Key considerations for developing a utility fleet electrification advisory program

Another program, National Grid’s MA Fleet Advisory Service Program, is focused on providing support to customers in the municipal, school bus, transit, state, and federal fleet areas. ICF and National Grid’s ability to support participating fleets throughout the full term of the program makes it unique because fleets that begin participating early have access to ongoing technical, analytic, training, and market support for a longer period of time—providing participants the technical and support services they need as they move forward with EV adoption.

As utilities evaluate the costs and benefits of different types of fleet electrification advisory programs, there are many perspectives to consider. A few of the key questions that should be part of the planning and development phase of a fleet advisory program are:

1. What impacts are you trying to achieve, and how will they be measured and reported?
2. Which customers are the ideal targets for the program and why?
3. In what ways and for how long will you support those customers?

Focus on the intent

The primary question to be answered by the utility at the outset is: what are your goals related to customer fleet electrification? Use the conversation as an opportunity to align stakeholders on the true intent of the program. This core principle can help inform who or what organizations the program targets and how to support them. This intent could be communicated via a singular focus area or a set of pillars that can guide targeting and support offerings.

Some of the primary and secondary goals defining fleet advisory programs today include:

• Number of fleets engaged, supported, or adopting EVs
• Total number of vehicles electrified
• Net, site, or regional emissions reductions
• Percent of EV adoption that involves some type of managed charging (including off-peak rates, direct load control, and other carrots or sticks to support efficient use of energy)
• Increased resilience of the grid or community
• Improved positioning as technical experts in the field

Determine the best targets

The next step is to identify the ideal candidates or targets for the program. Some utilities are focused on medium- and heavy-duty fleets only, while others are including support and advisory services for all vehicle classes, even non-road equipment.

This non-exhaustive list can be mixed or matched to help define the target customer group(s):

• All commercial customers
• School bus owners and operators
• Municipal, state, or federal
• Transit and intermodal fleets
• Minority-owned business fleets
• Fleets located or operating in designated environmental justice (EJ), disadvantaged, or underserved communities
• Large or high mileage fleets
• Light-, medium-, or heavy-duty fleets
• Non-road equipment users

Identify the support structure

The next consideration is how and for how long to offer support for these customers. Although answering these questions may have notable program budget implications, doing so allows the utility to map how customers can be supported with each component.

There are many possible program elements to support customers. For example, web-based tools can help evaluate total cost of ownership as well as emissions reduction potential; localized mapping tools can aid EV charging development by looking at utility feeder capacity, disadvantaged communities, and proximity to transit; site design and support can offer utility and customer-side infrastructure estimates, preliminary charging site designs, or full permitting packages. Additional components that utilities and customers find valuable include:

• Information or dedicated support on applicable local, state, or federal grants and funding
• Current or planned availability of targeted EVs
• Local and national EV news, events, and case studies
• Concierge support to collect and analyze fleet data
• Utility rate comparisons and analysis
• Internal/external business case support (e.g., summary reports for budgeting committees or board meetings)
• Procurement support, including templates for vehicles and equipment RFI/RFP
• Phone or web-based EV and EV charging support

Experience matters

Once the main concepts are developed and program design elements start to take shape, consider some key learnings and best practices:

• Don’t underestimate the need for recruitment. There may be low(er) cost of acquisition or pent-up demand for this type of service initially, but utilities should be ready to find and engage customers as a means of building a strong pipeline of candidates that fit the profile for the program.
• Find and engage the right partners. In every state and utility service territory there may be willing supporters to recruit, educate, and build awareness of the program. For example, the local Clean Cities Coalitions are keenly aware of the market dynamics and key players.
• Trade ally networks can be powerful supporters. They can help with everything from raising customer awareness of a fleet advisory program to partnering on EV charger installations or EV procurement. Building and engaging a network of partners can play a significant role in supporting customers’ growing needs around fleet electrification.
• Enlist utility account and relationship managers to identify customer champions. Account managers are great resources that can introduce the program to fleet, sustainability, facilities, and corporate contacts. In many cases, the existing customer contacts lie outside the teams tasked with evaluating and deploying EVs. But utility relationships are strong—with the potential to grow stronger—as utilities are increasingly seen as the EV experts by their customers.
• Consider equity at every step. Designated EJ or disadvantaged communities are the most negatively impacted by transportation pollution. By targeting fleets that traverse these areas (rather than just those that domicile in these areas), a program can magnify the emissions benefits of transportation electrification. Tools like EJ Screen or the Climate and Economic Justice Screening Tool can be leveraged to help make informed decisions about targeting areas and customers.
• Understand the business value of electrification and decarbonization. Beyond total cost of ownership, get familiar with Scope 1, 2, and 3 emissions and how customers can build stronger businesses and extract more value from fleet electrification than just the dollars and cents.
• Have a plan to engage multi-site/multi-utility customers. This could be a national account customer or a local business with multiple locations and operations in more than one electric service territory. What level of support, if any, will you provide for fleets that are not domiciled within your territory? It should be recognized that a lack of comprehensive fleet support may dissuade the customer from participating. Gathering fleet data is a non-trivial task, so if the customer can only assess a small portion of their fleet, they may not participate at all.
• Understand that keeping up with the EV landscape is difficult for customers. The market is evolving quickly, and fleet managers are being bombarded with new vehicle, equipment, network, and other vendors rushing for the opportunity to advertise their wares and solutions. Provider-neutral introductory trainings (think EV and EV charging 101-level trainings) have been well received across the country. The need for similar offerings will only grow as more and more customers evaluate electrification opportunities.
• Realize that each stakeholder group will have varying levels of expertise around EVs and charging infrastructure. Developing support mechanisms for new and experienced stakeholders across the range of business and financial operations serves to bridge the gaps in differing levels of EV and charging infrastructure knowledge—what is a simple spreadsheet evaluation to some may have much deeper implications for others.
• Consider developing a tiered approach to fleet offerings. Maximizing the benefit and reach could take the form of no- or light-touch services for all eligible customers, and more technical and hands-on support for customers that meet defined characteristics (e.g., established sustainability plans, stated commitment to EV acquisitions, etc.).
• Federal and state incentive programs can be complicated. Incentive programs, like the new Commercial EV Tax Credit in the Inflation Reduction Act, are making the business case for electrification more appealing. However, the incentive eligibility requirements are nuanced, and funding availability windows are moving targets. Customers may need technical and administrative support throughout the application process.
• Capitalize on the experience of existing EV fleets. The real-world experience of fleets that have purchased EVs and installed chargers is a resource that utilities and other fleet managers can leverage to better understand the costs, timelines, and challenges. Virtual gatherings that connect fleet managers have been well received by fleets considering EV implementation.
• Understand the motivation and barriers behind each fleet’s electrification journey. There are a variety of internal and external forces that make fleets consider electrification. Lower cost of ownership is a key factor for many fleets, for example, while others may prioritize emission reduction targets.
• Don’t overlook the low-hanging fruit. Despite incentive availability and other factors motivating EV adoption, fleet operators may be resistant to change. Converting a single light-duty vehicle to electric can spark subsequent EV purchases as fleet operators realize the operational, environmental, and cost benefits of EVs.

Shaping the path forward on fleet electrification

As utilities consider developing and implementing a fleet advisory services program, we encourage them—along with regulators and customers—to consider both the quantifiable costs and benefits of this type of program, as well as the less quantifiable opportunity costs of non-action. As fleet interest in electrification increases, utilities will play a role by supplying more energy.

One of the goals of a fleet electrification advisory program is to help understand and inform fleet deployment plans long before the customer calls looking for new service. This customer evaluation and decision-making period is the ideal time for utilities to educate customers on everything from rates to load management strategies to distributed energy resources they may want to integrate into their plans. In short: help to inform the conversation and shape the path forward rather than observing from the outside.

Fleet electrification advisory services provide valuable tools for utilities and their customers to better understand the opportunities to electrify and decarbonize in a cost-effective manner. For example, ICF's fleet electrification assessment model tracks and regularly updates information for over 550 (and growing) available light-, medium-, and heavy-duty vehicles to help fleets evaluate the total cost of ownership and their emissions reduction potential.

By helping to align customer plans with utility capital, distribution systems, and integrated resource plans, all customers can benefit from well-designed utility programs that have the potential to put downward pressure on rates through more efficient asset utilization.