Make no mistake about it; the impending advent of widespread electric car usage frightens many California utilities. With the vehicles hitting markets en masse later this year, there are many questions left unanswered.

On the upside, at least one query has been resolved (sort of). There was talk that the California Public Utilities Commission would regulate EV service stations like utilities, because they are selling power. But that will not happen.

A proposed ruling by CPUC's Commissioner, Nancy Ryan, concluded that, "The ownership or operation of a facility that sells electricity at retail to the public for use only as a motor vehicle fuel and the selling of electricity at retail from that facility to the public for use only as a motor vehicle fuel does not make the corporation or person a public utility within the meaning of Pub. Util. Code 216 solely because of that sale, ownership or operation. " The measure still awaits a final vote this summer.

That's good news for companies like Coulomb Technologies and Better Place, both of which are adamant that they are not selling kilowatt-hours. "We charge by time," Richard Lowenthal, Founder and CEO at Coulomb Technologies, "which is more like a parking meter."

The utilities, however, were split. Southern California Gas Company and San Diego Gas & Electric Company -- which collectively form SEU -- commented that the sale of electricity as transportation fuel is not a public utility service, but Pacific Gas & Electric and Sacramento Municipal Utility District said that it was. Southern California Edison came down on the side of PG&E, noting that the CPUC "does not have the authority to exempt from regulation entities that SCE describes as clearly public utilities and load-serving entities under the code."

So while this ruling solved one issue, it opened up a Pandora's box of questions about how else to legislate and pay for bringing EVs onto the grid.

Many entities, from utilities to non-profits to the EV Service Provider Coalition (Better Place, Coulomb Technologies and ECOtality/eTec), point to tariffs as the way to make sure that charging stations are paying for a portion of the grid updates that will be necessary to connect EVs without transformers exploding all over the place.  Other organizations offer their mostly useless two cents by saying there should be a "light-handed" approach by the CPUC, without offering any real specifics.

The process sounds kind of like crossing out the answers you know are wrong on the SAT until you narrow it down to a few viable options, then hope you've made the best guess.

There is a solid argument as to why charging stations, whether in McDonald's or a condominium, should not be regulated like a utility. Both Coulomb and Better Place have pointed out that they are offering more than just charging; it is a service. Also, Richard Lowenthal from Coulomb rightly pointed out at The Networked Grid that if you look at the case of the guy with a Tesla roadster in his condo complex, and he's the only person with an electric car, then the rest of the condo association could potentially be paying for his car. "It is the first time that the rate payer and the consumer is not the same person," he said.

Even though there are unanswered questions, the CPUC is moving ahead into Phase 2, "where the rubber really meets the road," according to Matthew Crosby, Regulatory Analyst at CPUC. Phase 2 includes tackling such issues as who will pay for grid upgrades, streamlining home charging installation, metering requirements and health and safety issues related to charging.

Crosby also said the CPUC was still evaluating whether utilities would be ready to have situational awareness at the residential transformer level. So essentially, not only are they still figuring out where the money will come from, they're still evaluating if the utilities are ready to provide the upgrades needed.

Some utilities, like PG&E, have suggested that maybe the Federal Energy Regulatory Commission will have jurisdiction over charging stations. But most utilities in California will not wait for the federal government to jump in. Instead, they are expecting to lead the way -- whether they want to or not.

"Whatever we do in California," explained Rob Bearman, Director of Global Utility Alliances for Better Place, "is likely to be adopted by the rest of the nation and the rest of the world."