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Industry is Leading the Way on Transportation Electrification

On June 19th, a group of diverse businesses from a variety of industries announced the formation of the Transportation Electrification Accord (“Accord”). This announcement signaled an increasingly firm consensus around the importance of open, resilient, and cooperative approaches to transportation electrification — and major companies and organizations, some of whom have not previously been active in this realm (such as the Edison Electric Institute, Southern Company, AEP, GM, and Honda) have come together around this effort.

The Accord’s announcement comes at a time of intense dynamism in this industry.

On May 31st, the California Public Utilities Commission authorized more than $760 million worth of transportation electrification projects by the State’s three investor-owned utilities. This Commission action illuminates the arc of an inflection point along the history of transportation technology: regulated utilities can expect to earn a rate of return as providers not just of power, but now, of fuel. (More on the significance of this and similar state-level developments in our recent post.)

Utility companies’ participation in such projects — widely viewed as a major opportunity for businesses that are otherwise facing decreased demand for electricity (i.e., energy efficiency) and disruption from distributed energy resources (see, e.g., Puente Power Plant) — echoes recent announcements from the auto industry. GM, for example, plans to produce more than twenty new electric vehicle models by 2023; Ford has committed to spending nearly $10 billion on EVs by 2020; and Volvo has plans for 50% of its sales to be fully electric by 2025. Tesla, for its part, continues to ramp up production of its mass market vehicle, the Model 3, and was recently the subject of a report that indicates its economic contribution to California alone has been worth more than $5 billion.

As the market heats up, new demand for EVs will raise a number of questions, relating to public policy, law, regulation, finance, and technology. Presumably, that is what motivated the major environmental groups, utility companies, car companies, and various other parties to sign onto the Accord.

The Accord’s signatories will commit to the advancement of “an equitable, prosperous and electrified transportation future” by developing cooperative approaches that draw on participants’ expertise and experience along the value stream. It seeks to provide internal accountability and to shape a framework for coordination — from OEMs to electric charging providers to consumers — across the industry. We’ll be keeping tabs on the Accord, on this blog, as we continue to monitor developments in the electric and autonomous vehicles space.

© 2018 Covington & Burling LLP

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About this Author

Jake Levine, Covington Burling, Energy lawyer
Associate and Policy Advisor

Jake Levine is a member of the firm’s Public Policy Practice Group, and its Clean Energy and Climate Industry Group. Mr. Levine advises clients on a variety of public policy, legislative, regulatory, and business matters related to clean energy, climate, water, transportation, and technology.

Prior to joining Covington, Mr. Levine held a number of senior positions at the intersection of clean energy policy and technology. Mr. Levine served most recently as Senior Counsel and Principal Consultant to California State Senator Fran Pavley, where he led a team focused...

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