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HomeMy WebLinkAbout2024-02-27; City Council; ; Low Carbon Fuel Standard Credits for Electric Vehicle Charging StationsCA Review GH Meeting Date: Feb. 27, 2024 To: Mayor and City Council From: Scott Chadwick, City Manager Staff Contact: Shawn Gaskari, Management Analyst shawn.gaskari@carlsbadca.gov, 442-339-2925 Subject: Low Carbon Fuel Standard Credits for Electric Vehicle Charging Stations Districts: All Recommended Action Adopt a resolution authorizing the City Manager or designee to track, manage, bank and sell low carbon fuel standard credits in accordance with the regulations set by the California Air Resources Board. Executive Summary The city operates 30 ChargePoint electric vehicle charging ports available to the public at various locations around Carlsbad. Under state law, the use of the city’s zero-emissions vehicle infrastructure generates credits known as low carbon fuel standard credits. These credits are intended to encourage the use of cleaner, low-carbon, transportation fuels in California, reduce greenhouse gas emissions and decrease petroleum dependence in transportation. Under California Air Resources Board regulations, the credits generated by these EV charging stations can be traded or sold through exchanges. The credits generated by the use of these EV charging stations are currently being banked and sold by the city’s EV charger installation vendors: ShellRecharge and ChargePoint. ShellRecharge maintains the rights to manage these credits under its contract with the city, but ChargePoint does not. Staff recommend that the city internalize this process for the ChargePoint charging stations. This requires the City Council to authorize the City Manager or designee to track, manage, bank and sell these credits. The city can then use the proceeds from selling these credits to fund other sustainable transportation projects, as required by the California Air Resources Board’s regulations. Explanation & Analysis Low carbon fuel standard credits for EV charging stations provide an incentive for installing and using EV charging infrastructure. The program sets targets to continually diminish the intensity of carbon in transportation fuels sold in California. EV charging stations generate low carbon fuel standard credits because the electricity used to charge EVs has a lower carbon intensity than gasoline or diesel fuels. The ultimate goal of this program is to move away from higher carbon intensity fuel sources such as gasoline to lower carbon intensity sources such as batteries. Feb. 27, 2024 Item #3 Page 1 of 6 These credits may be used to help the city achieve its Climate Action Plan goals and overall sustainability goals. Some examples of how California cities are using low carbon fuel standard credits to promote sustainability include: • The city of San Diego uses revenue from low carbon fuel standard credit sales to fund its Climate Action Plan initiatives to reduce greenhouse gas emissions and promote sustainability • The city of Oakland uses its credits to offset the carbon intensity of its municipal fleet, including buses and garbage trucks • The city of Sacramento uses the credit sales to fund its EV Infrastructure Program • The city of Fresno uses credit sales to fund its Clean Air Program, which includes a variety of initiatives to improve air quality and reduce greenhouse gas emissions Currently, only the 30 ChargePoint charging stations are eligible for this process. These stations are located at the city-owned parking lot on State Street and at the Aviara, Alga Norte, Aviara, Poinsettia and Stagecoach and community parks, Pine Park and Fire Station 2, as shown in Exhibit 2. The six stations recently installed at the Police & Fire Headquarters and the Fleet Maintenance Facility, and all future city-owned and operated stations will also be eligible for credits. ShellRecharge, the operator of a total of the 20 stations at the Faraday Administration Center and the City Library on Dove Lane – each with 10 stations – retains the rights to any credits generated by those units, consistent with the terms of their original agreement and continues through the life of the chargers. The low carbon fuel standard credits are based on carbon dioxide reductions, with one credit for each avoided metric ton of carbon dioxide. However, the actual amount of low carbon fuel standard credits produced by an EV charging station, can vary significantly depending on various factors. For example, an EV charging station located in a region with a high carbon intensity electricity grid would produce fewer credits than a charging station located in a region with a low carbon intensity electricity grid. Additionally, the credit generation rate for EV charging stations in California is subject to change over time due to market fluctuations and other factors as demonstrated by credit prices for Level 2 EV charging stations, like the ones Chargepoint provides, which have ranged between $70 to $200 over the past eight years. Other variables that can affect how many low carbon fuel standard credits are earned include adding more EV charging stations and increasing the overall usage of those stations. Funds collected from selling these credits can be applied to other sustainable transportation initiatives, including, but not limited to: 1. Incentive support for buying or leasing EVs or other electric transportation equipment such as electric forklifts, electric cargo-handling equipment, electric transportation refrigeration units, electric buses and electric trucks 2. Incentives or direct investment for installing EV charging infrastructure 3. Rebates or other incentives for using electricity as a transportation fuel, such as discounted or no-cost electricity for transportation applications, or discounted or no- cost rides on electric public transit Feb. 27, 2024 Item #3 Page 2 of 6 4. Marketing, education and outreach programs to provide information and materials to inform the public on the benefits of electric transportation, which could include information regarding the environmental, health and economic benefits of electric transportation, including a comparison of the total cost of the electric transportation mode – refueling, servicing and maintenance, etc. – versus other alternatives If the city does not take part in managing, banking and selling low carbon fuel standard credits, the current vendor, ChargePoint, will continue to retain and use the available credits. Staff recommend that the City Council authorize the City Manager or designee to track, manage, bank and sell the city’s low carbon fuel standard credits for the ChargePoint chargers. Fiscal Analysis The city’s 24 ChargePoint charging stations – which does not include the six recently installed at the Police & Fire Headquarters and the Fleet Maintenance Facility – have kept approximately 230 tons of greenhouse gas emissions from entering the atmosphere since 2016. Based on annual average low carbon fuel standard credit exchange rates that range between $70 and $200, in the past eight years, the city could have accrued approximately $27,612 in credits had this program been in place. Next Steps Upon City Council approval, the city manager and staff will begin to track, manage, bank and sell the low carbon fuel standard credits generated from the use of ChargePoint’s EV charging stations. Environmental Evaluation The City Planner has determined that the project is exempt from the California Environmental Quality Act under CEQA Guidelines Section 15061(b)(3) (Common Sense Exemption); because it can be seen with certainty that the project will have no significant negative impact on the environment. Furthermore, the City Planner, through the process outlined in Carlsbad Municipal Code Section 19.04.060, posted a notice with this determination on Feb. 15, 2024. No appeals of this determination were received in accordance with CMC Section 21.54.140. Therefore, the City Planner’s determination is final. Exhibits 1. City Council resolution 2. Location map Feb. 27, 2024 Item #3 Page 3 of 6 RESOLUTION NO. 2024-035 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, AUTHORIZING THE CITY MANAGER OR DESIGNEE TO TRACK, MANAGE, BANK AND SELL LOW CARBON FUEL STANDARD CREDITS IN ACCORDANCE WITH THE REGULATIONS SET BY THE CALIFORNIA AIR RESOURCES BOARD WHEREAS, the City Council of the City of Carlsbad, California has determined that it is in the best interest of the city to track, manage, bank and sell low carbon fuel standard credits generated by city-owned electric vehicle, or EV, charging stations; and WHEREAS, funds generated through the California Air Resources Board's Low Carbon Fuel Standard Program can be used to fund future sustainability projects; and WHEREAS, currently, low carbon fuel standard credits are being tracked, managed, ban ked and sold by the city's EV vendor, ChargePoint; and WHEREAS, Paragraph 7 in section 95491(d)(3)(A) of the CARB's low carbon fuel standard regulation requires the use of the electricity credit proceeds resulting from a specific category or sector of electric transportation be invested in transportation electrification projects in the same category or sector; and WHEREAS, the responsibility for tracking, managing, banking and selling low carbon fuel standard credits with the California Air Resources Board would be transferred from ChargePoint to the city. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California, as follows: 1.That the above recitations are true and correct. 2.That the City Council authorizes and directs the City Manager or designee to track, manage, bank and sell low carbon fuel standard credits in accordance with the regulations established by the California Air Resources Board. Exhibit 1 Feb. 27, 2024 Item #3 Page 4 of 6 PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the City of Carlsbad on the 27th day of February, 2024, by the following vote, to wit: AYES: NAYS: BLACKBURN, BHAT-PATEL, ACOSTA, BURKHOLDER, LUNA NONE. ABSTAIN: NONE. ABSENT: NONE. KEITH BLACKBURN, Mayor SHERRY FREISINGER, City Clerk (SEAL) Feb. 27, 2024 Item #3 Page 5 of 6 ChargePoint Stations Station name Address No. of ports Activation date STATE ST LOT 3045 State St. 2 5/25/2018 STAGECOACH 6 3420 Camino De Los Coches 2 5/23/2018 STAGECOACH 5 3420 Camino De Los Coches 2 5/23/2018 STAGECOACH 4 3420 Camino De Los Coches 2 5/23/2018 STAGECOACH 3 3420 Camino De Los Coches 2 5/23/2018 STAGECOACH 2 3420 Camino De Los Coches 1 5/23/2018 STAGECOACH 1 3420 Camino De Los Coches 1 5/23/2018 POINSETTIA 2 6600 Hidden Valley Road 2 7/19/2022 POINSETTIA 1 6600 Hidden Valley Road 2 7/19/2022 PINE PARK CC 3209 Harding St. 2 6/7/2018 FIRE STATION 2 1906 Arenal Road 2 10/11/2022 AVIARA PARK 6435 Ambrosia Lane 2 9/30/2019 ALGA NORTE PARK 6565 Alicante Road 2 9/3/2015 IMPALA 2 SOUTH 2480 Impala Drive 1 12/14/2023 IMPALA 1 NORTH 2480 Impala Drive 1 12/14/2023 CARLSBAD PFHQ 2 2560 Orion Way 2 1/18/2024 CARLSBAD PFHQ 1 2560 Orion Way 2 1/18/2024 30 Exhibit 2 Feb. 27, 2024 Item #3 Page 6 of 6