Pacific Gas and Electric Company (PG&E) has received approval to establish the nation’s first “vehicle-to-grid” (V2G) export compensation mechanism for commercial electric vehicle (EV) charging customers in its California service area.

The V2G export rate promotes EV adoption by providing upfront incentives to help commercial customers offset fleet costs and delivers an innovative solution for these vehicles to export power back to support the grid during peak energy demand periods.

The settlement agreement with the Vehicle-Grid Integration Council (VGIC), Electrify America LLC and the Public Advocates Office at the California Public Utilities Commission (CPUC) was adopted by the CPUC on Oct. 20, 2022.

The rate is expected to increase participation from V2G school buses and other electric vehicles in response to near-real-time grid conditions and will be available to charging equipment paired with stationary energy storage systems, which can support the grid and provide backup power to charge vehicles during grid outages.

The Adoption of the Nation’s First V2G Export

More than 420,000 EVs have been sold in PG&E’s service area, representing one in six EVs in the country. As large vehicles like school buses and commercial fleets continue to electrify, the opportunity grows for these vehicles to serve as crucial, flexible grid resources to support a more reliable, affordable and efficient energy system. Greater volumes of these vehicles on the road comes at a critical time, as peak energy demand challenges California’s grid and novel solutions like V2G emerge.

“The adoption of the nation’s first V2G export rate aligns with our core focus of proactively preparing the grid, increasing access to EV infrastructure, and supporting EV adoption through rates, rebates, tools, and education,” said Aaron August, PG&E Vice President, Utility Partnerships and Innovation.

This new export rate structure, in the nation’s largest EV market, can serve as a guide for additional innovative rate structures across the country. As utility regulators, state agencies and industry partners continue to move forward with policy and market design in this dynamic space, VGIC is committed to advancing the role of smart EV charging and discharging through policy development, education, outreach, and research to support transportation and electric sector decarbonization.

“The CPUC’s decision is a strong step forward for Californians and in support of the state’s grid, implementing the nation’s first dynamic export rate for EV charging customers,” Ed Burgess, VGIC Policy Director, said.

“As ever-greater numbers of EVs hit the roads, this innovative rate option will allow EV owners to further benefit from their investment in clean transportation. Leveraging the capability of EVs as a grid resource will help integrate more clean energy into our power system, reduce energy bills for all utility customers, and support California’s ambitious decarbonization goals. We appreciate PG&E’s constructive approach to supporting this program, and believe it serves as a guidepost for other forward-looking energy providers to follow across the country.”

PG&E's Committment to Clean Transportation

PG&E is committed to providing easy-to-use and affordable clean transportation programs and incentives that help redefine the energy landscape to support California’s clean air and greenhouse gas emission reduction goals and collective action on climate change.

As part of PG&E’s 2030 targets, the company is aiming to proactively prepare the grid for 12,000 GWh of EV-related electric load and improve processes to enable rapid, safe EV energization and interconnection.

It’s also working to enable 2 million EVs to participate in vehicle-grid integration applications, allowing EVs to be a cornerstone of both reliability and resilience. PG&E offers a wide variety of resources and programs to support its commercial and residential EV customers.

This news was reported following PG&E and General Motors announced a new collaboration. PG&E plans to use GM’s EVs as on-demand power sources for homes in PG&E’s service area.

This will be GM’s first vehicle-to-home capable EV, and it’s working toward scaling it to more customer trials.