REU Electrification

REU Electrification: Audio automatically transcribed by Sonix

REU Electrification: this mp3 audio file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.

Katie:
I'm Katie.

Steve:
And I'm Steve. And welcome back to another City of Redding podcast. Is Redding ready for Electric Vehicles? And what about the move toward all electric appliances? The answers are complicated, but essentially, yes, Aayu is ready now and is planning for the future. Today we talk with Lisa Kassner, Electric manager of Resources, about why moving to electric is a good option for some in our community, especially with gas prices remaining high.

Katie:
She also talks to us about what it looks like to make the switch to electric appliances and the rebates available for families looking to make that change. Lisa's goal is not to get every family to switch completely to electric, but to provide options that both align with state and federal mandates and the growing trend towards more sustainable fuel sources.

Steve:
And since we mentioned sustainable resources, Lisa gives us a rundown on how Rewe is sourcing their electricity from sustainable wind and solar, meaning that using power is clean energy. We hope this episode makes you proud of being a part of a locally owned electric utility.

Lisa Casner:
I'm Lisa Casner. I am a long term resource planning manager for the city's electric department. One of the things that our group is most responsible for is the integrated resource planning. So we're looking at a resource plan that goes out 20 years and doing load forecasting and modeling.

Katie:
Thank you, Lisa, for being on the podcast with us today. Wow, it sounds like you do a lot for Rewe and I know Rewe is a big I mean, it's small, right? It's small in terms of the number of people that work there, but it's big in terms of what it actually does in our community and for our community. And so for the purposes of today's conversation, we're talking about electrification and electrification rebates and how are you is starting the conversation with our community about what it looks like to transfer from, you know, gas powered or fossil fuel powered sources to electrified sources. So to start the conversation, maybe you can tell us what is electrification and why is it important for our community.

Lisa Casner:
Yeah, definitely. You kind of hit it right there. Electrification, at the most simplest explanation is that it's just the switching from fossil fuel technologies to the technologies that use electricity. So, for example, switching from a traditional internal combustion vehicle to an electric vehicle or from a gas water heater to a heat pump water heater. So it just means using a technology that's fueled by electricity versus fossil fuel. Electrification is really important because in California, for the last probably 20 years, we've had a huge push for energy efficiency. So reducing consumption, conserving energy. And that has been the way California has been trying to reach its carbon emission reduction goals. But once we reached a certain saturation, I mean, people already conserved as much as they could. How do we continue to reduce emissions at that point? And the answer is electrification. As California becomes more renewable and we have more renewable energy on the grid, switching from a fossil fuel technology to an electric fuel technology allows the consumer to reduce carbon emissions exponentially compared to just reducing consumption. And that's really the direction that the entire state is moving. So it's it's not just you. It's all of California and other states are jumping on board as well. I think California usually kind of leads the way with the renewable energy advancements. So really just setting the stage for the rest of the nation.

Lisa Casner:
One of the things that we did, I think that's a little bit unique is we went through and did a full analysis of all of our customer programs, which were all at the time energy efficiency programs. And this was in 2021 that we did this and we called it our demand side management Integrated Resource Plan, or as we refer to the DSM ERP. The purpose of that analysis was to look at our programs and really determine if they were cost effective at reducing carbon. It turned out that all of the electrification programs were cost effective, but the energy efficiency ones weren't really cost effective for our customers. To kind of break that down a little bit more, we looked at how much we were paying in comparison to the carbon reduction that we were getting from those rebates that we were offering. So where we would offer a rebate for lighting or appliances, we would get a really minimal carbon reduction, but we'd have to spend a lot of money to get that. In addition to that, we were basically paying our customers to use less of our product. And any time we do that, it creates rate pressure. So we really changed our programs and changed our focus and started driving toward electrification as the most cost effective way for us to reduce carbon and promote that to our customers.

Steve:
And Lisa, when you say carbon reduction, can you explain? Out a bit. What do you mean by carbon reduction?

Lisa Casner:
Yeah. So whenever we're burning fossil fuels, we're emitting carbon. If we can reduce the consumption of fossil fuels, we can dramatically reduce the carbon emissions resulting from that. Like I kind of mentioned earlier, in California, there are a lot more renewables on the grid. And in Redding specifically, we have wind power that we contract for. We have hydropower from the Central Valley project, including Shasta Dam. And with all of these resources in our portfolio in 2021, we were about 80% carbon free. So customers who are using our power to electrify are significantly reducing the carbon emissions.

Katie:
And Lisa, are these carbon reduction goals, are these set by the state of California? Does you come up with these? I mean, what's the incentive for you to reduce carbon anyway? Yeah, that's a.

Lisa Casner:
Really good question. So in terms of customer programs specifically, not so much, but on the bigger, broader spectrum, the state requires utilities to serve 60% of its retail sales with renewable eligible renewable energy by 2030. There are certain technologies, certain what we call resources, which would be like solar or wind, hydro that are eligible renewable resources. And we're continually evaluating our portfolio, making sure that we're meeting those interim targets to get to that 60% by 2030. Mark So as a whole, Redding Electric utility has goals that it has to meet or requirements mandates that it has to meet for renewable energy. And that's just passed down to the customers in the sense that our portfolio is already very carbon free in comparison to other utilities in the state. And we have a high percentage of renewables on our grid already.

Steve:
I'm curious to Lisa, I mean, we've talked with our director, Nick Zettl, in the past about the importance of being a publicly owned utility versus a for profit utility. I could imagine a situation in which a skeptic might say, of course, Rue is going to say electrification is the way of the future because they're the electric company and they want you know, they want everything to be electrified. So you've talked a lot about the carbon emissions and some of the benefits that come with that, but what do you say to those community members who maybe are skeptical of this whole push towards electrification?

Lisa Casner:
Yeah, I mean, I get it in Redding, we're a little bit slower on the uptake of electrification than some other areas in the state, and there are some good reasons for that. Our weather patterns are a little bit more extreme than some other areas. So when we're talking about driving electric vehicles or implementing electric appliances, there, there is a hesitation and I understand that. And the one thing I would say is there have been such tremendous technology advancements that the electrification measures are not what they were in the 90 seconds. You're not talking about the same heat pump, air space heating that we had in those days. There have been so many advancements. What I would say to somebody who is still unsure is there are a lot of cost savings to the customer when switching to electric measures. So I don't think anybody would disagree that gas prices are through the roof right now. They're not projected to get lower. I mean, once once that ceiling kind of hits, it usually continues trending in that same pace. So we expect that gas prices will continue to increase. The savings over the life of the ownership is kind of what we look at when we're measuring these things. So with an electric vehicle, for example, it costs more to invest in an electric vehicle.

Lisa Casner:
But when you look at the total cost of ownership, when you remove that trip to the gas pump and the I mean, I just filled up my car, it was over $100. I think I stopped when I got to 100. When you start swapping that over to electric, the savings is it's a lot. And it depends on what kind of a vehicle you're switching to or from. But there are a lot of savings there. You don't pay as much for maintenance with the vehicle. You're not having to do oil changes. So there are a lot of benefits to it. And then in addition, you're powering it using our clean power, which is 80% carbon free already, and helping to further reduce emissions. So like I said, you know, there's technology advancements even with induction cooktops and they can be a lot safer. So it's not just are you trying to increase its electric sales? Actually, we're looking at electrification forecasts and it's going to significantly impact our load. So we are working right now on ways to try to mitigate that plan for that. It's a blessing and a curse. In a way. So it's not something that we're just doing to try to boost up our sales. It's actually beneficial for the customer and that's really what we're looking at.

Katie:
Can you talk to us about the rebate system for EVs? How does that work? What rebates are Redding residents eligible for? Where can they find more information about that?

Lisa Casner:
There are so many incentives available for people who want to switch to electric vehicles, and that's for battery electric vehicles, as well as plug in hybrid vehicles. So there are local incentives, state incentives, federal incentives, and it's a lot of information. So the city of Redding actually has an EV website where we try to kind of bring all of that together so that our customers can go to one spot and find everything that they're looking for. One of the tools that I find most helpful it's on Choose Tv.com, which we have linked on our website, is a cost savings calculator. So you can actually go in and and put in information for the vehicle that you're driving now and then put in the information for the vehicle that you're thinking about buying. And it will tell you what the gas savings is per year based on your local utility rate, what your five year savings would be. So there's a lot of great information out there. We also link to a website called Plug Star that has a shopping assistant. So you can go and put in criteria like how many people are in your family and how many trips you take per year and how far you commute on a daily basis and what your budget is. And it'll recommend vehicles for you. And then another nice thing about that site is it will actually tell you all of the incentives that are available to you. When we talk about incentives, it's a little bit tough to say because it's so dependent on the vehicle that you're looking at, whether it is a full battery electric or a plug in hybrid.

Lisa Casner:
And then also based on your income, there are different incentives that are available. So for us at Rewe, we actually joined the state's low Carbon fuel standard program a couple years ago, and we did that because the state was allocating credits for the saturation of EV charging in your territory. So we call them base residential credits. So we opted into the program so that we could receive these base credits, we can monetize them, sell them in a at a quarterly auction. And the money that we get from that program has to be reinvested into transportation electrification programs that benefit current or future EV drivers. Another caveat to the program, though, is that we have to allocate a certain percentage of that funding to income qualified customers or disadvantaged areas. In Redding. As you can probably guess, we don't have a very high saturation of electric vehicles, so the credits that we get are somewhat limited, and that means that the funding that we get from the program is also somewhat limited. Part of the funding has to go toward the state's clean fuel reward program, which gives an incentive to every person who buys an EV in California, regardless of income. So right off the bat, we have our LCFS credit revenue. We take 20% and give that to the CFR going up to 25% this year. So 25% comes right off the top for the Clean Fuel Reward program. And what's left is what we have for our electric vehicle programs. And it's not a lot. So because we were already contributing to the CFR, which was independent of income, we decided to focus our programs on our income qualified customers.

Lisa Casner:
We felt that would be the best impact for the money that we had available. With that, we did a customer survey earlier last year and the customer survey, we asked our customers, What's stopping you from buying an EV? What would be most effective? Is it a rebate? Is it a point of sale voucher type of coupon rebate, something like that? Is it a bill credit? And most of our customers responded saying that they would like to see a voucher or point of sale type of rebate. And most of our customers said that we should focus our money on low income customers. We used that information to develop a program where we're giving $3,000 off of the purchase or lease of a new or used battery electric or plug in hybrid vehicle. The income requirement for that is based on Shasta County's median income, and the funding for that program comes directly from the Lcfs program. That's kind of how we went into designing our electrification programs. That is a specific example for our transportation electrification for electric vehicles. But we do also offer programs for building electrification as well, in addition to. The residential electric vehicle rebate. We have a commercial EV rebate that goes to promote the installation of EV charging because we recognize that if we are promoting electric vehicles then we need to also have infrastructure in the community to support and supply fuel for those. So they kind of go hand in hand and we're really excited about the programs and excited to be able to offer this to our customers.

Steve:
On the EV front here in Redding, some folks have solar, some do not. I always find it curious What's the current rate for someone who's contemplating purchasing an electric vehicle, whether or not they have solar? What does that equate to nowadays compared to like price per gallon at the pump? Like, if I don't have solar, is it still financially feasible for me to do EV? Is it is it a cost savings if I'm just trickle charging at home?

Lisa Casner:
Yeah, absolutely. That's a really great question. And so like you said, I like to kind of tie that to dollar per gallon equivalent what you would pay if you were, you know, if you saw a gas pump going and it was racking up, what would that look like per gallon? And again, this is somewhat dependent on the make and model. Just like if you have a gas vehicle and I have a gas vehicle, we get different mileage per gallon. The same is true for electric vehicles. And it's based on some other factors like the size of the vehicle, the weight of the vehicle, the size of the battery. So typically, an electric vehicle will get 3 to 4 miles per kilowatt of the battery. So if it's a 50 kilowatt battery and it gets four miles per kilowatt, then your range is 200 miles. What we look at for our reuse rate is it's $0.15 per kilowatt hour. So when you're charging your vehicle at home, you can expect to pay the equivalent about $1.10 per gallon. You're looking at depending on the gas prices at the time, a quarter of the price that it would cost you to run a gas vehicle. One of the other great benefits that I think is often overlooked with electric vehicles is the convenience factor. I always have to stop for gas at the most inopportune times and I run my tank way lower than I should. But if you have an EV and you can just plug it in in your garage and it just becomes a habit, you pull into the garage at night, you plug it in, you leave the next morning with a full tank and you don't have to really worry about it. So I think that's kind of one of the major benefits of having an EV that's sort of overlooked. So that's a that's a great benefit. And then, yeah, like I said, it's about $1.10 per gallon to charge the vehicle.

Katie:
Awesome. That's encouraging for people who are thinking about EVs or wondering about how solar affects that. I wanted to switch gears a little bit and talk about the electric grid itself, because we've you know, we've heard the news stories and I think everybody's a little concerned about, okay, if everybody switches to EV, how is the electric grid going to handle that? And since you're for long term forecasting, what's your opinion on where we stand today with the electric grid and where it's going in the future?

Lisa Casner:
Yeah, that's a great question. And I don't think that the flex alerts that came out this summer really helped with that concern. And it is a real concern. My personal opinion is that California is trying to move to a higher saturation of renewable energy too quickly. And the problem with renewable energy is that it's only available when the sun shines or when the wind blows. So until we have advancements in storage for the grid to be able to store that solar power to use at a peak time when people are getting home and plugging in their vehicles, we need to keep other sources of generation online until we get to that point. But with that. So that's kind of the the overarching like California grid issue, I would say. But looking specifically in Redding, our system is really robust. When I refer to that. I mean, our distribution system is really robust. When it was built, it was built basically double the capacity that it needed to be to serve Redding because at the time that it was built, there were projections saying that we were going to have so much load growth, there was going to be population growth, and we were going to be at 200,000 people by today, and that never materialized. But our grid was built in Redding to accommodate that. So we have a really robust infrastructure system here and we also have a lot of energy resources and capacity.

Lisa Casner:
We have Redding Power Plant that provides the majority of the power that we need, and we also have other renewable contracts. Like I said earlier, we have wind contracts and hydro contracts, so we have enough energy to support that. But we also are doing electrification forecasting. So this last year we hired a consultant that developed a forecast to look at what is the impact going to be. If electrification trends continue and we looked at that out through 2045. So it does dramatically increase our customer demand or what we refer to as load. And we're looking at how we need to change our resource plans and bring more resources on in the later years to accommodate that. So where we really see an uptake, the requirement in California starts in 2035. After that, there will be a ban on the sale of new gas vehicles. And when we're looking at our load forecast over the next 20 years, it's in 2035, around that time frame that we really see an uptick in electrification adoption. So in that time frame is when we will be in the long term resource planning group looking to bring in new energy resources to serve that load. But really up until then, Redding system is already in a really good position to be able to handle that. We operate in a different I'm going to try to say this without getting too technical, but Redding operates in a different balancing area than the rest of Southern California and the Bay.

Lisa Casner:
The that part of California is in what's called the California independent system operator balancing area. And when the flex alerts were coming out, it was really from that region and we had extra supply that we were able to send down there to help mitigate some of the shortages that they were experiencing. So Redding really operates on a it's almost like it's on a different grid in a way. So we didn't have the energy supply issues. We were not issuing flex alerts that didn't apply to our customers. So, you know, to try to put that into perspective, we use grid is really reliable. It's something that we really focus on. It's one of the main criteria when we do integrated resource planning. It's one of the very top issues that we look at and that we plan for is to maintain a very high level of reliability. And I think with electrification that's even more important. So we want our customers to know that we never plan for rolling blackouts and brownouts. We plan to have the most reliable grid that we possibly can and understanding that if we're going to ask people to switch to electrification measures, we really need to put money behind that, invest in that and make sure that that is one of the pillars of the foundation that we are building.

Steve:
So, Lisa, on that topic of electrification, we've talked about the electric vehicles specifically, but I know there's some other elements of electrification that Rue is focusing on both rebates and otherwise. Maybe you could talk through some of those. I know there's some household items like water heaters and water pumps and even electric bicycles. So maybe just talk us through a little bit of the additional electrification elements of this program. Yeah.

Lisa Casner:
So we are offering a lot of different building electrification measures. There are several that we evaluated and we kind of started with what we thought were ones that were easiest to implement, easiest for customers to implement. And as time goes on, we'll continue to roll out new electrification programs. But starting out, we have a water heater, electric water heater rebate. We are offering a rebate for electric clothes dryers. And then in addition to that, we're offering some residential new construction electrification rebates where if you install electric measures in new construction and that includes single family multifamily or accessory dwelling units, which is great because so many accessory dwelling units are being built now as a result of housing shortage and baby boomers. So it's a great way to incentivize electrification of those accessory dwelling units as well. And I think that's a great benefit to customers. So we're really excited to be offering those. And those are measures that provide what we call it's a total cost savings. So when you're looking at, for example, the residential new construction electrification rebates, if you were to look at what the utility bill would be for a typical residential home and then compare that to one where you had electrification measures, what you would see is a reduction in like a PGA gas bill and you'd see an incremental increase in your utility bill.

Lisa Casner:
But when we evaluated the programs we were offering, we still made sure that the total cost was a reduction to the customer. So when you compare the increase in your utility bill to the decrease in your gas bill, you'll still see a savings for the participant there. So like I said, it's an overall. Cost savings when you're switching to those electrification measures. And we didn't offer any programs that didn't pass that test. So if it was a measure where it wasn't as energy efficient and you let's say you switched from a gas to electric appliance or technology and that appliance used more energy and it increased your bill, then it didn't pass our test. And it's not a program that we're going to offer. We only developed and offer programs that actually reduce the cost to the customer.

Katie:
And Lisa, are those programs income eligible as well, or are those open to anybody?

Lisa Casner:
Those programs are open to anybody. The reason why the electric Vehicle program and the E-bike program are income qualified is because we use that low carbon fuel standard funding source. But we actually are required to hold back a percentage of our retail sales to be used for public benefits programs. So the remainder of the programs, when you see building electrification programs, those are all funded through the public benefits funds that we're required to collect from our customers. So it's a different funding source and we're able to offer those without an income qualification component.

Steve:
And I know, Lisa, folks can go to cityofredding.org/rebates to find out information about these rebates you just talked about. But sometimes the process of trying to actually get or obtain the rebate can be quite painful. What does it look like through the process? I mean, in addition going to the site itself, what do people have to do to find out if they qualify for some of these, but also then be go through the process of actually getting that rebate?

Lisa Casner:
Yeah. So we actually have an online portal where people can complete their rebate applications and we try to make it really smooth and seamless for our customers and provide as much information on the website as we can. But one thing that I would always suggest is we have really educated and qualified customer program staff here at Rewe who are available to answer any of your questions. So if you're looking at the rebate page and you're just not quite sure if it's something that you qualify for or if the equipment that you're looking at purchasing meets the qualifications of the program, please do not hesitate to reach out to our staff. They are more than happy to help. It's what they do. It's what they love to do. Answer any questions so you can call any time. You know, send an email. Just stop by the office however it works for you. But please feel free at any time to reach out to our staff and ask any questions that you have. And they're more than happy to help. And I guess.

Katie:
As we're talking through rebates and how people apply, people may still be on the fence about this whole thing, and you've covered some of the reasons why they should consider this and some of the benefits to this program. But what are some common misconceptions that you hear from people about going electric?

Lisa Casner:
Yeah, I think some of these we kind of touched on a little bit, but probably one of the biggest things is that it costs too much. And one of the reasons why we offer rebates and vouchers is to try to help with that initial investment. But if you look at the total cost of ownership, so maybe it cost a little bit more to get into that technology to make the initial switch. But if you look at the ongoing cost savings, it really does add up over time. So with that, I would also say that technologies are becoming more affordable. For example, you know, when EVs first hit the market, there were a lot more expensive and now we start to see them come down a little bit more in line with the cost of a gas vehicle. And then when you add in the rebates and incentives, it kind of ends up being on par. And then you add in on top of that your ongoing savings from separating yourself from the fossil fuel. And all of a sudden it's becoming a more cost effective measure than the fossil fuel measure. So I would say one of the misconceptions is that it costs more. One of the misconceptions is that you're just swapping one bill for another, that you're increasing your utility bill. I think people don't quite have a grasp on If I'm switching from a gas water heater to a heat pump water heater, what that savings will be.

Lisa Casner:
And I know for me personally, I have a gas water heater and I have a gas stove. And my PGA bill has just about doubled in the last three months where our use rates are very low comparatively. So when you're making that switch, yes, your utility bill will go up, but it will be incremental and your PGA gas bill will go down significantly. So looking at the comparison between, yes, I'm paying more for electric, but I'm reducing my gas bill. And then I think the other one of the other major misconceptions is that the grid can't handle electrification. And again, I would just. Want to reiterate that in reading, our system is really robust, but we're also planning for the increase of electrification. So in the integrated resource plan, we have a load forecast that includes electrification, adoption. And as we go forward in our planning efforts, it's something that we'll continue to consider and plan to. But because our system was overbuilt, we at this point are in a really good position to handle the increase from electrification. And in addition to that, our system distribution system planners are also looking at electrification. So it's something that all of the groups in Rou are aware of and looking at and evaluating when we're doing upgrades to our system. It's something that we're taking into consideration and making sure that in the future we have enough capacity on our grid to be able to handle that.

Steve:
You touched on it a little bit with the electric vehicle conversation here in Redding. We're obviously a bit more rural than some of the more urban areas. I think the average household income in Shasta County might be less than that. In urban areas, maybe folks are a bit more reticent to adopt new electric technology or go with the electric vehicle route at Rue. What type of things are you doing proactively to work with our community that maybe some of those urban areas who are going through the same program don't have to do, or you have customers who are more likely to go ahead and adopt electric technology without having to be convinced.

Lisa Casner:
Going back to the customer survey, that was one of the things we asked our customers is what are you most concerned with? Are you concerned with climate change? Is that are you trying to reduce emissions? Is that even a concern for you? And we were actually quite surprised with the results from that survey. I don't know the number off the top of my head, but I think it was somewhere over 30 to 40% of our customers listed climate change as a major concern, and reduction in emissions was a major focus from that customer survey. So I think the Redding community is starting to understand that there are real implications with carbon emissions and that it is important to promote sustainability. But like you said, I mean, people here do like their gas vehicles and typically people here who electrify are maybe not doing it for the same reasons or motivations as people in Palo Alto. So we we recognize that and we approach our programs a little bit differently. That's one of the reasons why we're promoting programs that reduce cost to our customers. So I think that is really one of the more important things. I mean, in Redding, we are by the state's definition, we are considered a low income area. And I think that's always something that that we're cognizant of when we're implementing and designing our programs. So looking at it solely from a cost perspective and a cost savings, the electrification programs that we're offering do reduce cost to our customers. And I think that's probably the number one motivating factor for people in this area when it comes to electrification. So it's something that, like I said, when we designed our programs, it was a it was one of the top criteria that we measured our programs against. So if it didn't meet that criteria, it didn't make it into our program portfolio. So yeah, I think we do have to approach our programs a little bit differently. And we we recognize that and we understand that.

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