Trucking and Utilities: Working Together to Advance Electrification
When I was in high school, I participated in a student exchange homestay program in France. I spent a month living with my French host brother, attending school with him and participating in extracurriculars together, all while practicing new language skills. I was 16 years old at the time, so my biggest concerns were, 1) Will there be any cute French boys at my new school? and 2) Will my host brother and I have anything in common? Will we even be able to communicate?
When I look back on many fond memories from this experience, I can report that yes, despite a bit of a language barrier and one of us running with a significantly cooler crowd than the other (hint: I wasn’t the cool one), at the end of the day, we had more in common than we didn’t.
I’m reminded of this experience when I see the cross-industry exchanges happening today between trucking fleets and electric utilities. It’s been fascinating to watch as these two industries, that historically haven’t exchanged much more than a bill payment, are now starting to work together to advance transportation electrification. The two obviously offer very different services, with one transporting and delivering electrons while the other transports and delivers goods. And they may use different terminology, seemingly speaking different languages—one fluent in kilowatt-hours and the other in ton-miles. However, having worked with both utilities and fleets, I would contend that the two have more similarities than differences, and both are going to need to work together in order to bring about a clean energy future.
Unsung Heroes Providing Essential Services
For example, both trucking fleets and electric utilities are—to use the buzzword of the day—essential. That is, as the United States adjusts to a new normal under COVID-19 circumstances, it is perhaps clearer than ever how vital both electricity and goods movement are to the economy and our way of life. Today’s lifestyle is wholly dependent on access to electricity and global supply chains. It’s hard to even imagine the current world without power to support Netflix binges or without groceries to restock the supermarket shelves. Folks may not think very often about where their power comes from or how their packages arrive at their door (until there’s a problem), but there’s no question that both fleets and utilities are part of the backbone of the American economy.
No One the Same
Fleets and utilities are also similar in how diverse they are. As one utility representative recently put it to NACFE staff, “If you’ve met one utility…you’ve met one utility.” The same is true of trucking fleets in that each one looks, feels, and acts differently. For both, it’s very difficult to make generalizations about the sector as a whole. For example, with fleets, some may be private while others are available for hire. Meanwhile, utilities can be investor-owned, owned by members as part of a cooperative, or publicly owned by a municipality or state.
Similarly, fleets may serve geographies as small as a neighborhood or as large as a continent while utilities may serve small, rural areas to multi-state territories. Some fleets consist of an owner-operator with one truck, while others are corporate fleets of thousands of vehicles. Some utilities have hundreds of generating stations and thousands of miles of transmission, while others have only a few. Fleets can provide services ranging from urban delivery to regional haul or even long haul, with vehicles ranging from Class 3 delivery vans to Class 8 sleeper trucks, while utilities may manage power lines of varying lengths with voltages ranging from over 345 kV for transmission down to less than 69 kW for distribution, with both types of assets typically getting smaller the closer they get to final customer delivery.
Even fuels differ from company to company. For example, some utilities are heavily invested in renewable energy like solar and wind, while others focus on generating electricity from fossil fuels like coal or gas. Similarly, many fleets fuel their vehicles with diesel, while some use alternatives like compressed natural gas, propane, or even electricity. The list of unique characteristics from one company to the next goes on and on, and it is important to remember that the United States has over 1.7 million fleets and over 2,900 utilities and just as many ways of operating those businesses.
The Rules of the Game
No matter how diverse these companies may be, none are a stranger to regulations. For example, all fleets are subject to operational constraints imposed by the Department of Transportation, such as hours of service rules, which limit the number of hours a driver may work over a specified period of time; weight restrictions, which limit the overall weight of the vehicles; and greenhouse gas rules, which mandate improved fuel economy of vehicles and cut carbon pollution while bolstering energy security and spurring manufacturing innovation.
Regulation of utilities tends to happen more at the state level via public utilities commissions, which determine policy related to rates and services. This can involve everything from rate design—ensuring a fair price to ratepayers and a fair return to companies—to renewable portfolio standards—mandating that a certain percentage of generation come from renewable sources. Both fleets and utilities are also subject to many regulations focused on the safety of employees and the public. Understanding the regulations facing each industry is vital to understanding the operational constraints within which both must function.
Key Climate Contributors
Last but certainly not least, it’s important to note that fleets and utilities represent the two largest greenhouse gas emitting sectors in the United States—transportation, accounting for 29 percent of nationwide emissions, and electricity, accounting for 28 percent. In a climate-constrained world, this means that both industries are under a huge amount of pressure to reduce carbon pollution from their operations while still being able to deliver their essential services.
Many gains have already been made by both with respect to efficiency, through utility energy efficiency resource standards and vehicle manufacturing innovation; however, much work remains. This is why both are now pursuing fuel-switching measures, with utilities working to bring on more renewable energy generation and fleets eyeing zero-emissions vehicles. And one thing’s for certain—if battery electric vehicles are going to be successful, fleets and utilities are going to need to work together.
There are certainly barriers to effective fleet-utility collaborations, but perhaps the biggest is the lack of understanding between groups. However, no matter how different the terminology or business models may be, fleets and utilities have many things in common. And although it can be daunting getting to know a new industry, both fleets and utilities can take comfort in the fact that the other isn’t that different after all. Plus, they’ve got help from organizations like RMI and the North American Council for Freight Efficiency (NACFE), who have created guidance reports to help both move fleet electrification forward together. Now if only I could find that French boyfriend…
Part Two of this blog is published on Commercial Carrier Journal.