Abstract:The deployment of large numbers of plug-in electric vehicles (PEVs), in order to satisfy zero-emission-vehicle (ZEV) goals in the State of California, brings both potential benefits and costs for the electric grid. Since early 2009, the issue of so-called vehicle-grid integration (VGI) has become a center-stage policy discussion among the electricity and transportation sectors. By conducting a policy process analysis, this research addresses the questions of how the policy process for VGI regulations has been formed in California, and what have been the major challenges in policy-making. A series of interviews were conducted between March 2013 and April 2014 including representatives of 18 organizations from the government, electric utility, and PEV sectors. The qualitative data is analyzed under the three dimensions of policy process; problem, politics, and policy as suggested by Multiple Streams framework (Kingdon, 1995). The results show that a policy window for VGI regulations was opened for the first time by the political stream, through State Senate Bill 626 in 2009, and later, supported by the Governor’s ZEV action plan in 2012. In response, Energy Division Staff at CPUC became a policy entrepreneur, and has adopted an incremental policy-making strategy targeting investor-owned utilities (IOUs). The two largest barriers facing an effective policy solution are identified as; (1) the complexities involved in quantifying economic value from VGI; and (2) the feasibility concerns about adopting VGI enabling technologies on the grid.