PUC hears experts on alternative fuels and energy infrastructure

Mass acceptance of electric cars and natural-gas-powered trucks is still a few years away, but the Pennsylvania Public Utility Commission on Thursday pondered the potential for alternative-fuel vehicles to overwhelm critical infrastructure like the electric grid and gas utilities.

"Should we be worried?" commission chairman Robert F. Powelson wondered at the end of a six-hour PUC forum at Drexel University. "Who pays for it? That's a question as you make upgrades to the distribution system."

A parade of panelists, including vehicle manufacturers and entrepreneurs building networks of stations to sell alternative fuels, urged the commission to design a fair system that allows competitive suppliers and consumer preferences to dictate the choices.

Most experts said existing distribution systems could accommodate the growing number of alternative-fuel vehicles that need to refuel or recharge. But if the market for electric cars and natural-gas trucks grows quickly and is not managed smartly, disruptions could occur.

Terry Boston, chief executive of PJM Interconnection Inc., the regional grid operator, said that if a million electric vehicles had attempted to tap into the mid-Atlantic system on a hot day similar to last July 21, when the grid labored under record loads, a massive blackout would have occurred.

"If all of those came home at 5 p.m. and plugged in, we would have a voltage collapse, and I would be seeking other business opportunities very quickly," Boston said.

But the distribution system could accommodate 25 million vehicles if smart-grid controls were installed — they're currently in the works — and all vehicles were remotely synchronized to recharge between midnight and 7 a.m., when there is an abundance of generation capacity.

Time-of-use rates, which allow suppliers to price electricity hourly to encourage customers to shift loads to discounted off-peak hours, would help manage a more efficient use of the electrical system, the experts said. Pennsylvania utilities are currently mandated to devise hourly-rate options for customers who want them.

As for fossil fuels, drillers using hydraulic-fracturing methods to extract gas from unconventional formations such as Pennsylvania's Marcellus Shale say they will produce long-term supplies of cheap natural gas that burns much more cleanly than gasoline or diesel. Natural gas is currently priced at about half the cost of diesel.

"In the near term, we're talking about replacing overseas oil with domestic natural gas," said Kathryn Klaber, president of the Marcellus Shale Coalition. Natural gas is primarily being aimed at the market for heavy trucks and buses, rather than passenger cars.

But some fleet operators are uncertain that the price advantage will remain in effect long enough to justify investment in the higher-priced vehicles fueled by compressed natural gas, or CNG.

Laura Scott, vice president of finance and strategy for fuel retailer Gulf Oil, which is investing in a natural-gas-fueled truck fleet to move its products to market, expressed concern that crude-oil prices could plummet, making diesel cheap, as it was in the 1990s.

"What's scary and what killed alternative fuels in the past is whether oil drops back to $50 a barrel," she said. "And nobody in this room has any control over that whatsoever."

Todd Campbell, vice president of public policy and regulatory affairs for Clean Energy Fuels Corp., which is building a nationwide network of natural-gas refueling stations, urged the commission to not allow regulated utilities to compete with private suppliers by charging their ratepayers for the cost of refueling stations. That sentiment was echoed by a company building a network of electric-charging stations.