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, including school buses, 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 groundbreaking 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.

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 for 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,” said Ed Burgess, VGIC policy director. “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.”