knowledge, there is currently no evidence of), CARB should lean
on existing technology, standards and relevant regulations when
designing verification. To that end, we appreciate CARB's inclusion
of a "less intensive verification" pathway in the proposed rules
but believe that this does not go far enough. The less intensive
verification pathway should be expanded to consider the following:

The EV charging network is fundamentally different than the
traditional point-source liquid fuel supply network: whereas liquid
fuels originate from fewer and larger sources (refineries), EV
charging stations are significantly more disaggregated, where each
point (or charger) in the network represents a small amount of
potential fuel supply which renders physical site visits across the
whole network impractical and costly. For meter accuracy assurance,
CARB should instead lean on accuracy thresholds that already exist
in the industry, such as those within the California Type
Evaluation Program (CTEP), which require that level 2 (L2) EV
charging meters meet an accuracy threshold of ±1% upon
manufacturing and calibration and ±2% over its useful life, while
level 3 (L3) meters must meet a ±2.5% accuracy upon manufacturing
and calibration and ±5% over its useful life. The CTEP standard is
already being utilized by the California Division of Measurement
Standards (DMS), the entity tasked with ensuring the accuracy of
commercial devices, including EV charging stations. DMS sets
standards to promote fair competition and ensure consumer
protection and points to the CTEP as the metrological accuracy
standard that chargers installed after a certain date must meet to
be used for commercial purposes. County Weights & Measures offices,
under the guidance of statewide rules established by DMS, serve to
enforce the standards by conducting periodic site visits to verify
the accuracy of fueling stations.

Recommendation: CARB should pre-approve charging stations that meet
CTEP's meter accuracy standards for participation under the less
intensive verification pathway.
 
Pre-approval would mean exempting eligible charging station models
from site visits and third-party meter testing  based on that
model's meter accuracy substantiation. CARB could publish a list of
exempt charging station models that meet CTEP's meter accuracy
standards for credit generators' reference. This is similar to the
approach taken under Canada's national Clean Fuels Regulation.
Otherwise, the existence of the DMS framework for assessing and
enforcing charger accuracy would render additional site visits and
meter testing, even only in half of the years as currently proposed
under the "less intensive verification" pathway, under the LCFS
program duplicative and punitive on the industry, particularly for
small owner/operators .

With assurances around charging station meter accuracy ensured by
the accuracy standards embedded in CTEP, the final step to less
intensive verification would be a "desktop" review of the data in
the reports. The scope of the desktop review would be to ensure
that the data in the quarterly reports submitted through the LRT
matches the data that was output from the charging network. EV
charging networks are underpinned by extremely accurate (down to
the watt-hour), real-time data in a way that traditional liquid
fuel networks are not . Networked EV charging provides a near
constant stream of data that can be verified against reported
charging activity. 
There are a number of standards, practices, technologies and
processes charging network operators adhere to to ensure the
accuracy of data. For example, ChargePoint complies with several
standards to ensure that the data reported by the station maintains
its accuracy as it is transferred from the station to the cloud,
and that any data anomalies are detected and removed before being
reported. Many network operators also maintain compliance with
Payment Card Industry Data Security Standards (PCI DSS) to ensure
an accurate and secure environment for network transaction data.
CARB could pre-approve networks that meet certain standards for use
under the less intensive verification pathway, similar to
pre-approving charging station models based on meter accuracy.
Standards and documents required for pre-approval could include
SOC2 reports and/or PCI certification. 

Our recommendations for the less intensive verification pathway are
not necessarily meant to be prescriptive, but rather to point out
how existing technologies, best practices, and standards already
widely adopted in the industry should be incorporated into the
pathway. This will greatly minimize administrative costs for an
industry that is still scaling. This is also the general approach
taken under Canada's national program. We urge CARB to not try and
reinvent the wheel re: on-road electricity verification. Reporting
entities that do not meet the requirements for less intensive
verification would still be able to undergo full verification.

Credits for non-residential chargers at multi-family residential
properties.

ChargePoint strongly supports the proposal to allow FSE owners to
generate credits for stations installed at multifamily properties.
This change will create more revenue opportunities for property
owners that install chargers at multifamily locations, and
critically, incentivize more deployment of chargers for residents
of multifamily homes, a market segment that has historically lacked
investment. 

Recommendation: remove the exemption for dedicated parking spaces
and allow owner/operators to claim credits at all multifamily
locations.
 
While we fully support the proposal to treat multifamily crediting
the same as non-residential, we do not agree with the proposal to
treat chargers in dedicated parking spaces differently. Not only
will the exclusion of restricted parking spaces be extremely
difficult to track, but it also arbitrarily distinguishes credit
generation based on a residence's parking arrangement. Recent
analysis by the CEC indicates that expanding the range of charging
options available in the parking lots of multifamily housing will
ensure charging is not a barrier to EV adoption.  Increasing home
charger access for residents of multifamily homes must be a
priority to equitably meet the routine charging needs of more EV
drivers, and for this reason, we strongly support this change by
CARB. 

Residents of multifamily housing are generally not able to install
conventional home charging without financial assistance from the
building owner. This is because charger installation at
multi-family properties often requires upgrades to shared
electrical panels and running conduit across common parking areas.
A single household of a multifamily residence is generally unable
or unwilling to shoulder the high cost of charger installation
themselves. In other words, there is a "split incentive" affecting
multifamily properties in which a property owner must pay for and
organize installation, while the chargers may only benefit the
fraction of residents who drive EVs at the time of the upgrade.

In fact, there is a case to be made that chargers in dedicated
multifamily residential parking places may have the most impact on
those residents switching to electric and should therefore be
supported by the LCFS through the ability to generate value from
credit generation. This is especially true considering CARB's
proposal to redirect funds from the Clean Fuel Reward (CFR) program
towards MHD EVs (which we also strongly support). Whereas before,
CFR value was generated by residential (including multifamily)
charging so it made sense to return some of that value to
individual EV drivers via LD EV rebates. If CFR value will now go
towards MHD EV rebates, it only seems right to allow
owner/operators of multifamily chargers to retain the value of the
LCFS which can help finance or buy down the cost of the station. 

Medium and heavy duty (MHD) Fast Charging Infrastructure (FCI)
credits

ChargePoint strongly supports the addition of the MHD FCI
provision. While the passage of the Advanced Clean Fleets and
Advanced Clean Trucks regulations are expected to create greater
demand for MHD EVs, infrastructure development to support these
vehicles remains economically challenging due to the lack of MHD
vehicles on the road today and the expectation that it will take
time for the market to grow. The expansion of FCI credits for both
private and shared MHD FCI is a much-needed intervention to
commercialize charging infrastructure and help stimulate investment
for this segment. ChargePoint also appreciates the inclusion of
shared private fleet chargers in this program. Nonetheless, a few
revisions to the rules for MHD FCI credits will allow the program
to support the nascent MHD refueling market more effectively.

Charging hubs for MHD vehicles are likely to require several
megawatts of power for each site. These projects will in most cases
require significant distribution grid upgrades by the utility. Due
to the complex factors that inform site selection for MHD charging
sites, including but not limited to access to travel corridors,
proximity to vehicle routes, distribution grid capacity, and land
acquisition, it remains unclear which locations will be the most
efficient to locate private or shared MHD charging hubs. For this
reason, overly narrow location requirements for MHD FCI sites may
impede development by eliminating projects that would otherwise be
ideal due to ample grid capacity. While we understand CARB's intent
for the FCI program to focus charger deployment in alternative fuel
corridors for the purposes of accessibility and equity, station
owners and drivers would benefit from less stringent geographic
limitation.

Recommendation: relax the geographic siting requirement to 5 mi
from a FHAA fuel corridor to provide flexibility for site
selection. 

The amendment proposal establishes a minimum power level of 250 kW
for chargers serving sites that receive MHD FCI credits. The
minimum power level established for MHD-FCI sites should consider
today's MHD fleet needs, as well as the anticipated needs of the
future. For most MD vehicles on the road today, 200 kW is more than
sufficient for the vehicle's needs and helps lower overall system
costs (relative to 250 kW or greater).  Therefore, ChargePoint
recommends that CARB reduce the minimum power level for each
charger serving MHD FCI to 200 kW, as this minimum is sufficient to
meet the market where it is today, as well as accommodate the needs
of coming MHD vehicles. 

Recommendation: reduce the minimum kW eligibility requirement to
200 from 250.

Regarding the MHD-FCI crediting window, while some sites will need
a 10-year window to recoup capital costs, a longer window could
encourage overbuilding and disincentivize utilization in the short
to mid-term, both of which are not ideal for the market. We believe
a crediting window closer to 7 years will suffice for the majority
of projects and encourage sites to build for utilization sooner
rather than later. This should also free up more capacity under the
MHD-FCI cap sooner which will open up capacity for more sites over
time.

Recommendation: consider shortening the MHD-FCI crediting window to
7 years.

The CEC reports that as of 2023, California has over 9,000 DCFC
ports in operation and is ahead of schedule to meet its port
deployment target of 10,000 ports by 2025.  ChargePoint believes LD
FCI revenue has successfully accelerated investment in the market
for public DCFC and is partly responsible for the state's success
in this segment. When paired with the continued growth of LD EV
sales in California, it seems clear that continued investment in
LD-FCI can sustain itself without greater support from FCI credits.
By contrast, the MHD segment would benefit from greater FCI support
because it is underdeveloped relative to the state's goals. The CEC
estimates that by 2030, California's 155,000 MHD EVs will need
about 114,500 public and shared chargers. 

To further accelerate the market for MHD electrification, we
recommend CARB rollover any unused LD-FCI credits into the MHD cap
to allow for greater investment/deployments in this segment (more
on this below).
 
Revised Clean Fuel Reward Program

ChargePoint supports the proposal to redirect funds from the CFR
program to make MHD EVs more cost-effective. The current framework
of allocating CFR funds towards LD EV rebates has long since lost
efficacy as the rebate amount is not salient to prospective EV
drivers to the point where it induces additional purchases.
ChargePoint is pleased to see this change as the current state of
the MHD EV market is more in need of funding than the LD segment.

Light duty FCI credits

The proposed regulation establishes a transition plan to reduce FCI
crediting available for LD DCFC applicants. Among other changes,
the proposal amends the cap for LD FCI credits to 0.5% of prior
quarter deficits, a reduction from the previous cap of 2.5%.
ChargePoint supports this change and agrees that LD-FCI credits
should be capped to no more than 0.5% to focus infrastructure
crediting on the more nascent MHD EV market. As discussed
previously, ChargePoint believes MHD-FCI should be the priority and
recommends CARB consider further reduction in the availability of
LD-FCI credits in favor of a higher cap on MHD-FCI credits. 

Should the LD-FCI pathway remain open beyond 2025, ChargePoint
believes it would be premature to limit eligibility to stations
with a nameplate capacity of 150 kW or more in light of the other
proposed changes to the pathway. A station capacity minimum of 150
kW combined with the change to how FCI charging capacity is
calculated as well as the extension of the crediting timeline to 10
years will together incentivize overbuilding sites without regard
to utilization solely because of FCI credits. 

New carbon intensity benchmarks

In the weeks following CARB's release of its amendment package in
mid-December, the spot market for credit prices declined ~20%
(falling from $70/credit to a low of $57/credit). In that time, the
market incorporated CARB's proposal of a 30% carbon intensity (CI)
target by 2030, along with the proposed changes to the supply side,
and determined that this market will continue to be oversupplied.
Without more ambitious CI targets and/or clearer steps to curb
biofuel production with uncertain greenhouse gas benefits (Murphy &
Wook, 2024) , it is apparent that this market will continue to be
oversupplied and credit prices will remain low for the foreseeable
future. 

In prior conversations with CARB staff, we have come away with the
understanding that CARB assumes the LCFS program, and the potential
revenue it affords, does not factor into investment decisions for
EV project operators (fleets, charging operators, etc.) and
therefore investment in EVs and charging infrastructure is agnostic
to LCFS credit prices. We do not agree with this assumption.
Advanced Clean Cars, Advanced Clean Trucks, and Advanced Clean
Fleets do not directly address or fund charging infrastructure. The
LCFS program can, and often does, provide an important revenue
stream for EV project operators and can be the difference between a
project penciling or not. Project developers, operators, and
investors in the EV space operate similarly as those in other
spaces: they evaluate all available costs and revenues when
assessing a potential project and often make decisions based on
expected net cashflows. The difference between expected 5-year LCFS
revenues on a L2 station with roughly average utilization in a
world where credit prices hover in the ~$60/credit range vs
~$150/credit is significant. In the former, expected 5-yr LCFS
revenues do not amount to enough to influence the business case,
whereas in the latter, LCFS revenues offset a significant portion
of the cost of the station and can even be leveraged for project
financing.

As electrification has the most potential for long-term deep
decarbonization of transportation, we urge CARB to account for the
impact that sustained low credit prices may have on transportation
electrification investments. Without clearer steps to limit
crop-based biofuels - or specific carve outs for on-road
electricity credits, like how some state Renewable Portfolio
Standards set specific carve outs for solar - investments in
charging infrastructure and electric fleets will be crowded out
under the program by the continued surplus of biofuel credits in
the market. 

Recommendation: in lieu of some sort of cap on crop-based biofuels,
we believe the 2030 CI target needs to be increased to 32.5% to 35%
and the stepdown needs to be increased to 10% to raise price
expectations to the level needed to usher in more investment.

Automatic Acceleration Mechanism (AAM) 

ChargePoint supports the proposal to establish the AAM but
recommends that CARB make the mechanism stronger. As proposed, the
AAM would not have been triggered in any of the years after the
2018 amendments. These years include 2022, a year when the credit
market price declined by ~50%.  The AAM should be designed
specifically to counteract this type of negative price movement, so
a mechanism that would not have reacted in 2022 is not strong
enough.  

To strengthen the mechanism, we recommend that ARB amend the first
condition of the AAM to be reached when the cumulative credit bank
is greater than three-fifths of the deficits generated over the
same calendar year rather than the current condition set at
three-fourths. With this update the AAM would have been triggered
in 2022 but not any of the other years following the 2018
amendments. Since these other years saw price increases or modest
declines, the new threshold suggests a balanced mechanism that
reacts only to large price decreases. 

Conclusion

ChargePoint appreciates the opportunity to submit comments to CARB
on the Proposed Regulation. We stand ready to work with CARB Staff
to implement the changes discussed in these comments, particularly
to ensure that the process of verification is administratively
efficient for the on-road charging market. 



Respectfully,

Evan Neyland
Senior Manager, Carbon Markets