High DERs Update: How the CPUC Treats New Electrification Study Will Determine Billions in Utility Spending Authority
Below is a synthesis and comparison of stakeholder comments in the CPUC's High DER Future docket, which were filed in response to Cal Advocates' "Distribution Grid Electrification Model 2025 Study and Report" (DGEM 2025).
We explain how consumer advocates, investor-owned utilities, and clean-energy and transportation stakeholders interpret DGEM 2025’s findings, where their views align, and where they diverge (particularly on the role DGEM should play relative to utility "Electrification Impact Studies Part 2," which CRI covered here).
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The DGEM 2025 Study has generally been welcomed into the High DER Futures record as a valuable, independent assessment of how widespread electrification could affect California’s distribution grid costs.
There is notable agreement among comments that the study complements the utilities’ Electrification Impact Studies Part 2 by offering a top-down, system-wide perspective that contrasts with the utilities’ bottom-up planning analyses. However, parties diverge on how much weight the Commission should assign to DGEM 2025 when evaluating infrastructure needs and cost forecasts.
WHO SHOULD CARE: Anyone exposed to future distribution spending (or trying to avoid paying for unnecessary infrastructure) should be paying close attention.
This includes:
- Data centers, electric-vehicle fleet operators, refineries, and manufacturers face the cost consequences of distribution upgrades. Whether DGEM constrains utility spending directly affects interconnection costs and future rates.
- Utility regulatory and planning teams. How the Commission uses the DGEM 2025 study will affect how much latitude IOUs have in forecasting and defending distribution capital spending, particularly for secondary systems and feeder upgrades.
- Ratepayer and consumer advocates. DGEM strengthens the case that cost growth is not inevitable and that utilities can be held to stricter reasonableness standards.
- EV charging, Vehicle-Grid Integration, and Distributed Energy Resource providers. Managed charging and bidirectional solutions move from “nice to have” to system-critical cost controls if DGEM is treated seriously.
- Commissioners and administrative law judges. The study frames a clear choice: use DGEM as a benchmark that disciplines utility forecasts, or allow it to remain advisory with limited impact on capital outcomes.
- Clean energy and climate policy stakeholders. The record shows electrification can reduce rates if load is managed; without enforcement, benefits may not materialize.
Below are brief summaries of parties' positions.
Utility Consumers’ Action Network (UCAN)
UCAN argues that DGEM 2025 provides a critical reality check on utility projections. UCAN emphasizes that the study identifies managed electric-vehicle charging as the single largest lever for reducing future distribution costs, estimating $5 billion to $18 billion in avoided upgrades by 2040, under scenarios with active load management.
UCAN highlights the substantial gap between DGEM’s statewide cost estimates and those advanced by the utilities (particularly PG&E) and contends that this divergence suggests overly conservative engineering assumptions and potential over-building in utility forecasts.
UCAN also points to DGEM’s reduction in unit cost assumptions compared to earlier iterations, attributing this change to the use of actual project cost data rather than theoretical models. From UCAN’s perspective, DGEM 2025 should serve as a “reasonableness benchmark,” especially for secondary distribution costs, with utilities bearing the burden of justifying materially higher projections.
UCAN urges the Commission to prioritize managed charging, non-wires alternatives, and customer-side solutions over traditional infrastructure expansion.
INVESTOR-OWNED UTILITIES
The investor-owned utilities acknowledge the value of DGEM 2025 but caution against treating it as a substitute for utility planning studies.
- PG&E supports inclusion of the study in the record and recognizes broad alignment on the importance of managed load growth. However, PG&E argues that DGEM understates distribution costs by failing to fully capture stand-alone distribution line section upgrades that occur away from substations and feeder heads.
- PG&E also criticizes DGEM’s approach to secondary infrastructure costs, noting that they are derived from proportional assumptions rather than independent, bottom-up calculations, and therefore should not be relied upon as definitive estimates.
- PG&E further raises concerns about assumptions related to EV charging behavior, emphasizing that vehicles charge at multiple locations rather than solely at registration addresses, complicating feeder-level forecasting. In PG&E’s view, DGEM should be refined in future iterations but should not be used to constrain near-term utility investment planning.
SCE similarly praises the analytical rigor of DGEM 2025 while stressing that it answers a different question than EIS 2.
- SCE characterizes DGEM as an exploration of alternative electrification futures, testing a range of adoption levels and charging behaviors, whereas EIS 2 is designed to assess how the utility’s existing system responds to electrification once adoption occurs. Because of these methodological differences, SCE cautions that direct numerical comparisons between DGEM and the utilities' Electrification Impact Studies Part 2 are inappropriate.
- However, SCE does agree that the studies demonstrate the multidimensional nature of electrification outcomes, shaped by adoption scale, geographic distribution, and customer participation in demand flexibility.
VEHICLE-GRID INTEGRATION COUNCIL
The Vehicle-Grid Integration Council highlights DGEM as independent confirmation that managed EV charging can materially reduce distribution system costs and protect ratepayers. The Council emphasizes that DGEM’s modeled savings depend on active, not passive, load management and notes the gap between modeled outcomes and existing rates or programs capable of delivering that level of participation.
The Council urges the Commission to expand managed-charging initiatives and to extend DGEM in future iterations to account for bidirectional charging and vehicle-to-grid capabilities, which could further reduce localized peak demand and defer infrastructure upgrades.
ENVIRONMENTAL DEFENSE FUND
Environmental Defense Fund similarly views DGEM 2025 and the utilities’ Electrification Impact Studies Part 2 reports as mutually reinforcing rather than conflicting. EDF acknowledges the wide variation in cost estimates across studies, particularly with respect to secondary distribution infrastructure, but argues that these differences reflect methodological uncertainty rather than analytical failure.
Environmental Defense Fund urges the Commission to focus on directional consistency rather than precision at this stage. Across all studies, Environmental Defense Fund notes a shared conclusion: preparing the grid for electrification will require substantial investment, but pairing load growth with effective load management (especially managed EV charging) can yield net benefits for ratepayers and place downward pressure on rates over time.
INSTANT ANALYSIS
Parties' comments reveal agreement that DGEM 2025 is a credible, independent assessment showing managed electrification (especially EV charging) can substantially reduce future distribution costs. Consumer and clean-energy stakeholders view the study as evidence that unmanaged, capital-heavy planning is avoidable and that active load management could deliver billions in avoided upgrades through 2040.
Despite methodological disagreements, all parties (including the utilities) acknowledge that managed EV charging represents a critical cost-control lever. Environmental Defense Fund's analysis emphasizes this cross-cutting consensus: DGEM, PG&E, SCE, and SDG&E all identify transportation electrification paired with demand flexibility as essential to realizing ratepayer benefits. The debate is not on whether managed charging matters, but on what degree of participation is achievable and how quickly programs can scale to meet modeled assumptions.
Utilities accept DGEM’s directional value but resist its use as a planning constraint, arguing it abstracts away local engineering realities and should not override Electrification Impact Studies Part 2 forecasts. The main dispute centers on secondary distribution costs, where DGEM’s lower estimates clash with much higher utility projections.
How the Commission resolves this (treating DGEM as a benchmark or a sensitivity exercise) will determine whether managed electrification meaningfully restrains future capital spending.